Basic Business Statistics, Student Value Edition
14th Edition
ISBN: 9780134685113
Author: Mark L. Berenson, David M. Levine, David F. Stephan, Kathryn Szabat
Publisher: PEARSON
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Chapter 17, Problem 16PS
a.
To determine
Perform a multiple correspondence analysis of the data.
b.
To determine
Explain the customer patterns suggested by the analysis.
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3. Bayesian Inference – Updating Beliefs
A medical test for a rare disease has the following characteristics:
Sensitivity (true positive rate): 99%
Specificity (true negative rate): 98%
The disease occurs in 0.5% of the population.
A patient receives a positive test result.
Questions:
a) Define the relevant events and use Bayes’ Theorem to compute the probability that the patient actually has the disease.b) Explain why the result might seem counterintuitive, despite the high sensitivity and specificity.c) Discuss how prior probabilities influence posterior beliefs in Bayesian inference.d) Suppose a second, independent test with the same accuracy is conducted and is also positive. Update the probability that the patient has the disease.
4. Linear Regression - Model Assumptions and Interpretation
A real estate analyst is studying how house prices (Y) are related to house size in square feet (X). A simple
linear regression model is proposed:
The analyst fits the model and obtains:
•
Ŷ50,000+150X
YBoB₁X + €
•
R² = 0.76
• Residuals show a fan-shaped pattern when plotted against fitted values.
Questions:
a) Interpret the slope coefficient in context.
b) Explain what the R² value tells us about the model's performance.
c) Based on the residual pattern, what regression assumption is likely violated? What might be the
consequence?
d) Suggest at least two remedies to improve the model, based on the residual analysis.
Chapter 17 Solutions
Basic Business Statistics, Student Value Edition
Ch. 17 - The business problem facing a consumer products...Ch. 17 - Prob. 2PSCh. 17 - Prob. 3PSCh. 17 - The owner of a moving company typically has his...Ch. 17 - A hotel has designed a new system for room service...Ch. 17 - A marketing manager wants to predict customers...Ch. 17 - An automotive insurance company wants to predict...Ch. 17 - Undergraduate students at Miami University in...Ch. 17 - Prob. 9PSCh. 17 - The file Cereals contains the calories,...
Ch. 17 - The file Protein contain calorie and cholesterol...Ch. 17 - Prob. 12PSCh. 17 - The file MobileSpeed contains the overall download...Ch. 17 - Prob. 14PSCh. 17 - Prob. 15PSCh. 17 - Prob. 16PSCh. 17 - Prob. 17PSCh. 17 - Prob. 18PSCh. 17 - Prob. 19PSCh. 17 - Prob. 20PSCh. 17 - Prob. 21PSCh. 17 - Prob. 22PSCh. 17 - What is the difference between supervised and...Ch. 17 - Prob. 24PSCh. 17 - Prob. 25PSCh. 17 - How does cluster analysis differ from...Ch. 17 - Prob. 27PSCh. 17 - Prob. 28PSCh. 17 - The file FTMBA contains a sample of top-ranked...Ch. 17 - Prob. 30PSCh. 17 - Prob. 31PSCh. 17 - Prob. 32PSCh. 17 - Prob. 33PSCh. 17 - Prob. 34PSCh. 17 - Prob. 35PSCh. 17 - In recent years, the share of Greek yogurts in the...
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