Question

1. Consider the relationship between the number of bids an item on eBay received and the item's selling price. The following is a sample of 55 items sold through an auction.

Price in Dollars	2222	2626	2727	3636	4545
Number of Bids	11	44	55	55	77

Step 1 of 5: Calculate the sum of squared errors (SSE). Use the values b0= −1.9336 and b1= 0.2030 for the calculations. Round your answer to three decimal places.

Step 2 of 5: Calculate the estimated variance of errors, s2e. Round your answer to three decimal places.

Step 3 of 5: Calculate the estimated variance of slope, s2b1. Round your answer to three decimal places.

Step 4 of 5: Construct the 80% confidence interval for the slope. Round your answers to three decimal places.

Lower endpoint:

Upper endpoint:

Step 5 of 5: Construct the 98% confidence interval for the slope. Round your answers to three decimal places.

Lower endpoint:

Upper endpoint:

Answer 1

step 1:

SSE =Syy-(Sxy)2/Sxx=

5.069

Step 2 of 5:

error Variance σ2 =

s2 =SSE/(n-2)

=

1.690

Step 3 of 5:

Calculate the estimated variance of slope,=s²/Sxx =0.005

Step 4 of 5:

for 80 % CI value of t=					1.6380
margin of error E=t*std error                            =					0.115
lower confidence bound=estimated slope-margin of error =					0.088
Upper confidence bound=estimated slope+margin of error=					0.318

Step 5 of 5:

for 98 % CI value of t=					4.5410
margin of error E=t*std error                            =					0.319
lower confidence bound=estimated slope-margin of error =					-0.116
Upper confidence bound=estimated slope+margin of error=					0.522