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

Think About It

1. 23. Yes. Let β₁ = 0 and β₀ = μ.

2. 25.

   1. b₀ ≈ $100 and b₁ ≈ 2 (the units cancel)

   2. Less than 1

   3. 0.5

   4. About $50

3. 27. The response is Y, and the explanatory variable is X. These can be transformations of the original data.

4. 29. Averages would be affected by carryover effects from prior advertising and not likely linearly related to current advertising alone.

5. 31. The data would violate the SRM since the variances of the averages would differ. The slope and intercept ought to be about the same. The value of s_e would shrink since it measures the variation of averages rather than individuals. r² would be larger.

6. 33. β₁ remains the same. β₀ carries the units of the response and would be 100 times larger. r² remains the same, and s_e changes like ...