probs-simplereg1 - Practice Problems on Correlation &...

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1. Suppose that, across a sample of stores, the correlation coefficient between beer prices and beer sales is -0.65. What does this number indicate? (a) There is almost no variability in beer sales that is unexplained by beer price. (b) More beer sales tend to go along with lower beer prices. (c) As price increases by $1, beer sales decrease by 65% (d) All of the above are true. 2. The purpose of a scatterplot is: (a) To test for the significance of association in bivariate data. (b) To calculate the correlation coefficient. (c) To provide a visual picture of the relationship in bivariate data. (d) To determine a confidence interval for the regression slope. 3. The standard error of the sample regression slope tells you: (a) Approximately how different the slope coefficient will be in different samples. (b) Approximately how large the prediction errors are. (c) Approximately how spread out the Y scores are. (d) Approximately how much of the variability of Y is explained by X. 4. The correlation coefficient describes the _________ between 2 variables. (a) strength of curved association (b) strength of random association (c) strength of linear association (d) American Marketing Association 5. R 2 is a measure used to describe the overall fit of the regression line. Which of the following statements is/are correct about R 2 ? (a) In general, the closer the R 2 is to 1, the better the fit of the regression line to the points in the scatterplot. (b) R 2 tells you the proportion of the points in the scatterplot that fall right on the regression line. (c) R 2 will always decrease as you add new observations to your regression. (d) All of the above are true statements about R 2 . 6. A cost accountant is developing a regression model to predict the total cost of producing a batch of circuit boards as a function of the batch size. The independent and dependent variables for this regression would be: (a) IV: circuit board DV: batch size (b) IV: batch size DV: total cost (c) IV: average cost DV: circuit board (d) IV: total cost DV: average cost
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(The next 9 questions are based on the following information.) Pete Estrian is looking to buy a used Honda Civic. He checks the Internet and finds a huge list of Civics for sale in his area. He selects a random sample of 10 cars, ranging in age from 2 years old to 15 years old. For each car, he enters the age (in years) and the offered sales price (in thousands) into Excel. He runs a regression predicting price from age, and gets the following (edited) output: ANOVA df SS MS F Significance F Regression 1 93.5 93.51 117.0 0.000005 Residual 8 6.4 0.80 Total 9 99.9 Coefficients Standard Error t Stat P-value Intercept 12.10 0.60 20.2 0.00000004 Age -0.80 0.07 -10.8 0.000005 7. What is the equation for the regression line? (a)
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This document was uploaded on 06/05/2011.

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probs-simplereg1 - Practice Problems on Correlation &...

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