Answer to Question #246495 in Economics for Lwazi

Question

The following data was collected based on the demand for beer in mls and its price in Cents per kg
collected from 15 different market stalls over a week period. Enter this data on an Excel file and
then use it to answer the following questions.
Beer (ml) 98 92 82 74 63 57 73 110 84 68 40 45 47 39 58
Price (cents) 24 22 23 26 27 24 25 28 21 26 31 33 35 37 29
1. What type of data are we dealing with? (2)
2. Compute a scatter plot that represents the price and quantity of beer (5)
3. Interpret the scatter plot by explaining the relationship that appears between price and quantity.
(3)
4. Use the under-mentioned formulae to calculate the correlation coefficient. Explain the intuitive
logic of this correlation coefficient. (10)
5. Interpret the correlation coefficient how strong is the degree of linear association between the
price and quantity of beer. Explain the coefficient sign of the correlation in (4)

Answer 1

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