Deck 4: Correlation and Linear Regression

Question 1

Suppose a sample of 60 cans of soda has a mean of 12.1 ounces and a standard deviation of 0.05 ounces. If a can of soda has 12 ounces, what is its corresponding z
Score?

A) 2.0
B) -2.0
C) 1.8
D) -3.0
E) -1.8

Answer 1

-2.0

Question 2

A customer service center keeps track of the number of complaints received each day about one of their new products. The numbers of complaints received over the last 11
Day period are 19, 18, 22, 21, 17, 18, 22, 19, 16, 23, and 25. The median for this sample
Of data is

A) 22.
B) 20.
C) 19.
D) 17.
E) 16.

Answer 2

19.

Question 3

The U.S. Bureau of Labor Statistics (BLS) compiles data on a number of variables. Which of the following BLS variables is categorical?

A) Consumer expenditures
B) Type of workplace injuries
C) Wages by occupation
D) Employment costs
E) Productivity by industry

Answer 3

Type of workplace injuries

Question 4

A recent report evaluated the price and performance of 25 models of smartphones. Computer output gives the summary statistics for the prices ($) shown in the table.
The IQR for these data is

A) $ 142
B) $ 58
C) $ 323
D) $ 442
E) $ 500

Question 5

A recent survey of online shoppers asked them to indicate the primary reason they shop via the Internet. The table summarizes responses by reason and gender. What
Percent of males cite Convenience as the primary reason they shop online?

A) 42%
B) 73%
C) 62%
D) 31%
E) 50%

Question 6

A customer service center keeps track of the number of complaints received each day about one of their new products. The numbers of complaints received over the last 11
Day period are 19, 18, 22, 21, 17, 18, 22, 19, 16, 23, and 25. The IQR for this sample of
Data is

A) 25.
B) 22.
C) 18.
D) 9.
E) 4.

Question 7

Which is true for the data shown in the histogram?

A) I only
B) II only
C) I and II
D) I and III
E) I, II and III

Question 8

Boxplots of earnings per share (EPS) data for a sample of retail company stocks and a sample of energy company stocks are shown below. Which of the following statements
Is correct?

A) The median EPS is higher for energy stocks compared to retail stocks.
B) The median EPS is higher for retail stocks compared to energy stocks.
C) The IQR for the EPS data is larger for retail stocks than for energy stocks.
D) The EPS data are more variable for retail stocks than for energy stocks.
E) The mean is higher for energy stocks compared to retail stocks.

Question 9

A customer service center keeps track of the number of complaints received each day about one of their new products. The numbers of complaints received over the last 11 Day period are 19, 18, 22, 21, 17, 18, 22, 19, 16, 23, and 25. The standard deviation for This sample of data is

A) 0.842.
B) 2.794.
C) 1.845.
D) 0.569.
E) None of the above.

Question 10

A government agency has 6000 employees. As an alternative to the traditional five day work week, employees were asked whether they preferred a four day work week (10
Hours per day) or flexible hours. The segmented bar chart below is based on the data
Collected. Which of the following statements is true about work week preferences and
Age category?

A) A greater percentage of employees who prefer a 4 day work week are in the over
45 age category compared to those who prefer flex hours.
B) A greater percentage of employees who prefer flex hours are in the over 45 age
Category compared to those who prefer a 4 day work week.
C) Preferences appear to be independent of age.
D) The distribution of preferences are the same across different age groups.
E) The segmented bar chart is not appropriate for these data.

Question 11

Boxplots of earnings per share (EPS) data for a sample of retail company stocks and a sample of energy company stocks are shown below. Which of the following statement
Is true about the distributions of EPS for retail and energy stocks?

A) The distribution of EPS for retail stocks is skewed to the right.
B) The distribution of EPS for energy stocks is symmetric.
C) Both distributions of EPS are symmetric.
D) The distribution of EPS for retail stocks is skewed to the left.
E) The distribution of EPS for energy stocks is skewed to the left.

Question 12

A government agency has 6000 employees. As an alternative to the traditional five day work week, employees were asked whether they preferred a four day work week (10
Hours per day) or flexible hours. The table below shows the results by age category.
The most appropriate display for these data is a

A) histogram.
B) stem and leaf display.
C) boxplot.
D) segmented bar chart.
E) frequency table.

