BUAD 310  Fall 2007  Dr. Arif Ansari
Topics Covered – Regression
Homework # 3
 100 points
(Due date 11/07/2007 Monday)
For Home Work 3,
Turn in Question 1(25 points), Parts (a)(e), Question 2 (20+40,
20 points for Minitab printouts 40 points for (d)  (k) questions) and Question 3 (15
points). No need to turn in Question 4.
1.
An economist was interested in studying the relationship between the way families spend their tax
refunds and the size of their incomes. Thus he took a sample of ten families and look at
X = annual family income in thousands, and
Y = the percentage of the refund spent within three months of their receipt.
Family income in thousands of $
Percentage of refund spent is in %
Family
Income
%
Refund
spent
in 3
months
X
Y
X^2
Y^2
X*Y
1
63
20
3969
400
1260
2
68
18
4624
324
1224
3
59
25
3481
625
1475
4
75
11
5625
121
825
5
86
8
7396
64
688
6
69
14
4761
196
966
7
78
10
6084
100
780
8
99
8
9801
64
792
9
45
30
2025
900
1350
10
78
11
6084
121
858
Total
720
155
53850
2915
10218
a.
Write the Population Regression Equation.
b.
What is the estimated regression equation?
c.
Calculate the linear relationship between Advertising and Sales (use printout given above),
Explain
β
0,
β
1, also provide the units of slope and yintercept. Does
β
0,
β
1 make sense?
d.
If the Family income is $ 80,000, what will the % refund spent (Provide Units), do you have any
concerns, explain?
e.
If the Family income is $ 180,000, what will the % refund spent (Provide Units), do you have any
concerns, explain?
f.
For what range of xvalue is the regression equation valid?
g.
What is extrapolation?
1
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2.
Input question one data into Minitab and
get the printout
, the printout should look similar to this.
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 Fall '07
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 Business, Regression Analysis, Errors and residuals in statistics

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