1. For the hard drive data in Exercise 2, some research on the prices discovered that the 200 GB hard drive was a spe- cial "hardened" drive designed to resist physical shocks and work under water. Because it is completely different from the other drives, it was removed from the data. The corre- lation is now 0.994 and other summary statistics are:
2. For the bookstore of Exercise 1, the manager wants to predict Sales from Number of Sales People Working.
a) Find the slope estimate, b1.
b) What does it mean, in this context?
c) Find the intercept, b0.
d) What does it mean, in this context? Is it meaningful?
e) Write down the equation that predicts Sales from Number of Sales People Working.
f) If 18 people are working, what Sales do you predict?
g) If sales are actually $25,000, what is the value of the residual?
h) Have we overestimated or underestimated the sales?