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

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1. 37. Diamond rings

   1. β₀ is an extrapolation, and b₀ is about 15 se(b₀) below zero. We expect a positive intercept, representing the fixed cost of the ring, though this is an extrapolation.

   2. The prediction interval is [$607 to $735]. Because $800 lies above this interval, this ring is unusually expensive.

2. 39. Download

   1. Yes, we reject H₀:ρ = 0 and H₀:β₁ = 0.

   2. This is the confidence interval for the intercept, 3.9 to 10.7 sec.

   3. 6.5 to 9.2 seconds saved.

3. 41. Seattle homes

   1. Yes, data satisfy conditions of SRM.

   2. b₁ estimates fixed costs from $35,000 to $104,000.

   3. b₀ estimates marginal costs from 304 to 368 $/SqFt.

   4. $180 to $540 per square foot.

   5. $530,000 to more than $1.6 million.

4. 43. R&D expenses

   1. Estimated log_e R&D = − 1.459 + 0.816 log_e Total ...