求救...趕功課~唔識statistics...身在外國,沒人教路~(6)

HY Law

2007-04-01 7:03 am

g) 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 a negative residual? Explain.[2 Marks]
h) You see a “For Sale” sign on a 10-year-old stating the asking price as $1500. What is the residual?[2 Marks]
i) Would this regression model be useful in establishing a fair price for a 20-year-old car? Explain [2 Marks]

回答 (1)

myisland8132

2007-04-01 8:48 pm

✔ 最佳答案

(g)
I should buy the one with a negative residual.
Since the linear model is
price=a*(age)+b+ residual (where a and b are constant)
So if the price of the car has a negative residual , this means that its price is lower then we would expect using our linear model. This means we can buy the same thing (a car with same age and appear to be in equally good condition) with little money and this is good.
(i)
This regression model is not useful in establishing a fair price for a 20-year-old car.
Because the data of age we are using is only for 1-13. So this model can only be used to predict the price with the age between 1 and 13. outside this range, the prediction may be wrong.
For example, P = 12319.6 – 924A. If you substitute A=20, then P=-6164 and this is nonsence since P should be non-negative.

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