## Related questions with answers

Concur Technologies, Inc., is a large expense-management company located in Redmond, Washington. The Wall Street Journal asked Concur to examine the data from 8.3 million expense reports to provide insights regarding business travel expenses. Their analysis of the data showed that New York was the most expensive city, with an average daily hotel room rate of $198 and an average amount spent on entertainment, including group meals and tickets for shows, sports, and other events, of$172. In comparison, the U.S. averages for these two categories were $89 for the room rate and$99 for entertainment. The following table shows the average daily hotel room rate and the amount spent on entertainment for a random sample of 9 of the 25 most visited U.S. cities (The Wall Street Journal, August 18, 2011).

$\begin{array}{lcr}\text { City } & \begin{array}{c}\text { Room Rate } \\ (\$)\end{array} & \begin{array}{r}\text { Entertain } \\ \text{ (\$) }\end{array} \\ \text { Boston } & 148 & 161 \\ \text { Denver } & 96 & 105 \\ \text { Nashville } & 91 & 101 \\ \text { New Orleans } & 110 & 142 \\ \text { Phoenix } & 90 & 100 \\ \text { San Diego } & 102 & 120 \\ \text { San Francisco } & 136 & 167 \\ \text { San Jose } & 90 & 140 \\ \text { Tampa } & 82 & 98\end{array}$

a. Develop a scatter diagram for these data with the room rate as the independent variable.

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

c. Develop the least squares estimated regression equation.

d. Provide an interpretation for the slope of the estimated regression equation.

e. The average room rate in Chicago is $128, considerably higher than the U.S. average. Predict the entertainment expense per day for Chicago.

Solution

Verified**a)** For this exercise, we are to develop a scatter diagram for the given table with the room rate as the independent variable.

$\small \text{Table 1. Given values.}$

City |
Room Rate ($) |
Entertainment ($) |
---|---|---|

Boston | $148$ | $161$ |

Denver | $96$ | $105$ |

Nashville | $91$ | $101$ |

New Orleans | $110$ | $142$ |

Phoenix | $90$ | $100$ |

San Diego | $102$ | $120$ |

San Francisco | $136$ | $167$ |

San Jose | $90$ | $140$ |

Tampa | $82$ | $98$ |

*What is the relationship of the independent variable to the coordinates of point?*

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