Question

1. Each month, the owner of Fay's Tanning Salon records in a data file the monthly total sales receipts and the amount spend that month on advertising. (a) Identify the two variables. (b) For each variable, indicate whether it is quantitative or categorical. (c) Identify the response variable and the explanatory variable.

Answer 1

Solution:

a) Here two variables are amount spent on advertising and total sales receipts.

b) Quantitative Variable :

A quantitative variable is measured as a number for which meaningful arithmetic operations

make sense.

Examples: Height, age, crop yield , GPA, salary, temperature, area, air pollution index , etc.

Categorical Variable:

Any variable that is not quantitative is categorical. Categorical variables take a value that is one of several possible categories. As naturally measured , categorical variables have no numerical meaning.

Examples: Hair color, gender, field of study, college attended, political affiliation, status of disease infection, etc.

Here, both variables , amount spent on advertising and total sales receipts are quantitative.

c) A response variable is the outcome variable on which comparisons are made. The explanatory variable defines the group to be compared  with respect to values on the response variable.Here we would use the amount spent on advertising to predict monthly total sales. Hence, amount spent on advertising is an explanatory variable and total sales is a response variable.

Please up vote the solution if it helpful thanks..