Question

A statistics student is studying if there is a relationship between the price of a used car and the number of miles it has been driven. She collects data for 20 cars of the same model with different mileage, and determines each car’s price using a used car website. The analysis is given in the computer output.
Predictor Coef SE Coef t-ratio p
Constant 24157.2 2164.1 2.965 0.046
Mileage -0.181 0.024 5.377 0.000
S = 3860.7 R-Sq = 68.0% R-Sq(Adj) = 67.5%
Using the computer output, what is the equation of the least-squares regression line?

ŷ = –0.181 + 24157.2x
ŷ = 24157.2 – 0.181x
ŷ = 2164.1 + 0.024x
ŷ = 0.024 + 2164.1x

Answer 1

Answer:   Choice B

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Explanation:

Simply look at the "coef" column to find the values you need. The constant is the term that isn't attached to the variable. The mileage coefficient is basically the slope.

You can think of it like

price = constant + (mileage coefficient)*(mileage)

The mileage coefficient being negative tells us we have negative correlation going on here. As x increases, y decreases. This makes sense because the car's value is expected to go down the more mileage is added on it.