Answer to Question #286380 in Microeconomics for mukti

Question

Outside Magazine tested 10 different models of day hikers and backpacking boots. The

following data show the upper support and price for each model tested. Upper support

was measured using a rating from 1 to 5, with a rating of 1 denoting average upper sup-

port and a rating of 5 denoting excellent upper support (Outside Magazine Buyer’s

Guide, 2001).

a. Use these data to develop an estimated regression equation to estimate the price of a

day hiker and backpacking boot given the upper support rating.

b. At the .05 level of significance, determine whether upper support and price are

related.

c. Would you feel comfortable using the estimated regression equation developed in

part (a) to estimate the price for a day hiker or backpacking boot given the upper sup-

port rating?

d. Estimate the price for a day hiker with an upper support rating of 4.

Answer 1

We present the solution in EXCEL

a)Y=20x

b)upper support and price are related

c) the estimated  regression equation is reliable, since

$R^2=1$ The closer the value of the coefficient is to 1, the stronger the dependence. When evaluating regression models, this is interpreted as the fit of the model to the data.

d)price for a day hiker with an upper support rating of 4 is 80.