Recall NOTATIONS: SIMPLE REGRESSION: MULTIPLE REGRESSION: + +

SIMPLE REGRESSION 1. The following data show the speed for plain text printing in pages per minute (ppm) and the price of each printer. Printer #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 Speed (ppm) 12 10 12.2 10.3 11.7 17.8 16.1 11.8 19.8 28.2 Price (USD) 199 499 299 299 399 1850 1000 1387 2089 2200

Develop the estimated regression equation (SRF) using OLS. What is the standard error for the estimate of the slope coefficient? Test the hypothesis at whether the price of the printer price is related to the speed of printing plain text. What is the percentage of variation in price that can be explained by printing speed? If a printers speed is 19.8, what would you estimate its price to be? Develop a 95% confidence interval for the mean price for all printers with a speed of 19.8 and a prediction interval printer #9, a printer with a speed of 19.8 ppm. Perform an F test for the overall significance of the regression. What is the concept of OLS? (Give overall approach, and intuition behind such an approach.) What is the Gauss-Markov theorem? (In the process explain the statistical concepts of unbiased, consistency, and efficiency.)

2.

Assume that a trucking company had the following data that relates travel time (in hours) to (a) kilometers travelled and (b) number of deliveries.

Driving Assignment

X1 = KIlometers X2= Number of Y= Travel Time (hours) Traveled Deliveries 1 100 4 9.3 2 50 3 4.8 3 100 4 8.9 4 100 2 6.5 5 50 2 4.2 6 80 2 6.2 7 75 3 7.4 8 65 4 6.0 9 90 3 7.6 10 90 2 6.1 Assume that the computer software generated the following OLS regression result (some results are deliberately expunged (left blank) for exam purposes DEP VAR: TIME Variable C KILOMETERS DELIVERIES R-squared Adjusted Rsquared SE of regression Sum of squared residual Coefficient -0.867 0.9234 Std. Error 0.009888 0.2211 Mean dependent var S.D. dependent var F-statistic Prob-F t-Statistic -0.91 6.18 Prob. 0.392 0.004