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eler pries Aiands an the ass of quality Cwith valies eweler pries diamonds 0 to

ID: 3055267 • Letter: E

Question

eler pries Aiands an the ass of quality Cwith valies eweler pries diamonds 0 to wth beik and 0 contaahy numerbus imperestins) and uoior (with values fnmltote with -being Pur, white-and 1. beingyetlew). Rased on tha mice per arat ( ?h-hundreds of dollars of diammds weighi blw 10 andLarats , deternTbe the relet anship biw qmality otor&price; The data analysis for thes is in the folw n attunáis wse Eral's The sampe Liner regression enalysis for priu on 4uality n For Aieend quality of 5 the oburved prie was $6s par Carat Whst is the residual error n in prie is reduied by taking into oecoust qualiy C Conclude that there is a signitiant linear elatsip biw qualityPrice why wkhy r't ?eer.rtthtarr?Priate numerital?stificatn, frwwth,atu atx 4m the ch.ru. nse the multipu regression analysis in tha ppinAix to ons ?. Ihe least sqmares multipn-regression yuatnnfrwi.ur ond tuality on priz B, Pnvide the appopriate vontertnal fnterprete tn for the partial regressian 11. For test use the variable nanas kuolouopality-frite) overellsignifunac, the hal ,alternative hypothesi is The P-value ? At or 0.1 what wond you voninde 0f the thre regression Lnes whith hld you recommend w,ing for

Explanation / Answer

a)
if quality = 5
y^ = 37.5653333 + 2.2506667 * 5
= 48.8186668

residual error = yi - y^
= 65-48.8186668
=16.181333

b)
R^2 = 0.1859
18.59 %

c) p-value = 0.1854 > 0.05
we fail to reject the null hypothesis
there is not significant relationship between quality and price


multiple regression
a)
y^ = 1.7514 + 4.8952 *color + 3.7584*quality
b)
when the color is increased by 1 unit , on average price increase by 4.8952 unit

c)
p-value = 0.00049<   0.01
we reject the null hypothesis

d)
we choose multiple regression
as it is significant at 0.01 level and
it has highest R^2


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