Find out if x and y are significantly related. Use a significance level of α =...

Find out if x and y are significantly related. Use a significance level of α = 0.01. Also calculate the sample correlation coefficient between the price and the number of flash drives sold. Show all work -

Price (x)	Units sold (y)
34	4
36	4
32	6
35	5
31	9
38	2
39	1

Solutions

Expert Solution

correlation coefficient r=

S_xy/(√S_xx*S_yy) =-44/sqrT(52*41.71) =

-0.945

degree of freedom =n-2=7-2 =5

test for significance:

null hypothesis: Ho: ρ	=	0
Alternate Hypothesis: Ha: ρ	≠	0

0.01 level,two tail test and n-2= 5 df, critical t=		4.032
Decision rule: reject Ho if absolute value of test statistic \|t\|>4.032

test stat t=

r*(√(n-2)/(1-r²))=-0.945*sqrt((7-2)/(1-(-0.945)^2)) =

-6.444

since test statistic falls in rejection region we reject null hypothesis
we have sufficient evidence to conclude that there is a significant linear relationship between variables

orchestra answered 1 year ago

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