In order to examine the relationship between the selling price of a used car and

Question

In order to examine the relationship between the selling price of a used car and its age, an analyst uses data from 20 recent transactions and estimates Price = 0 + 1 Age + . A portion of the regression results is shown in the accompanying table

Specify the competing hypotheses in order to determine whether the selling price of a used car and its age are linearly related.

At the 1% significance level, find the critical value(s). (Round your answer to 2 decimal places.)

At the 1% significance level, what is the conclusion to the test? Is the age of a used car significant in explaining its selling price?

(Click to select)YesNo, we (Click to select)cancannot conclude that the age of a used car is significant in explaining its selling price

Conduct a hypothesis test at the 1% significance level in order to determine if 1 differs from –2000. Show all of the relevant steps. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

(Click to select)Do not rejectReject H0, we (Click to select)cannotcan conclude that 1 –2,000.

In order to examine the relationship between the selling price of a used car and its age, an analyst uses data from 20 recent transactions and estimates Price = 0 + 1 Age + . A portion of the regression results is shown in the accompanying table

Explanation / Answer

a) Option B

b) Test statistic = -1202.28 / 127.93 = -9.40

c - 1) 2.88

c - 2) Yes; Can

d - 1) Test statistic = (-1202.28 + 2000) / 127.93 = 6.24

Critical value = 2.88

d - 2) Reject; can

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