A study is commissioned to observe how much of the variation in gas prices is caused by the variation in oil prices. Over 52 weeks, the average price of a gallon of gas and the price of a barrel of oil where recorded each Friday (so n=52). The regression provided the following results:
SSE = 12500 SSR = 20320 SSxx = 127,000
b0 = -15 b1=0.4
A) Calculate the coefficient of determination (R2) and interpret.
B) Describe the sampling distribution of b1. Calculate the estimated standard error of b1.
C) Make a 95% confidence interval for the true relationship between the price of oil and the average price of a gallon of gas.
D) Test whether the price of oil was significantly influencing the average price of gas. Use alpha = .05.
E) Test whether the entire model significantly explained the variation in the average price of gas. Use alpha= .01.