A least squares regression was used to estimate the relationship between the dollar price P of 45 used 2001 Audi A4 2.8L sedans with manual transmission and the number of miles M the car had been driven:

The standard errors are in parentheses.

a. Does the value 16,958 seem reasonable?

b. Does the value −0.0677 seem reasonable?

c. Does the value 0.70 seem reasonable?

d. Is the estimated relationship between M and P statistically significant at the 5 percent level?

e. Should the variables be reversed, with M on the left-hand side and P on the righthand side? Why or why not?

Transcribed Image Text:

P 16,958 0.0677M, R2 = 0.70 - (2,553) (0.0233)