Question 13

The following scatterplot shows output/unit capital and years. The data show

A) There is no consistent increasing or decreasing over time.
B) There is no evidence of a seasonal component.
C) There is some evidence of a cyclical component.
D) There is no linear trend over the time period.
E) All of the above.

Question 14

What scale of measurement is type of workplace injuries (slip and fall, stress related, etc.)?

A) Quantitative
B) Interval
C) Nominal
D) Ordinal
E) Numerical

Question 15

A recent survey of online shoppers asked them to indicate the primary reason they shop via the Internet. The table summarizes responses by reason and gender. What
Percent of respondents cite Convenience as the primary reason they shop online?

A) 42%
B) 23%
C) 62%
D) 85%
E) 33%

Question 16

A recent survey of online shoppers asked them to indicate the primary reason they shop via the Internet. The table summarizes responses by reason and gender. What
Percent of respondents who cited Greater Selection as the primary reason they shop
Online were females?

A) 53%
B) 27%
C) 50%
D) 84%
E) 42%

Question 17

The following scatterplot shows output/hour labor and years. The graphical display is an example of what type of data?

A) Cross-sectional
B) Nominal
C) Categorical
D) Time Series
E) Ordinal

Question 18

The U.S. Bureau of Labor Statistics publishes the monthly CPI (consumer price index). This index shows the change in prices paid by urban consumers for a market
Basket of goods and services. These data are

A) Cross-sectional
B) Nominal
C) Categorical
D) Time Series
E) Ordinal

Question 19

A recent report evaluated the price and performance of 25 models of smartphones. Computer output gives the summary statistics for the prices ($) shown in the table. Based
On these results, which of the following is true?

A) The distribution is symmetric.
B) The distribution is skewed to the right.
C) The distribution is skewed to the left.
D) The mean is a better measure of center for these data than the median.
E) The standard deviation is larger than the range.

Question 20

A consumer research group investigating the relationship between the price of meat (per pound) and the fat content (grams) gathered data that produced the following
Scatterplot. The residual of the point ($2.00 per pound, 6 grams of fat) is

A) A large positive value
B) A large negative value
C) Affecting the correlation of the variables
D) Both B and C
E) Both A and C

Question 21

Prices per share of the 20 most actively traded stocks on the New York Stock Exchange in October, 2012. A histogram for these data are shown below.
The data can be described as

A) The data are skewed to the left with a large positive outlier.
B) 5.9 %
C) 17.9 %
D) The data are skewed to the right with a large positive outlier.
E) 13.4 %

Question 22

A manufacturer of cable wire periodically selects samples to monitor the process. A sample of ten wires is selected and the diameters (in cm.) are 0.493, 0.534, 0.527, 0.511,
0)565, 0.559, 0.519, 0.562, 0.551, and 0.530. The mean diameter is

A) 0.455 cm.
B) 0.535 cm.
C) 0.511 cm.
D) 0.565 cm.
E) 0.499 cm.

Question 23

Prices per share of the 20 most actively traded stocks on the New York Stock Exchange in October, 2012. Summary statistics for these data are shown below. The
IQR for this set of dataset is

A) 83
B) 27
C) 13.5
D) 69.5
E) None of the above

Question 24

A magazine that publishes product reviews conducted a survey of teenagers' preferences for cell phones. Three brands of cell phone designed specifically with teens
In mind were the focus of the study. The table summarizes responses by brand and
Gender. What percent of teenagers who preferred the BlackJack II were males?

A) 63%
B) 32%
C) 16%
D) 50%
E) 41%

Question 25

US public debt per capita historical data for the years 2009-2013 yields the following scatterplot:

A) About 99.5% of the variability in debt per capita is explained by the model.
B) On average, debt per capita increases $3.49K per year.
C) The response variable is "year."
D) Both A and B.
E) All of the above.

Question 26

Real estate agencies keep track of housing prices in a given area. Suppose they also provide their clients with quarterly median selling prices for homes in a given area for the
Past three year period. These data are

A) Cross-sectional
B) Time Series
C) Categorical
D) Nominal
E) Ordinal
IA-1

Question 27

An advocacy group is investigating whether gender has an effect on job category in large investment firms. She surveyed a sample of firms with the results shown below.
Which of the following statements is true about gender and job category?

A) A greater percentage of males are executives compared to females.
B) A greater percentage of females are executives compared to males.
C) Job category appears to be independent of gender.
D) A smaller percentage of females are clerical compared to males.
E) The segmented bar chart is not appropriate for these data.

