Subaru Costs Data Collected from Internet Ads for 1999 Subarus $r ^ { 2 } = 0.47$

question 38

Essay

Subaru costs Data collected from internet ads for 1999 Subarus were used to create a model to estimate the asking price of the car based on the number of miles it had been driven. The model has $r ^ { 2 } = 0.47$ and equation Price $= 15,327 - 0.11 ($ Miles $)$ . The plot of residuals versus the predicted price is shown.



a. Do you think you could make accurate estimates of Subaru prices with this model?
Explain.
b. Interpret the slope of the line.
c. One of the cars in the data set had been driven 42,000 miles. How much was the owner
asking for it? (Show work.)

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Definitions:

Government Spending

The total amount of money expended by a government on various sectors, including infrastructure, education, defense, and social services.

Net Exports

The difference between a country's total exports of goods and services and its total imports of goods and services over a specified period.

Samuelson

Refers to Paul Samuelson, a prominent economist known for his contributions to many fields of economics.

Solow

Refers to the Solow-Swan model, an economic model of long-term economic growth set within the framework of neoclassical economics that illustrates how a country's level of capital stock, labor force, and technology can affect its total output or GDP.