Using Data for a Large Sample of Cars (N = $n = 93$

question 11

Essay

Using data for a large sample of cars (n = 93), a statistics student calculated a matrix of correlation coefficients for selected variables describing each car. (a) In the spaces provided, write the two-tailed critical values of the correlation coefficient for α = .05 and α = .01 respectively. Show how you derived these critical values. (b) Mark with * all correlations that are significant at α = .05, and mark with ** those that are significant at α = .01. (c) Why might you expect a negative correlation between Weight and HwyMPG? (d) Why might you expect a positive correlation between HPMax and Length? Explain your reasoning. (e) Why is the matrix empty above the diagonal?
Correlation Matrix ( $n = 93$ cars)

$\begin{array}{|c|c|c|c|c|c|c|}\text { MidPr}&\text { CityMPG}&\text { HwyMPG}&\text { EngSize}&\text { HPMax}&\text {Length}& \text {Weight }\\\hline \text { MidPr}&1.000 & & & & & & \\\hline\text { CityMPG}&-0.595 & 1.000 & & & & & \\\hline\text { HwyMPG}&-0.561 & 0.944 & 1.000 & & & & \\\hline\text { EngSize}&0.597 & -0.710 & -0.627 & 1.000 & & & \\\hline \text { HPMax}&0.788 & -0.673 & -0.619 & 0.732 & 1.000 & & \\\hline \text {Length}& 0.504 & -0.666 & -0.543 & 0.780 & 0.551 & 1.000 & \\\hline \text {Weight }&0.647 & -0.843 & -0.811 & 0.845 & 0.739 & 0.806 & 1.000 \\\hline\end{array}$



MidPr = midrange price (in $\$ 1,000 )$ - average of min and max prices
CityMPG = city MPG (miles per gallon by EPA rating)
HwyMPG highway MPG
EngSize = engine size (liters)
HPMax = horsepower (maximum)
Length $=$ length (inches)
Weight = weight (pounds)
Critical value for $.05$
Critical value for .01

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Definitions:

Cost Drivers

Elements that cause the cost of a product or service to increase or decrease, influencing overall expenses.

Overhead Costs

Expenses related to the day-to-day operations of a business that are not directly attributable to specific product units or services.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of resources.

Production Departments

Designated areas or segments in an organization responsible for the creation or assembly of products.