Question

4. 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 5 items sold through an auction.

Price in Dollars 137 137 151 180 187

Number of Bids 11 12 15 16 17

Step 1 of 5: Calculate the sum of squared errors (SSE). Use the values b0= −1.8618 and b1= 0.1014 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 98% confidence interval for the slope. Round your answers to three decimal places.

Lower endpoint and Upper endpoint

Step 5 of 5: Construct the 90% confidence interval for the slope. Round your answers to three decimal places.

Lower endpoint and Upper endpoint

Answer 1

Step 1 of 5:

SSE =Syy-(Sxy)2/Sxx=

3.628

Step 2 of 5:

error Variance σ2 =

s2 =SSE/(n-2)

=

1.209

Step 3 of 5:

estimated variance of slope =s²/SSxx =0.001

Step 4 of 5:

for 98 % CI value of t=					4.5410
margin of error E=t*std error                            =					0.105
lower confidence bound=estimated slope-margin of error =					-0.004
Upper confidence bound=estimated slope+margin of error=					0.207

Step 5 of 5:

for 90 % CI value of t=					2.3530
margin of error E=t*std error                            =					0.054
lower confidence bound=estimated slope-margin of error =					0.047
Upper confidence bound=estimated slope+margin of error=					0.156