Statistic

PROBLEM 4

Classified ads in the Ithaca Journal offered several used Toyota Corollas for sale. Listed 

below are the ages of the cars and the advertised prices. 

Age (yr) Price Advertised ($)

1 13,990

1 13,495

3 12,999

4   9,500

4 10,495

5  8,995

5  9,495

6  6,999

7  6,950

7  7,850

8  6,999

8  5,995

10  4,950

10  4,495

13  2,850

(a) Report the linear correlation coefficient value and comment on the form, the 

direction, and strength of association between the age of a car and the advertised 

price.  

(b) Report the equation of the least-squares regression line. Interpret the coefficients. 

(c) Report and interpret the value of the coefficient of determination. 

(d) Carry out a T-test about correlation ( H1:p≠0). Use a 5% level of significance.  

EXPECTATIONS

 Draw graphs and charts when appropriate and necessary to demonstrate your 

reasoning! Label all graphs and charts! 

Display formulas. Write complete sentences to summarize your conclusions. 

If use any table values, clearly state which tables you used (e.g. Table A-2, etc.).  

You may attach your excel output when appropriate or necessary (e.g. a scatterplot, 

etc.) 

HYPOTHESIS TESTING QUESTIONS

Your work for all statistical hypothesis testing questions should include the following:

1. Established Ho and Ha.

2. Summary statistics (either computed or given in the problem)

3. The name of the test (e.g. 2sampleTtest or T-test about correlation, etc.)

4. A formula to compute a test statistic (e.g. 1Prop-Z test statistic, etc.)

5. A p-value of the test and/or a critical value from a statistical table.

6. Clearly state the decision rule you use the reach a conclusion. (You may have to 

sketch a graph to show rejection regions.) Do you “Reject Ho” or do you “Fail to 

Reject Ho”?

7. State your conclusion in plain language. Use complete sentences.