For Exercises 1–3, test whether a linear relationship exists between and , using level of significance .

Question 13.147

ageprice

3. Used Cars: Price versus Age. Do you think you can predict the price of a used car based on how old it is? The table shows the age (, in years) and the price (, in thousands of dollars) of 10 previously owned vehicles of the same make and model.

Car Age

Price

1 1 18.0
2 2 16.0
3 3 15.5
4 4 13.5
5 4 14.5
6 5 10.5
7 5 12.0
8 6 9.5
9 7 8.5
10 8 7.0

13.99.3

: There is no linear relationship between Age () and Price : There is a linear relationship between Age () and Price (). Reject if or . Since , we reject . There is evidence at level of significance that and that there is a linear relationship between Age () and Price ().