X Y X2 Y2 XY

62 6 3844 36 372
57 5 3249 25 285
40 4 1600 16 160
49 3 2401 9 147
67 5 4489 25 335
54 5 2916 25 270
43 2 1849 4 86
65 6 4225 36 390
54 3 2916 9 162
41 1 1681 1 41
44 3 1936 9 132
48 2 2304 4 96
55 4 3025 16 220
60 5 3600 25 300
59 4 3481 16 236
40 2 1600 4 80
38 1 1444 1 38
ε X=876 ε Y=61 ε X2=46,560 ε Y2=261 ε XY=3,350
Set C Question 1

A) ^
Y=b0+b1

1 εXεY (876)(61)
cov(X,Y) = (εXY − )= 1 (3,350− )
n−1 n 17−1 17
=12.9191

( )
2 2
S2x = 1 (X) = 1 (876)
ε X 2− ( 46,560 ) −
n−1 n 17−1 17
=88.7647
cov (X , Y ) 12.9191
b1 = =
S2 x 88.7647
=0.1455
εY εX 61 876
b0 = −b1 ( ) = −0.1455( )
n n 17 17
= -3.9093

^
The least square regression line is: y= -3.9093+0.1455x

B) For each additional one year of the age of the audience, the number of concerts attended
on average will increase by 15 concerts.
 √
C) Sε = SSE
n−2

1 1
S2y = ¿= ¿
n−1 17−1
= 2.6324
SSE = (n-1) (S2y - ) = (17-1) (2.6324- (cov ( X , Y ) )2 )
¿¿
88.7647
=12.0338

√
Sε = 12.0338
17−2
= 0.8957

D) R2= ¿ ¿
1 εXεY (876)(61)
cov(X,Y) = (εXY − )= 1 (3,350− )
n−1 n 17−1 17
=12.9191

( )
2 2
S2x = 1 (X) = 1 (876)
ε X 2− ( 46,560 ) −
n−1 n 17−1 17
=88.7647
1 1
S2y = ¿= ¿
n−1 17−1
= 2.6324
R2= (12.9191)2
(88.7647)(2.6324 )
= 0.7143
R2= 0.7143
This means that 71.43% of the variation in the number of concerts attended is explained
by the variation in independent variables which is the age of the audience, while 28.57%
remains unexplained.
Question 2

A) R2= 0.13
This means that 13% of the variation in the price of an apartment building is explained by
variations in two independent variables: size of the apartment building and age of the
apartment building, while 87% remains unexplained.

B) b1 = 47.88. This tells us that for each additional size of the apartment buildings, the price
of an apartment building on average increases by 47880 ft. (Consuming that the other
independent variables in the model are held constant)

b2 = -4.25. This tells us that for each additional age of the apartment building, the price of an
apartment building on average decreases by -4.25 years. (Consuming that the other
independent variables in the model are held constant)

C) Step1: H0: β 1 ¿ β 2=0

H1: At least one β 1 is not equal to zero

Step2: Test statistic: F=1.18

Step3: Rejection region: Reject H0 if F>F0.05,2,16 = 3.63

Step4: Since F=1.18<3.63, do not reject H0

Step5: Ther is not enough evident at 5% significance level to infer that the model is
valid.

D) Step1: H0: β 2 = 0
H1: β 2≠ 0

Step2: Test statistic: t = -0.16

Step3: Rejection region: Reject H0 if t <-t0.1, 16 = -1.337 or t > 1.337

Step4: Since t = -0.16 > -1.337, do not reject H0.

Step5: There is not enough at the 10% significance level to infer that price of an
apartment building and age of the apartment building are linearly related.