b) The following Data relates the cost of production and sales prices of 1986-1994. Established the coefficient of correlation between cost and prices. \begin{tabular}{|l|l|l|l|l|l|} \hline Year & 1986 & 1987 & 1988 & 1989 & 1990 \\ \hline Costs & 203 & 216 & 223 & 239 & 248 \\ \hline Prices & 242 & 225 & 250 & 277 & 271 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|} \hline Year & 1991 & 1992 & 1993 & 1994 \\ \hline Costs & 253 & 279 & 301 & 311 \\ \hline Prices & 255 & 270 & 318 & 350 \\ \hline \end{tabular}
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This will help in calculating the necessary statistical values. | Year | Costs | Prices | |------|-------|--------| | 1986 | 203 | 242 | | 1987 | 216 | 225 | | 1988 | 223 | 250 | | 1989 | 239 | 277 | | 1990 | 248 | 271 | | 1991 | 253 | Show more…
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(b) Compute the correlation coefficient between the price of eggs and the price of milk. Round the answer to at least three decimal places. The correlation coefficient is r =
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A regression equation is set up, where the dependent variable is total costs and the independent variable is production. A correlation coefficient of 0.70 implies that: a. The coefficient of determination is negative. b. The level of production explains 49% of the variation in total costs c. There is a slightly inverse relationship between production and total costs. d. A correlation coefficient of 1.30 would produce a regression line with better fit to the data.
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