More used cars 2014 Use the advertised prices for Toyota

Chapter 6, Problem 61E

(choose chapter or problem)

Problem 61E

More used cars 2014 Use the advertised prices for Toyota Corollas given in Exercise 59 to create a linear model for the relationship between a car’s Age and its Price.

a) Find the equation of the regression line.

b) Explain the meaning of the slope of the line.

c) Explain the meaning of the y-intercept of the line.

d) If you want to sell a 7-year-old Corolla, what price seems appropriate?

e) You have a chance to buy one of two cars. They are about the same age and appear to be in equally good condition. Would you rather buy the one with a positive residual or the one with a negative residual? Explain.

f) You see a “For Sale” sign on a 10-year-old Corolla stating the asking price as $8,500. What is the residual?

g) Would this regression model be useful in establishing a fair price for a 25-year-old car? Explain.