Question 28

A manufacturer of cable wire periodically selects samples to monitor the process. A sample of ten wires is selected and the diameters (in cm.) are 0.493, 0.534, 0.527, 0.511,
0)565, 0.559, 0.519, 0.562, 0.551, and 0.530. The standard deviation is

A) 0.455 cm.
B) 0.005 cm.
C) 0.045 cm.
D) 0.024 cm.
E) 0.099 cm.

Question 29

A magazine that publishes product reviews conducted a survey of teenagers' preferences for cell phones. Three brands of cell phone designed specifically with teens
In mind were the focus of the study. The table summarizes responses by brand and
Gender. What percent of teenagers preferred LG Rumor?

A) 50%
B) 41%
C) 25%
D) 16%
E) 20%

Question 30

The following scatterplot shows monthly sales figures (in units) and number of months of experience on the job for a sample of 19 salespeople. Estimate the correlation.

A) -0.3
B) +0.7
C) -0.7
D) +0.3
E) 0.0

Question 31

In listing a property, real estate agencies provides information on a number of variables. Which of the following variables related to property listings is categorical?

A) Real Estate Tax
B) Number of Bedrooms
C) Style of Home
D) Asking Price
E) Number of Bathrooms

Question 32

What scale of measurement is the type of a car (sedan, SUV, convertible, etc)?

A) Nominal
B) Interval
C) Quantitative
D) Ordinal
E) Numerical

Question 33

An advocacy group is investigating whether gender has an effect on job category in large investment firms. She surveyed a sample of firms with the results shown below.
The most appropriate display for these data is a

A) histogram.
B) stem and leaf display.
C) boxplot.
D) segmented bar chart.
E) frequency table.

Question 34

An office supply chain has stores in two locations, Dayton and Scranton. One of these stores is to be closed within the coming year, and to help make the decision,
Management reviews sales data. Below are boxplots for monthly unit sales for both
Locations. Which of the following statement is not correct?

A) Monthly sales are higher in Dayton compared to Scranton.
B) The IQR for sales in Dayton is larger than that for Scranton.
C) Monthly sales are less variable in Scranton compared to Dayton.
D) Both distributions are fairly symmetric.
E) Monthly sales are more variable in Scranton compared to Dayton.

Question 35

For families who live in apartments the correlation between the family's income and the amount of rent they pay is r = 0.60. Which is true?
I. In general, families with higher incomes pay more in rent.
II. On average, families spend 60% of their income on rent.
III. The regression line passes through 60% of the (income$, rent$) data
Points.

A) I only
B) II only
C) I and II
D) I and III
E) I, II and III

Question 36

A consumer research group investigating the relationship between the price of meat (per pound) and the fat content (grams) gathered data that produced the following
Scatterplot. Which description of the association between fat content and price is more
Accurate?

A) If the point ($2.00 per pound, 6 grams of fat) is removed, the correlation will be
Higher.
B) If the point ($2.00 per pound, 6 grams of fat) is removed, the correlation will be
Lower.
C) Increased fat content generally results in decreased price/lb.
D) Both B and C
E) Both A and C

Question 37

A magazine that publishes product reviews conducted a survey of teenagers' preferences for cell phones. Three brands of cell phone designed specifically with teens
In mind were the focus of the study. The table summarizes responses by brand and
Gender. What percent of female teenagers preferred the Sidekick LX?

A) 43%
B) 60%
C) 21%
D) 50%
E) 16%

Question 38

A business researcher conducted a survey of 500 women to determine preferences for types of automobiles. The types are shown below along with the number of women who
Prefer that type. Which of the following charts would be appropriate for displaying these
Data?

A) Histogram
B) Boxplot
C) Pie Chart
D) Line Graph
E) Stem and Leaf Display

Question 39

Which is true of the data shown in the histogram?

A) I only
B) III only
C) I and II
D) I and III
E) I, II and III

Question 40

The following scatterplot shows monthly sales figures (in units) and number of months of experience on the job for a sample of 19 salespeople. Describe the association
Between monthly sales and level of experience.

