The Table Below Lists Weights (Carats) and Prices (Dollars) for Randomly

question 124

Essay

The table below lists weights (carats) and prices (dollars) for randomly selected diamonds. Find the regression
equation, letting the weight be the predictor variable. Find the best predicted price for a diamond with a weight
of 1.50 carats. What is wrong with predicting the price of a 1.50-carat diamond? $$\begin{array} { | l | l | l | l | l | l | l | } \hline \text { Weight } & 0.3 & 0.4 & 0.5 & 0.5 & 1.0 & 0.7 \\\hline \text { Price } & 510 & 1151 & 1343 & 1410 & 5669 & 2277 \\\hline\end{array}$$

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Definitions:

Direct Labor Hour

A measure of the amount of time workers spend directly manufacturing a product.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services and are significant in cost.

Total Cost

The complete amount of costs involved in producing, purchasing, and/or selling goods or services, including fixed and variable costs.

Inventory Information

Details about the quantities, locations, and values of a company's inventory, used for managing and reporting purposes.