You collect data on how much a person is willing to spend on a new phone by rand

Question

You collect data on how much a person is willing to spend on a new phone by randomly calling 5 people:

Question 1: Based on the data above, what is the Mean (Average) and the Median price a person is willing to pay for a phone? Which of the two metrics could be affected by an outlier?

Question 2: Your analysts tell you that a price a person is willing to pay for a new phone has a normal distribution with a mean (?) $750 and a standard deviation (?) $60. What proportion of people are willing to pay more than $930 for a new phone.

Question 3: Based on information in Question 2, what proportion of people are willing to pay between $630 and $810 for a new phone?

Question 4: Another team of analysts tells you that they have the following regression to compute the price of a new phone based on the number of good reviews from tech bloggers:

Price of a New Phone = $750 + $50*Number of Good Reviews

What is the predicted price of a new phone that has 3 good reviews? If the actual price is $950, what is the error

Question 5: Draw a scatter plot that illustrates the following situations:

Phone Number Price to Pay Occupation

111-555-3333

$500

Researcher

111-365-5677

$500

Professor

333-345-9790

$1200

Programmer

444-778-4000

$5400

Gamer

678-900-7000

$800

Analyst

Positive Correlation

Negative Correlation

No correlation

Bonus questions:
Bonus 1: Explain to your boss why you designed a survey using randomly selected phone numbers,

instead of simply asking your best friends.

Bonus 2: Amazon collected the following data from its users, that relates persons willingness to buy paper books over electronic books vs. customer’s purchase of DVDs/Blue Ray vs. Streaming.

DVD/Blue Ray

Download/Stream Video

Total

Paper Books

600

300

900

Electronic/Kindle Book

200

900

1,100

Total

800

1,200

1900

Your boss asks you which service (DVD/Blue Ray) or Download/Stream Video should be advertised for the user who purchased a Paper Book? Justify your answer.

Phone Number Price to Pay Occupation

111-555-3333

$500

Researcher

111-365-5677

$500

Professor

333-345-9790

$1200

Programmer

444-778-4000

$5400

Gamer

678-900-7000

$800

Analyst

Explanation / Answer

(1) mean=sum/n=8400/5=1680

median=800,( is middle value (here 3rd) after arranged in ascending or descending order)

(2)required proportion=0.0013

here we use standard normal variate z=(x-mean)/sd,

for x=930, z=(930-750)/60=2

P(X>930)=P(Z>2)=1-P(Z<2)=1-0.9987=0.0013

(3) required answer=0.8185

x=630, z=(630-750)/60=-2

for x=810, z=(810-750)/60=1

P(630<X<810)=P(-2<Z<1)=P(Z<1)-P(Z<-2)=0.8413-0.0228=0.8185

(4)answer =50

Price of a New Phone = $750 + $50*Number of Good Reviews

for Number of Good Reviews=3, Price of a New Phone = $750 + $50*3=$900

error=actual price-estimated price=950-900=50

there are many questions we have used following data to answer the first 4 sub-part of the question according to chegg rules

Phone Number Price to Pay Occupation

111-555-3333

$500

Researcher

111-365-5677

$500

Professor

333-345-9790

$1200

Programmer

444-778-4000

$5400

Gamer

678-900-7000

$800

Analyst

Phone Number Price to Pay Occupation

111-555-3333

$500

Researcher

111-365-5677

$500

Professor

333-345-9790

$1200

Programmer

444-778-4000

$5400

Gamer

678-900-7000

$800

Analyst

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