A) Wear negative linear association
B) Moderate positive linear association
C) Moderate negative linear association
D) Weak positive linear association
E) Non-linear

Question 41

Suppose a sample of 60 business majors revealed that the average time spent studying per week is 22 hours with a standard deviation of 4 hours. For one student
Reporting that he studies 16 hours per week, the corresponding z score is

A) -1.5
B) 1.5
C) 2.2
D) -2.2
E) -3.0

Question 42

Below is a stem and leaf display of prices for a sample homes recently sold in a metropolitan area in the southeastern region of the U.S. Which of the following statements is true?

A) The mean would be more appropriate than the median to describe the center of
This distribution.
B) This distribution is fairly symmetric.
C) This distribution is right skewed.
D) This distribution is left skewed.
E) Both A and C

Question 43

A regression analysis of company profits and the amount of money the company spent on advertising produced a R2 = 0.72. Which of these is true?
I. This model can correctly predict the profit for 72% of companies.
II. 72% of the variance in company profit can be accounted for by the model.
III. On average, companies spend about 72% of their profits on advertising.

A) None
B) I only
C) II only
D) III only
E) I and III

Question 44

A consumer research group investigating the relationship between the price of meat
(per pound) and the fat content (grams) gathered data that produced the following
scatterplot.
A. Describe the association between the price of meat and fat content.
b. Estimate the correlation.
c. If the point in the lower left hand corner ($2.00 per pound, 6 grams of fat) is removed,
would the correlation become stronger or weaker or remain the same? Explain.

Question 45

To determine whether the cash bonus paid by a company is related to annual pay, data were gathered for 10 loan officers at AMC Bank who received cash bonuses in 2012. The data, scatterplot, and summary statistics are shown below. Model a linear relationship with a least squares regression model.
Find the value of R2. Interpret its meaning in this context.

Question 46

To determine whether the cash bonus paid by a company is related to annual pay, data were gathered for 10 loan officers at AMC Bank who received cash bonuses in 2012. The data, scatterplot, and summary statistics are shown below. Model a linear relationship with a least squares regression model.
Estimate the linear regression model that relates the response variable (cash bonus) to the predictor variable (annual pay).
A. Find the slope of the regression line.
b. Find the intercept of the regression line.
c. Write the equation of the linear model.

Question 47

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many pounds of each variety of coffee were sold last month. The data, scatterplot, and summary statistics are shown below.
Comment on whether each of the following conditions for correlation / linear
regression is met.
A. Quantitative variable condition.
b. Linearity condition.
c. Outlier condition.

Question 48

The following scatterplot shows monthly sales figures (in units) and number of
months of experience on the job for a sample of 19 salespeople.
A. Describe the association between monthly sales and level of experience.
b. Do these data satisfy the conditions for computing a correlation coefficient? Explain.
c. Estimate the correlation.

Question 49

In commenting on the increase in home foreclosures, a news reporter stated "there
appears to be a strong correlation between home foreclosures and job loss of the head of
household." Comment on this statement.

Question 50

Shown below is a correlation table showing correlation coefficients between stock
price, earnings per share (EPS), and price/earnings (P/E) ratio for a sample of 19 publicly
traded companies.
A. What is the correlation between stock price and EPS? Interpret.
b. What is the correlation between stock price and PE? Interpret.
c. What is the correlation between EPS and PE? Interpret.

Question 51

For each of the following scenarios indicate which is the predictor variable and which
is the response variable.
A. A study examined consumption levels of oil and carbon dioxide emissions for a sample
of counties.
b. Data were collected on job performance rating and hours of training for a sample of
employees at a telecommunications repair facility.
c. Salary data as well as years of managerial experience were collected for a sample of
executives in the high tech industry.

Question 52

In discussing how its customers use online services, a bank manager noted "there
seems to be a strong correlation between the use of the online bill paying feature and
gender." Comment on this statement.

Question 53

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many pounds of each variety of coffee were sold last month. The data, scatterplot, and summary statistics are shown below.


Find the value of R2. Interpret its meaning in this context.

Question 54

To determine whether the cash bonus paid by a company is related to annual pay, data were gathered for 10 loan officers at AMC Bank who received cash bonuses in 2012. The data, scatterplot, and summary statistics are shown below. Model a linear relationship with a least squares regression model.

Using the estimated regression equation,
a. Estimate the cash bonus for an executive at Johnson Financial earning $82, 613 a year.
b. What is the residual for this estimate? What does it mean?

