n=8 Σ(Y-Y)2 =10591 Y= 314.375

Question

Given a one independent variable linear equation that states cost in $K, and given the following information, calculate the standard error and determine its meaning. n=8 Σ(Y-Y)2 =10591 Y= 314.375

Answer 1

SE = √[Σ(Y-Y)²/(n-k-1)] SE = √(6874/6) SE = 33.8475 SE = +/- 33.85%

Answer 2

I interpret the question as the variance of 8 Y values (Y value minus the mean of Y=314.375, where the value of Y is an amount in thousands of dollars (symbolised by $K), so the mean is $314,375). The variance is therefore:

(Y1-mean)^2+(Y2-mean)^2+...+(Y8-mean)^2=10,591, where Y1 to Y8 make up the statistical set. Divide this number by n, giving 10591/8, and take the square root to get the standard error (standard deviation): 36.385. This means that the standard error on the mean is +36.385 so:

277.990<Y<350.760, where Y is in $K, gives range of possible values for Y, where the mean sits in the exact middle of the range.