Question: 6 In Example 1, we ran a regression with only x1 (miles driven) as an independent variable. We found the coefficient of x1 in this

6 In Example 1, we ran a regression with only x1 (miles driven) as an independent variable. We found the

TABLE 24 Units Total Month Shipped Shipping Cost 123 300 $1,060 2

coefficient of x1 in this regression to be 51.68. This appears to indicate (contrary to what we would expect) that increasing the miles driven will lead to decreased maintenance costs. Explain this result. (Hint: Estimate the correlation between x1 and x2.)

TABLE 24 Units Total Month Shipped Shipping Cost 123 300 $1,060 2 400 $1,380 500 $1,640 4 200 $740 5 300 $1,060 6 350 $1,190 7 460 $1,520 8 480 $1,580 9 120 $540 10 760 $2,420 11 580 $2,200 12 340 $1,470 13 120 $790 14 100 $720 15 500 $1,960

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