Question 55

A correlation of zero between two quantitative variables means that

A) We have done something wrong in our calculation of r.
B) There is no association between the two variables.
C) There is no linear association between the two variables.
D) Re-expressing the data will guarantee a linear association between the two
Variables.
E) None of the above

Question 56

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many pounds of each variety of coffee were sold last month. The data, scatterplot, and summary statistics are shown below.


Estimate the linear regression model that relates the response variable (monthly sales) to the predictor variable (price per pound).
a. Find the slope of the regression line.
b. Find the intercept of the regression line.
c. Write the equation of the linear model.

Question 57

To determine whether the cash bonus paid by a company is related to annual pay, data were gathered for 10 loan officers at AMC Bank who received cash bonuses in 2012. The data, scatterplot, and summary statistics are shown below. Model a linear relationship with a least squares regression model.
Comment on whether each of the following conditions for correlation / linear
regression is met.
A. Quantitative variable condition.
b. Linearity condition.
c. Outlier condition.

Question 58

A business executive taught his managers that praise is more effective than
punishment. He was challenged by one of the managers who said that in his experience
praising an employee for executing a task is typically followed by a lesser performance,
whereas yelling at an employee for bad execution is typically followed by improved
performance.
A. Explain this case in terms of a failure to appreciate regression toward the mean.
b. How might luck factor into the improvement or deterioration of performance?

Question 59

For each of the following scenarios indicate which is the predictor variable and which
is the response variable.
A. A supermarket chain gathers data on the amount they spend on promotional material
(specials, coupons, etc.) and sales revenue generated each quarter.
b. Government-sponsored research investigated the relationship between number of hours
individuals spend on the Internet and age.
c. A real estate association conducted a study on home prices and economic strength for
different regions of the United States.

Question 60

Shown below is a correlation table showing correlation coefficients between
population (millions), migration rate of mobile subscriptions to smart phones (in %) and
smart phone penetration per capita (in %) for a sample of 15 countries.
A. What is the correlation between migration rate of mobile subscriptions and population?
Interpret.
b. What is the correlation between smart phone penetration and population? Interpret.
c. What is the correlation between migration rate of mobile subscriptions and smart
phone penetration? Interpret.

Question 61

Data were collected on monthly sales revenues (in $1,000s) and monthly advertising expenditures ($100s) for a sample of drug stores. The regression line relating revenues
(Y) to advertising expenditure (X) is estimated to be yˆ = −48.3 + 9.00x . The correct
Interpretation of the slope is that for each additional

A) $1 spent on advertising, predicted sales revenue increases by $9,000.
B) $100 spent on advertising, predicted sales revenue increases by $9,000.
C) $100 spent on advertising, predicted sales revenue decreases by $9,000.
D) $1,000 in sales revenue, advertising expenditures decrease by $48.30.
E) $100 in sales revenue, advertising expenditures decrease by $48.30.

Question 62

The scatterplot shows monthly sales figures (in units) and number of months of experience for a sample of salespeople. The correlation between monthly sales and level of experience is most likely

A) -.235.
B) 0.
C) .180.
D) -.914.
E) .914.

Question 63

Suppose the correlation, r, between two variables x and y is -0.44. What percentage of the variability in y cannot be explained by x?

A) 19%
B) 44%
C) 81%
D) 88%
E) 12%

Question 64

A scatterplot shows a curved relationship between 2 variables. What methods can be used to analyze the relationship between these variables?

A) Fit an exponential or quadratic function
B) Summarize the strength of the association by using correlation and R2.
C) Transform one or both of the variables by using square root, logarithm, or reciprocal
Functions
D) A and C
E) All of the above

Question 65

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many
Pounds of each variety of coffee were sold last month. Based on the summary statistics shown below, what percent of the variability in the
Number of pounds of coffee sold per week can be explained by price?

A) 95.47%
B) 100%
C) 85.9%
D) 55.6%
E) 4.68%

Question 66

A study examined consumption levels of oil and carbon dioxide emissions for sample of counties. The response variable in this study is

A) oil.
B) oil consumption.
C) carbon dioxide emissions.
D) countries.
E) none of the above.

Question 67

Some people believe that there is a Sports Illustrated cover jinx; that is, individuals or
teams who appear on the cover of Sports Illustrated will subsequently experience bad
luck.
A. Explain this case in terms of a failure to appreciate regression toward the mean.
b. Give an explanation for the deterioration in performance after the featured cover?

