Statistics for Business: Decision Making and Analysis, 3rd Edition

You Do It

1. 37. Diamond rings

   1. Yes.

   2. Estimated Price $S = − 259.63 + 3721.02 Weight The intercept is an extrapolation. The slope is 3721$S/carat, which is an extrapolation since these gems weigh less than ½ carat.

   3. r² = 0.9783, indicating that the fitted equation describes all but about 2% of the variation in prices. The residual SD is $S 31.84. The data lie close to the line given the scale of the plot.

   4. 372$S.

   5. 2420$US/carat. The slope for emerald diamonds is slightly higher at 2700$US/ carat.

   6. The setting adds a fixed cost.

   7. Probably, the residual for this ring is − 85.16 $S.

   8. The residuals do not show a pattern, suggesting a histogram is a good summary. s_e = $S 31.84. The Empirical Rule implies that about 95% of rings are priced within $S 64 of the ...