Consumer Reports tested 19 different brands and models of road, fitness, and comfort bikes. Road bikes are designed for long road trips; fitness bikes are designed for regular workouts or daily commutes; and comfort bikes are designed for leisure rides on typically flat roads. The following data show the type, weight (lb.), and price for the 19 bicycles tested (Consumer Reports website, February 2009). 1. Develop a scatter diagram with weight as the independent variable and price as the dependent variable. Does a simple linear regression model appear to be appropriate?
2. Develop an estimated multiple regression equation with x weight and x2 as the two independent variables.
3. Use the following dummy variables to develop an estimated regression equation that can be used to predict the price given the type of bike: Type Fitness 1 if the bike is a fitness bike, 0 otherwise; and Type-Comfort m 1 if the bike is a comfort bike; 0 otherwise. Compare the results obtained to the results obtained in part (b).
4. To account for possible interaction between the type of bike and the weight of the bike, develop a new estimated regression equation that can be used to predict the price of the bike given the type, the weight of the bike, and any interaction between weight and each of the dummy variables defined in part (c). What estimated regression equation appears to be the best predictor of price? Explain