Question 1
19 marks
Apartment prices against distance from the city: correlation, regression and a t-test
- Statistics and probability
(a)
1 mark
The prices fall steadily as the distance rises, so the ranks are exactly reversed.
(b)
4 marks
(i) Enter the pairs into the calculator.
(ii) The value of is close to .
(c)
3 marks
(i), (ii) The regression line of on .
(iii) is the price when . It represents the typical price (about $3.19 million) of an apartment in the centre of the city.
(d)
5 marks
(i) Substitute .
(ii) The distance 19.6 km is inside the range of the data (7 to 20.9 km), so this is interpolation, and the correlation is strong ().
(e)
1 mark
: the mean apartment price in is different from the mean price in .
(f)
2 marks
Enter the two samples into a two-sample -test with the variances pooled, two-tailed.
(g)
2 marks
Since , reject . There is sufficient evidence that the mean price in location is different from the mean price in location .
(h)
1 mark
Xavie has assumed that the prices in each location come from normal distributions.

