Question

In: Statistics and Probability

The following data represent the daily supply (y in thousands of units) and the unit price...

The following data represent the daily supply (y in thousands of units) and the unit price (x in dollars) for a product.

Daily Supply (y)

Unit Price (x)

  5

  2

  7

  4

  9

  8

12

  5

10

  7

13

  8

16

16

16

  6

​

a.

Compute and interpret the sample covariance for the above data.

b.

Compute the standard deviation for the daily supply.

c.

Compute the standard deviation for the unit price.

d.

Compute and interpret the sample correlation coefficient.

Solutions

Expert Solution

Answer a)

Cov(x,y) = 11.429


Answer b)

Based on the above table, the following is calculated:

sy = sqrt(SSYY/(n-1)) = sqrt(112/7)

sy = 4

Answer c)

Based on the above table, the following is calculated:

sx = sqrt(SSXX/(n-1)) = sqrt(122/7)

sx = 4.1748

Answer d)

Correlation coefficient = Cov(x,y)/(sx*sy) = 11.429/(4.1748*4)

Correlation coefficient = 0.6844

orchestra answered 2 years ago
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