Understanding Basic Statistics 6th Edition by Charles Henry Brase,Corrinne Pellillo Brase

Exercise 20

New Car: Negotiating Price Suppose you are interested in buying a new Lincoln Navigator or Town Car. You are standing on the sales lot looking at a model with different options. The list price is on the vehicle. As a salesperson approaches, you wonder what the dealer invoice price is for this model with its options. The following data are based on information taken from Consumer Guide (Vol. 677). Let x be the list price (in thousands of dollars) for a random selection of these cars of different models and options. Let y be the dealer invoice (in thousands of dollars) for the given vehicle.

(a) Verify that x = 193.2, y = 177.2, x 2 = 7676.71, y 2 = 6432.5, xy = 7023.19, and r 0.977.
(b) Use a 1% level of significance to test the claim that 0.
(c) Verify that S e 1.5223, a 1.4084, and b 0.8794.
(d) Find the predicted dealer invoice when the list price is x = 40 (thousand dollars).
(e) Find a 95% confidence interval for y when x = 40 (thousand dollars).
(f) Use a 1% level of significance to test the claim that 0.