Discussion:
Q: The owner of Maumee Ford-Mercury wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year.
Car Age (years) Selling Price ($0.00)
1 9 8.1
2 7 6.0
3 11 3.6
4 12 4.0
5 8 5.0
6 7 10.0
7 8 7.6
8 11 8.0
9 10 8.0
10 12 6.0
11 6 8.6
12 6 8.0
a. If we want to estimate selling price on the basis of the age of the car, which variable is the dependent variable and which is the independent variable?
b. Draw a scatter diagram.
c. Determine the coefficient of correlation.
d. Determine the coefficient of determination.
e. Interpret these statistical measures. Does it surprise you that the relationship is inverse?