An Article in the Journal of Statistics Education Reported the Price

question 93

Essay

An article in the Journal of Statistics Education reported the price of diamonds of different sizes in Singapore dollars
(SGD). The following table contains a data set that is consistent with this data, adjusted to US dollars in 2004:

$\begin{array}{l}\begin{array} { | c | c | } \hline \text { 2004 US S } & \text { Carat } \\\hline 494.82 & 0.12 \\\hline 768.03 & 0.17 \\\hline 1105.03 & 0.20 \\\hline 1508.88 & 0.25 \\\hline 1826.18 & 0.28 \\\hline 2096.89 & 0.33 \\\hline\end{array}\quad\begin{array} { | c | c | } \hline \text { 2004 US S } & \text { Carat } \\\hline 688.24 & 0.15 \\\hline 944.90 & 0.18 \\\hline 1071.75 & 0.21 \\\hline 1504.44 & 0.26 \\\hline 1908.28 & 0.29 \\\hline 2409.76 & 0.35 \\\hline\end{array}\quad\begin{array} { | c | c | } \hline \text { 2004 US S } & \text { Carat } \\\hline 748.10 & 0.16 \\\hline 1076.18 & 0.19 \\\hline 1289.20 & 0.23 \\\hline 1597.63 & 0.27 \\\hline 2038.09 & 0.32 \\\hline & \\\hline\end{array}\end{array}$


-Would it be better for a customer buying a diamond to have a negative residual or a positive residual from this model? Explain.

---

Definitions:

Bankruptcy Proceedings

Legal processes through which individuals or entities unable to meet financial obligations can seek relief from some or all of their debts.

Certified Mail

A postal service that provides the sender with a mailing receipt and electronic verification that an article was delivered or attempted to be delivered.

Bankruptcy Proceedings

Legal processes initiated by or against an insolvent individual or business to resolve debts under the supervision of a court.

Legal Proceeding

A sequence of actions conducted formally in a court of law for the resolution of disputes or criminal charges.