1. A taxicab company manager believes that the monthly repair costs (y) of cabs are related to age (x) of the cabs. Eight cabs are selected randomly and from their records we obtained the following data:

ï" x =134, ï" y = 410, ï" x2 =3 020, ï"y2=24000, and ï" xy =8340.

Estimate the linear regression line.

2. Using the data given in the taxicab company problem (the above problem) compute R2, interpret its meaning.

3. You are interested in comparing four methods of teaching. You randomly assign 20 students to each of the four methods and then administer a standardized test at the end of the study.

What null hypotheses are you interested in testing?
What statistical procedure might you use to test the hypothesis?

4. Suppose you are interested in determining the average number of years that employees of a company stay with the company. If past information shows a standard deviation of 7 months, what size sample should be taken so that at 95% confidence the sampling error will be 2 months or less?

5. We are interested in determining whether or not the variances of the sales at two small grocery stores are equal. A sample of 16 days of sales at each store indicated the following:

Store A Store B
n1 = 16 n2 = 16
Mean 1 = 300 Mean 2 = 310
S1 = $12 S2 = $10

Are the variances of the populations (from which these samples came) equal? Use ? =0.05