Answer Happy

4. Consider an auto dealership It has monthly data ( for the last 15 months) on its sales in that month, and on the amount of advertising ( measured in dollars spent on ads) that the dealership bought during that month. Across the 15 data points, it finds the following statistics: - Correlation coefficient between Sales and Ad Spending = .4 Standard Deviation of Sales - $31,250 - Standard Deviation of Ad Spending - $ 5000 - Mean Level of Sales = $ 350,000 Mean Level of Ad Spending - $ 50,000 a.) Solve for both "a" and "6" of a regression run on this data (where Sales" is the y-variable and "Ad Spending" is the x-variable). (4) b.) Suppose that , next month, the dealership plans to spend $ 40,000 on ads. Use your answers to a.) to predict the amount of sales at the dealership next month. (4) c.) Suppose that the actual sales next month $ 305,000. Solve for the error term" associated with that month's data. (3) d.) Show your answer to c.) on a relevant graph ( you'll need to include a line in your graph: label (with specific numbers) the y-intercept of that line and the slope of that line). (4)