**Activity I** – A manager claims that increases in advertising expenditure will surely raise the firm’s profits, citing his sense that people find the firm’s ads entertaining.

- Sketch how you might refute this claim using:
- A theoretical argument
- Data

- Why might the refutation using data be more convincing?

**Activity II** – A grocery store manager is interested in the data-generating process for her store’s weekly soda sales. She believes factors impacting these sales include price, product placement, and whether the week contains a holiday. Write out a formal representation of the data-generation process for weekly soda sales that incorporates these and additional factors.

**Activity III** – Access the dataset *Sales and Costs.xlsx (See the attached)* and answer the following questions.

- Calculate these descriptive statistics.
- Mean of sales
- Variance of materials costs
- Covariance of labor costs and materials costs
- Mean of labor costs
- Total sales

- Calculate at least two more descriptive statistics for this dataset.

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