SMMD: Practice Problem Set 5

Topic: Linear Fit: Ordinary least squares

1. In general, is the linear fit equation of y on x the same as the linear fit
equation for x on y?
A. Slope will be the same but not the intercept
B. Intercept will be the same but not the slope
C. Intercept will be the same, but the slope will be reciprocal
D. None of the above

2. A package delivery service uses a linear fit equation to estimate the fuel costs
of its trucks based on the number of miles driven. The equation is of the form
Fitted Dollars= b0 + b1 Miles. If gasoline prices go up, how would you expect
the fit of this equation to change?
A. Intercept would go up
B. Intercept would go down
C. Slope would become steeper
D. Slope would become flatter

3. If the correlation between x and y is 0.8 and the slope of linear fit equation of
y on x is 1.5, then which of x and y has larger variation?
A. x
B. y
C. Both have equal variation
D. We cannot say

(Q4-Q6) Shoppers at a local supermarket spend, on average, $85 during each

shopping trip. Imagine the scatterplot that shows the total amount spent each
day in the store on the y-axis versus the number of shoppers each day on the x-
axis.

4. ________ is appropriate to describe this data.

A. A linear equation with positive slope.
B. A linear equation with negative slope.
C. A linear equation with zero slope.
D. A linear equation with infinite slope.

5. What would you expect the intercept of the linear model to be?
 A. 0
B. 1
C. -1
D. 0.5

6. What value would you expect for the slope?

A. ∞
B. 85
C. 0
D. -85

(Q7 – Q10) An assembly plant tracks the daily productivity of the workers on the
line. Each day for every employee, the plant records the number of hours put in
(Hours) and the number of completed packages assembled by the employee
(Count). A scatterplot of the data for one day shows a linear trend. A fitted line
with the equation Fitted Count = -2 + 15 Hours summarizes this trend.

7. What does the negative intercept tell us?

A. Linear fit is wrong
B. At the start of each day, the employee has a backlog of 2 units
C. One should not use a linear equation to understand the relationship
between Hours and Count
D. On an average more than 8 minutes must be put in before a package is
assembled

8. A carton holds 12 packages. A working day at this plant has 8 hours. Give the
linear fit equation if the data were converted to cartons produced (y) and
days (or fraction of a day) worked.

A. Cartons = -1/6 + 10 days

B. Cartons = -6 + 10 days
C. Cartons = -6 + 1/10 days
D. Cartons = -1/6 + 1/10 days

9. What is the impact on R2, when the data is converted to cartons and days?
A. R2 increases
B. R2 decreases
C. R2 does not change
 D. Cannot be determined

10. What is the impact on the value of RMSE, when the data is converted to
cartons and days?
A. RMSE increases
B. RMSE decreases
C. RMSE does not change
D. Cannot be determined

11. If net revenue at a firm is about 10% of gross sales, then a scatterplot of net
revenue versus gross sales would show ____.
A. a non-linear pattern
B. a linear pattern with slope 0.1
C. a linear pattern with slope 10
D. no pattern

12. If all the data lie along a single line with non-zero slope, then the R2 is _____.
A. -1
B. 1
C. 0
D. 0.5

13. If the correlation coefficient is 0.8, the percentage of variation in the response
variable explained by the variation in the explanatory variable is
A. 89%
B. 80%
C. 64%
D. Cannot be determined