Chapter 16.1, Problem 8E

Corvette, Ferrari, and Jaguar produced a variety of classic cars that continue to increase in value. The following data, based upon the Martin Rating System for Collectible Cars, show the rarity rating (1-20) and the high price ($1000) for 15 classic cars.

Year	Make	Model	Rating	Price ($1000)
19S4	Chevrolet	Corvette	18	1600.0
1956	Chevrolet	Corvette 265/225-hp	19	4000.0
1963	Chevrolet	Corvette coupe (340-bhp 4-speed)	18	1000.0
197S	Chevrolet	Corvette coupe Silver Anniversary	19	1300.0
1960-1963	Ferrari	250 GTE 2+2	16	350.0
1962-1964	Ferrari	250 GTL Lusso	19	2650.0
1962	Ferrari	250 GTO	18	375.0
1967-196S	Ferrari	275 GTB/4 NART Spyder	17	450.0
196S-1973	Ferrari	365 GTB/4 Daytona	17	140.0
1962-1967	Jaguar	E-type OTS	15	77.5
1969-1971	Jaguar	E-type Series II OTS	14	62.0
1971-1974	Jaguar	E-type Series III OTS	16	125.0
1951-1954	Jaguar	XK 120 roadster (steel)	17	400.0
1950-1953	Jaguar	XK C-type	16	250.0
1956-1957	Jaguar	XKSS	13	70.0

1. a. Develop a scatter diagram of the data using the rarity rating as the independent variable and price as the independent variable. Does a simple linear regression model appear to be appropriate?
2. b. Develop an estimated multiple regression equation with x = rarity rating and x² as the two independent variables.
3. c. Consider the nonlinear relationship shown by equation (16.7). Use logarithms to develop an estimated regression equation for this model.
4. d. Do you prefer the estimated regression equation developed in part (b) or part (c)? Explain.