The data in the accompanying table represent the reported and audited newsstand

ID: 3355703 • Letter: T

Question

The data in the accompanying table represent the reported and audited newsstand yearly sales (in thousands) for 10 magazines in a recent year. The data are modeled by the equation

ModifyingAbove Upper Y with caret Subscript i Baseline equals 5.9098 plus 0.6825 Upper X Subscript iYi=5.9098+0.6825Xi,

where

Upper X Subscript iXi

is the reported sales and

ModifyingAbove Upper Y with caret Subscript iYi

is the predicted actual sales for the ith observation. Perform a residual analysis for these data. Evaluate whether the assumptions of regression have been seriously violated.

Reported Sales

621.7

359.3

529.8

491.1

69.2

566.8

125.6

50.6

353.7

263.8

Actual Sales

441.9

216.9

345.2

336.4

41.4

400.4

95.9

39.8

268.7

214.5

Which of the assumptions of regression, if any, have been seriously violated?

The assumption of independence has been violated because errors from later time periods appear to be related to those from earlier time periods.

The assumption of linearity has been violated because the data are not linear.

None of the assumptions of regression have been seriously violated.

The assumption of normality has been violated because the normal probability plot does not appear to be a straight line.

The assumption of equal variance has been violated because the variability of the residuals is much greater when the reported newsstand sales is larger.