Coffee is a leading export from several developing countries. When coffee prices
ID: 3436728 • Letter: C
Question
Coffee is a leading export from several developing countries. When coffee prices are high, farmers often clear forest to plant more coffee trees. Here are five years' data on prices paid to coffee growers in Indonesia
Price ($US per pound)
0.26
0.35
0.58
0.55
0.79
Forest lost (percent)
0.24
1.64
1.62
1.54
3.01
What is the correlation (± 0.01) between the price of coffee and the forest loss
in US dollars?
What is the correlation (± 0.01) between the price of coffee and the forest loss
in Russian rubles, if the exchange rate is 26 Russian rubles per US dollar ?
Price ($US per pound)
0.26
0.35
0.58
0.55
0.79
Forest lost (percent)
0.24
1.64
1.62
1.54
3.01
Explanation / Answer
r = 0.8926
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If we exchange to Russian rubles data will be
correlation between (x,26y)
= coor (x,y)
=0.8926
X Y XY XX YY 0.26 0.24 0.0624 0.0676 0.0576 0.35 1.64 0.574 0.1225 2.6896 0.58 1.62 0.9396 0.3364 2.6244 0.55 1.54 0.847 0.3025 2.3716 0.79 3.01 2.3779 0.6241 9.0601 2.53 8.05 4.8009 1.4531 16.8033