A linear model to predict the Price of a used car (in $) from its Mileage (in mi

Question

A linear model to predict the Price of a used car (in $) from its Mileage (in miles) was fit to 29 used cars that were available during a one-week period within 200 miles of a particular city. The model is shown below. Complete parts a through g below Price 21.253. 17-01 1022 Mileage a) What is the explanatory variable? O A. Mileage, because the price of the car is used to predict the mileage B. Mileage, because the mileage of the car is used to predict the price C. Price, because the price of the car is used to predict the mileage 0 D. Price, because the mileage of the car is used to predict the price b) What is the response variable? O A. Price, because the price of the car is predicted from the mileage B. Price, because the mileage of the car is predicted from the price ° C. Mileage, because the mileage of the car is predicted from the price 0 D. Mileage, because the price of the car is predicted from the mileage C) What does the slope mean in this context? O A. O B. ° C. 0 D. Used cars lose, on average, about $0.11 in value for every additional 1000 miles on the odometer. Used cars gain, on average, about $110.22 in value for every additional 1000 miles on the odometer. Used cars lose, on average, about $110.22 in value for every additional 1000 miles on the odometer. Used cars gain, on average, about $0.11 in value for every additional 1000 miles on the odometer d) What does the y-intercept mean in this context? Is it meaningful? O A. The y-intercept $21,253.17 is a base value that is not meaningful because a car with 0 miles would not O B. The y-intercept $21,253.17 is a base value that is meaningful because a car with 0 miles would be be considered used. considered new. ° C. The y-intercept 21.25317 miles is a base value that is meaningful because the price will be $0 0 D. The y-intercept 21.25317 miles is a base value that is not meaningful because the price will not be so e) What do you predict the price to be for a car with 50,000 miles on it? The predicted price is $ f) If the price for a car with 50,000 miles on it was $17,000, what would the residual be? The residual would be S g) Would that car for $17,000 and 50,000 miles seem like a good deal or a bad deal? Explain. It is a (1) (1) O bad 2 less than deal because $17,000 is (2) the predicted price of a car with 50,000 miles O equal to O greater than O good

Explanation / Answer

a)Explanatory variable means indpendent variable.

Mileage is here explanatory or indpenedent variable,as mileage of the car is used to predict the price.

Option B is correct.

b)Price is response variable and price of the car is predicted from mileage.

Option A is correct.

c)Option C is correct.

0.11022*1000=110.22

d)Option B is correct.

e)when x=50000

y=21253.17-0.11022*50000=15753.17

f)resdual=Observed-perdicted=17000-15753.17=1246.83

g)it is bad deal.as 17000 is greater than perdicted price of car with 50000 i.e. 15753.17

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