Question

States in the United States are allowed to set their own rates for sales taxes as well as taxes on services, such as telephone calls. The scatterplot below graphs the state and local taxes charged for wireless phone calls (as a percentage) versus the state sales tax (also as a percentage).
(a) Describe the association, if any, that you fnd in the scatterplot.
(b) Estimate the correlation between the two variables from the plot. Is it positive, negative, or zero? Is it closer to zero or to {0.5?
(c) The cluster of states with no sales tax in the lower left corner of the plot includes Alaska, Delaware, Montana, New Hampshire, and Oregon. What is the effect of this cluster on the association? If these were excluded from the analysis, would the correlation change?
(d) Would it be appropriate to conclude that states that have high sales tax charge more for services like wireless telephone use?


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  • CreatedJuly 14, 2015
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