Question

The following table contains age and price data for 8 randomly selected ambulances between1 and 8years old. Here, x denotes age, in years, and y denotes price, in hundreds of dollars. A regression was performed and the resulting regression equation wa

ModifyingAbove y with caret equals 409.23 minus 22.54 xy=409.23−22.54x.

x	5	1	6	2	8	2	4	5
y	250	420	245	350	275	365	335	290

a. Should that regression equation be used to predict the price of a 4-year-old ambulance? A 10-year-old ambulance? Explain your answers.

b. For which ages is use of the regression equation to predict price reasonable?

Answer 1

Ans:

a)

x values in sample data ranges from 1 to 8 years,so above regression model is suitable for predicting price for x values i.e. age from 1 to 8 years.

we can use above regression model for 4 year old ambulance, but not for 10 year old ambulance,as it is out of range of x values.

b)

As,explained above,we can use regression model for prediction for those x values which comes in the range of sample data i.e. 1 to 8 years old .