A Survey Is Conducted to Determine Whether the Age of Car

Essay

A survey is conducted to determine whether the age of car influences the annual maintenance cost. A sample of 10 cars is selected and the data is shown below. $$\begin{array} { | c | c | } \hline \text { Age of car (months) } \boldsymbol { x } & \begin{array} { c } \text { Annual Maintenance } \\\text { Cost (\$) } \boldsymbol { y }\end{array} \\\hline 3 & 120 \\\hline 5 & 115 \\\hline 6 & 135 \\\hline 7 & 290 \\\hline 9 & 275 \\\hline 10 & 300 \\\hline 11 & 350 \\\hline 13 & 475 \\\hline 14 & 500 \\\hline 15 & 550 \\\hline\end{array}$$
a. Test whether each of the regression parameters β₀ and β₁ is equal to zero at a 0.05 level of significance.
b. Interpret the estimated regression parameters? Are these interpretations reasonable?