A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | }
\hline \text { Movie } & \begin{array} { c }
\text { Cost of two highest- } \
\text { paid performers } ( \$ \mathrm {~m} )
\end{array} & \begin{array} { c }
\text { Gross revenue } \
( \$ \mathrm {~m} )
\end{array} \
\hline 1 & 5.3 & 48 \
\hline 2 & 7.2 & 65 \
\hline 3 & 1.3 & 18 \
\hline 4 & 1.8 & 20 \
\hline 5 & 3.5 & 31 \
\hline 6 & 2.6 & 26 \
\hline 7 & 8.0 & 73 \
\hline 8 & 2.4 & 23 \
\hline 9 & 4.5 & 39 \
\hline 10 & 6.7 & 58 \
\hline
\end{array}$$ Assume that the conditions for the tests conducted in the previous two questions are not met. Do the data allow us to infer at the 5% significance level that payment to the two highest-paid performers and gross revenue are linearly related?

Question

A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | } 
\hline \text { Movie } & \begin{array} { c } 
\text { Cost of two highest- } \
\text { paid performers } ( \$ \mathrm {~m} )
\end{array} & \begin{array} { c } 
\text { Gross revenue } \
( \$ \mathrm {~m} )
\end{array} \
\hline 1 & 5.3 & 48 \
\hline 2 & 7.2 & 65 \
\hline 3 & 1.3 & 18 \
\hline 4 & 1.8 & 20 \
\hline 5 & 3.5 & 31 \
\hline 6 & 2.6 & 26 \
\hline 7 & 8.0 & 73 \
\hline 8 & 2.4 & 23 \
\hline 9 & 4.5 & 39 \
\hline 10 & 6.7 & 58 \
\hline
\end{array}$$ Assume that the conditions for the tests conducted in the previous two questions are not met. Do the data allow us to infer at the 5% significance level that payment to the two highest-paid performers and gross revenue are linearly related?

Quizplus · Accepted Answer

The Answer of A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | } 
\hline \text { Movie } & \begin{array} { c } 
\text { Cost of two highest- } \
\text { paid performers } ( \$ \mathrm {~m} )
\end{array} & \begin{array} { c } 
\text { Gross revenue } \
( \$ \mathrm {~m} )
\end{array} \
\hline 1 & 5.3 & 48 \
\hline 2 & 7.2 & 65 \
\hline 3 & 1.3 & 18 \
\hline 4 & 1.8 & 20 \
\hline 5 & 3.5 & 31 \
\hline 6 & 2.6 & 26 \
\hline 7 & 8.0 & 73 \
\hline 8 & 2.4 & 23 \
\hline 9 & 4.5 & 39 \
\hline 10 & 6.7 & 58 \
\hline
\end{array}$$ Assume that the conditions for the tests conducted in the previous two questions are not met. Do the data allow us to infer at the 5% significance level that payment to the two highest-paid performers and gross revenue are linearly related?

A Financier Whose Specialty Is Investing in Movie Productions Has