Calculate the fitted y; for each value of x¡ used to fit the model. Then construct a graph of y; versus the correspon- ding observed value y, and comment on what this plot would look like if the relationship between y and x was a deterministic (no random error) straight line. Does the plot actually obtained indicate that taxes paid is an effec- tive regressor variable in predicting selling price?

Statistics Canada produces consumer price indexes for several different categories. Shown here are the percentage changes in consumer price indexes over a period of 22 years for durable goods, semidurable goods, and nondurable goods. Also displayed are the percentage changes in total goods price index. Use these data and multiple regression to develop a model that attempts to predict the total goods index by the other three variables. Comment on the result of this analysis. Year   TotalGoods   DurableGoods   SemidurableGoods   NondurableGoods 1   85.7   89.4   91.9   83.2 2   86.4   90.4   92.5   83.8 3   87.8   92.5   93.4   85.2 4   86.8   96.0   94.2   81.6 5   88.4   99.0   94.9   82.9 6   89.9   100.8   95.4   84.4 7   91.2   101.6   97.0   86.0 8   91.4   101.5   97.7   86.1 9   93.1   101.5   99.2   88.4 10   96.0   100.8   99.6   93.3 11   98.4   100.1   100.3   97.4 12   100   100   100   100 13   101.9   99.2…

Can that regression be used to estimate the effect of the national unemployment rate on an individual’s earnings? Explain.

RequiredPage 92 The company uses the number of professional hours as the cost driver for office support costs. Use an algebraic equation to describe how total office support costs can be ­estimated. Use a spreadsheet program to perform a regression analysis. Use office support costs as the dependent variable (Y) and the professional hours as the independent variable (X). Determine the total fixed cost per office and variable cost per professional hour. Identify the R2 statistic provided by the Excel program and explain what it means. Mr. Dean plans to open a new branch office in a Dallas suburb. He expects that the monthly professional hours will be 3,000. Estimate the total office support cost for Mr. Dean. What portion of the total cost is fixed and what portion is variable? Explain how multiple regression analysis could be used to improve the accuracy of the cost estimates.   *You will use excel to setup a worksheet with your data and run regression analysis.*