Question 1
a)
age x 8 3 6 5 5 2 8 10 9 8 2 3 2 2
cost 6 18 1 7 1 16 3 3 7 9 11 1 15 2
0 1 0 0
n ∑ xy−∑ x ∑ y
r=
√ n ∑ x 2−(∑ x)2 ¿¿ ¿
❑ 2
∑y ∑x ∑y ∑ xy
2 ❑
∑x ❑
146 493 1880 595 73
n ∑ xy−∑ x ∑ y
r=
√ n ∑ x 2−(∑ x)2 ¿¿ ¿
14 ( 595 ) 73(146)
r=
√ 14 ( 493 )−73 ¿ ¿ ¿
2
−2328
r=
√(1573)(5004 )
r =−0.82977427
The coefficient of determination is r 2
∴ → -0.82977427
r
2
=0.6885
68.85% of the variation in estimated price is explained by the
age of the car.
There is positive association between the age and cost is positive
and fair.
b) y=a+bx
∑ y−b ∑ x
a=
n
146−(−1.4799745671 )
a=
14
254.0381437
a=
14
a = 18.14558169
n ∑ xy−∑ x ∑ y
b= 2
∑ n x −¿ ¿
14(595)−106.58
= 14 (493)−(73)²
8330−10659
= 1573
−2328
= 1573
b = 1.479974571
equation is = y = 18.1456 + (1.479974571) x
y = 18.1456 – 1.4794
cost of a four-year-old car
y when x = 4 ∴ y = 18.1456 + (1.479974571) (4)
y = 18.1456 – 5.9196
y = 12.226
the cost of a four car is 12.226
the slope coefficient of the regression equation they contain a
negative relationship as ‘b’ represents the coefficient of the
equation.
Question 2
a)
toothpaste
shampoo
coughdrops
toilet-paper
∑ PnQo
Laspeyre price index. LPI = ¿
∑ PoQo 100
53.91
= ¿
36.35 100
= 147.0941337
∑ PnQn
Paasche price index PPI = ¿
∑ PoQn 100
65.08
= ¿
43.32 100
= 150.2308403
Fisher idel index = √ LP ⁰¹ +¿ PP ⁰¹ ¿
√ 147.09+¿ 150.2308 ¿
= 145.6
b)
i. The cpl of 1445.21 show there was a high rate of infla-
tion from 2019 to 2020
ii. The purchasing power of the ZWL$ in June 2020,
based on the period February 2019
38.8
Change in the Cpl ¿ 2
100
= 1445.2
∗100
= 0.069194575 * 100
= 6.919457515%
= 6.9195%
Purchasing power = 100-6.9193
= 93.0805%
This means that the dollar has 93.0805% less purchas-
ing power in 2018 compared to February 2019
You will need $1445.5 to purchase what cost $1 in
2019
1445.5
= 100 ∗21
iii. The employee’s real monthly income for June 2020
12000
= 1445.21
∗100
= 830.33
This show that there are high rates of inflation and
there are low levels of living standards as compared to
2019.
QUESTION 3
a) H ₀: P=0
H ₁: P ≠ 0
We use t distribution
Critical value: two tailed tes
t 0.5(14-2) = t (12) = 0.78
00.5
r
t 0.05=
√( 1−r )−1 n−2
2
−0.82977427
¿
√0.311474661/12
0.82977427
= 0.161109347
= -5.15037945
= -5.1504
we accept H ₀ since -5.1504 ˂ 1.78
conclusion: the age and cost are not correlated.
b)
(165.28 )−21(46.95)
b=
6 ( 91 )−(441)
5.73
= 546−441
5.73
= 105
= 0.054571428
= 0.0546
∑ y−b ∑ x
a=
n
49.95−0.0546(21)
6
49.95−1.1466
6
45.8034
6
= 7.6339
7.6339 + 0.054571 x
^y = 7.6339 + 0.054571 x
c) y when x=2
y = 7.63 + 0.0546(2)
= 7.739
y when x=6
= 7.63 + 0.0546(6)
= 7.957
(2:7.739)
(6:7.957)
Year 2012 2013 2014 2015 2016 2017
sales 7.45 7.83 8.07 7.94 7.76 7.90
Data
Chart Title
8.2
8.07
0
8 7.94
0
7.9
0
7.83
0
7.8 7.76
0
7.6
7.45
0
7.4
7.2
7
2012 2013 2014 2015 2016 2017
y=a+bx
∑ x=¿21
∑ x = 91
2
∑ xy = 165.28
∑ y=¿ 46.95
(∑ x )² = 441
n ∑ xy−∑ x ∑ y
b= 2
n ∑ x −¿ ¿
