Edexcel S1 2003 January — Question 6

Exam BoardEdexcel
ModuleS1 (Statistics 1)
Year2003
SessionJanuary
TopicLinear regression
TypeCalculate y on x from raw data table

6. The chief executive of Rex cars wants to investigate the relationship between the number of new car sales and the amount of money spent on advertising. She collects data from company records on the number of new car sales, \(c\), and the cost of advertising each year, \(p\) (£000). The data are shown in the table below.
YearNumber of new car sale, \(c\)Cost of advertising (£000), \(p\)
19904240120
19914380126
19924420132
19934440134
19944430137
19954520144
19964590148
19974660150
19984700153
19994790158
  1. Using the coding \(x = ( p - 100 )\) and \(y = \frac { 1 } { 10 } ( c - 4000 )\), draw a scatter diagram to represent these data. Explain why \(x\) is the explanatory variable.
  2. Find the equation of the least squares regression line of \(y\) on \(x\). $$\text { [Use } \left. \Sigma x = 402 , \Sigma y = 517 , \Sigma x ^ { 2 } = 17538 \text { and } \Sigma x y = 22611 . \right]$$
  3. Deduce the equation of the least squares regression line of \(c\) on \(p\) in the form \(c = a + b p\).
  4. Interpret the value of \(a\).
  5. Predict the number of extra new cars sales for an increase of \(\pounds 2000\) in advertising budget. Comment on the validity of your answer.
    (2)