7. I f the price of oil decreases by 10 dollars per barrel, this equation estima

Question

7. I f the price of oil decreases by 10 dollars per barrel, this equation estimates that gas price will a) increase by 54 cents b) increase by 5.4 cents c) increase by $5.40 d) decrease by 54 cents e) decrease by 5.4 cents 8. Subsequent to the collection of this data, oil prices increased to $105 per barrel. As a result, an analyst was interested in using the equation above to estimate gas price. In evaluating this idea, the best advice is to a) use the equation because $105 is higher than the other oil prices seen in the data b) use the equation because the R-squared value is high enough c) don't use the equation because the R-squared value is too high d) don't use the equation because an oil price of $105 is too far from the prices encountered when the data was collected 9. approximately Based on the least squares equation, the predicted gas price when oil price is $65 per barrel is a) $2.46 b) $2.56 c) $2.66 d) $2.76 e) $2.86 10. T he exact margin of error for predicting gas price when oil price is $65 is closest to a) $0.31 b) $0.62 c) $0.75 d) $0.93 e $1.50 11. An analysis resulted in a sample correlation coefficient of.75. On this basis, it can be concluded that of the weekly stock prices of IBM and Microsoft over a period of 52 weeks a) increases in IBM's price influence investors to pay higher prices for MICROSOFT b) decreases in IBM's price influence investors to pay higher prices for MICROSOFT c) increases in MICROSOFT's price influence investors to pay higher prices for IBM d) decreases in MICROSOFT's price influence investors to pay higher prices for IBM e) none of the above can be concluded from this information

Explanation / Answer

6)

option A is correct

7)

option D

8)

option D

9)predicted value =-0.625+0.054*65=2.86

10)

margin of errir=(upper bound-lower bound)/2 =(3.6166-2.0968)/2=0.75

11)

as correlation does not indicate causation

option E is correct

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