In the upcoming lab session you are going to work on TWO dat

In the upcoming lab session, you are going to work on TWO data sets of sales and advertising for two companies. In each data set, you have data of sales and advertising expenditure. The goal is to answer questions about how advertising impact sales. For each question, state the specific statistics or plot you are going to use.

a) What is the dependent variable and independent variable?

b) What statistics are you going to use to determine if there is a relationship between advertising and sales?

c) What statistics are you going to use to determine how strong is the relationship?

d) How are you going to determine what happen if the company decides NOT to advertise?

e) How are you going to determine if the conditions of the regressions are met?

f) How are you going to compare WHICH company is more effective in advertising?

Solution

a)The dependent variable is sales and the independent variable is advertising.

b)One should use correlation coefficient to determine if there is a relationship between advertising and sales.

c)The correlation coefficient should be used to determine how strong is the relationship.