Question 68

A consumer research group examining the relationship between the price of meat (per pound) and fat content (in grams) gathered data that produced the following scatterplot. If the point in the lower left hand corner (2 grams of fat; $3.00 per pound) is removed, the
Correlation would most likely

A) remain the same.
B) become positive.
C) become weaker negative.
D) become stronger negative.
E) become zero.

Question 69

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many
Pounds of each variety of coffee were sold last month. Based on the data and summary statistics, the intercept of the estimated regression line
That relates the response variable (monthly sales) to the predictor variable (price per
Pound) is

A) 95.459.
B) .858.
C) -4.684.
D) -.858.
E) -8.999.

Question 70

Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS) and price/earnings (P/E) ratio for a sample of 19
Publicly traded companies. Which of the following statements is false?

A) EPS is the best predictor of stock price.
B) The strongest correlation is between EPS and stock price.
C) There is a weak negative association between PE and EPS.
D) PE is the best predictor of stock price.
E) The weakest correlation is between PE and EPS.

Question 71

The scatterplot shows monthly sales figures (in units) and number of months of experience for a sample of salespeople.
The association between monthly sales and level of experience can be described as

A) positive and weak.
B) negative and weak.
C) negative and strong.
D) positive and strong.
E) nonlinear

Question 72

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many
Pounds of each variety of coffee were sold last month. Based on the scatterplot shown
Below, which of the following statements is true? Price/Pound

A) The quantitative variable condition is satisfied.
B) The linearity condition is satisfied.
C) There are no obvious outliers.
D) All of the above.
E) None of the above.

Question 73

A company studying the productivity of its employees on a new information system was interested in determining if the age (X) of data entry operators influenced the number
Of completed entries made per hour (Y). The regression equation is yˆ = 14.374 − 0.145x .
Suppose the actual completed entries per hour for an operator who is 35 years old was 8.
The residual is

A) -1.3
B) 2.6
C) -3.5
D) 1.3
E) -2.2

Question 74

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many
Pounds of each variety of coffee were sold last month. Based on the data and summary statistics shown below, the slope of the estimated
Regression line that relates the response variable (monthly sales) to the predictor variable
(price per pound) is

A) 95. 459.
B) .858.
C) -4.681.
D) -.858.
E) -8.999.

Question 75

Suppose the correlation, r, between two variables x and y is -0.44. What would you predict about a y value if the x value is 2 standard deviations above its mean?

A) It will be .88 standard deviations below its mean.
B) It will be .88 standard deviations above its mean.
C) It will be 2 standard deviations below its mean.
D) It will be .44 standard deviations below its mean.
E) It will be .44 standard deviations above its mean.

Question 76

A company studying the productivity of their employees on a new information system was interested in determining if the age (X) of data entry operators influenced the number
Of completed entries made per hour (Y). The regression equation is yˆ = 14.374 − 0.145x .

A) .779
B) -.236
C) .575
D) -.929
E) -.779

Question 77

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many pounds of each variety of coffee were sold last month. The data, scatterplot, and summary statistics are shown below.


Using the estimated regression equation,
a. Estimate the monthly sales for a variety of coffee that costs $12 per pound.
b. What is the residual for this estimate? What does it mean?

Question 78

A supermarket chain gathers data on the amount they spend on promotional material (e.g., coupons, etc.) and sales revenue generated each quarter. The predictor variable is

A) sales revenue.
B) amount spent on promotional material.
C) number of coupons offered.
D) supermarket chains.
E) none of the above.

Question 79

A small independent organic food store offers a variety of specialty coffees. To determine whether price has an impact on sales, the managers kept track of how many
Pounds of each variety of coffee were sold last month. Based on the scatterplot, the linear relationship between number of pounds of coffee sold
Per week and price is

A) strong and positive.
B) strong and negative.
C) weak and negative.
D) weak and positive.
E) nonexistent.

Question 80

Data were collected on monthly sales revenues (in $1,000s) and monthly advertising expenditures ($100s) for a sample of drug stores. The regression line relating revenues
(Y) to advertising expenditure (X) is estimated to be yˆ = −48.3 + 9.00x . The predicted
Sales revenue for a month in which $1,000 was spent on advertising is

A) $50,000.
B) $851.70.
C) $8,951.70.
D) $41,700.
E) $90,000.