Khaleesi Herbert

2020-12-27

The scatter plot below shows the average cost of a designer jacket in a sample of years between 2000 and 2015. The least squares regression line modeling this data is given by $\stackrel{^}{y}=-4815+3.765x.$ A scatterplot has a horizontal axis labeled Year from 2005 to 2015 in increments of 5 and a vertical axis labeled Price (\$) from 2660 to 2780 in increments of 20. The following points are plotted: $\left(2003,2736\right),\left(2004,2715\right),\left(2007,2675\right),\left(2009,2719\right),\left(2013,270\right)$. All coordinates are approximate. Interpret the y-intercept of the least squares regression line. Is it feasible? Select the correct answer below: The y-intercept is −4815, which is not feasible because a product cannot have a negative cost. The y-intercept is 3.765, which is not feasible because an expensive product such as a designer jacket cannot have such a low cost. The y-intercept is −4815, which is feasible because it is the value from the regression equation. The y-intercept is 3.765 which is feasible because a product must have a positive cost.

tabuordy

Step 1

Given least square regression line $\stackrel{^}{y}=-4815+3.765x.$ it is to estimate the average cost of designer jacket in a sample of years between 2000 and 2015. The least square regression line is in the form of $\stackrel{^}{y}=mx+b.$ Where m is the slope of the line and b is the hat y intercept (value of

Step 2

From the given regression line, it can be observed that y- intercept is -4.815. Here, -4.815 represents the cost and it shows negative. In this case, the product cannot have a negative cost. Therefore, it is not feasible. Hence, the correc option is "the y- intercept is -4.815, which is not feasible because a product cannot have a negative cost".

Do you have a similar question?