Chapter R, Problem 7.12RE

a.

To determine

Create suitable displays to explore the relationships between Cost and Mwatts, and that between Cost and Date.

Interpret the finding.

b.

To determine

Create a regression model of Cost on Mwatts and explain the relationship.

c.

To determine

Create a scatterplot of residuals versus predicted values and explain the findings.

Create a normal probability plot or histogram of residuals, to test whether the four assumptions are satisfied.

d.

To determine

Conduct a t-test to test the significance of the slope coefficient at 5% level of significance and provide the conclusion.

e.

To determine

Calculate the estimated cost a 1,000-mwatt plant.

f.

To determine

Calculate the residuals.

Explain the implication of R-squared for the model.

Construct a plot of the residuals versus Date.

Explain whether the variable, Date can account for some of the remaining variability.

g.

To determine

Create a multiple regression model of Cost on both Mwatts and Date.

Compare the coefficients of the predictors in this model, with those in the previous model.

h.

To determine

Explain whether Mwatts and Date are expected to be correlated.

Construct a scatterplot and find the correlation coefficient.