Totally lost with this question in CBE on regression analysis.

Ddan1liy15y ago

Please, is anybody able to explain the below question in CBE. I had no problem with all other questions in CBE demo, however this one I have no clue what they mean by independent, dependent variable and intercept.
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A company has established ten pairs of data for an independent variable and a dependent variable. It is using linear regression analysis to determine the line of best fit (y = a + bx) for the data. The following information is available:

The sum of the independent variable data is 1,600
The sum of dependent variable data is 2,910
The value of the intercept of the line of best fit is 168
What is the value of the slope in the equation for the line of best fit (to three decimal places)?

Ddan1liy15y ago#1

anyone?

Ddan1liy15y ago#2

Yeh, I ve sorted it out. This is the terminology:
• y = a + bx
• ‘a’ is the intercept, i.e. the point at which the line y = a + bx cuts the y axis (the value of y when x = 0).
• ‘b’ is the gradient/slope of the line y = a + bx (the change in y when x increases by one unit).
• ‘x’ = independent variable .
• ‘y’ = dependent variable (its value depends on the value of ‘x’).
• ‘a’ is the fixed cost per period (the intercept)
• ‘b’ is the variable cost per unit (the gradient)
• ‘x’ is the activity level (the independent variable)
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This is the solution:
a=?y/n-b*?x/n
168=2910/10-b*1600/10
168=291-b*160
b*160=291-168
b*160=123
b=123/160=0.769

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