Question

4. 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).

   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

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

   2. Develop the least squares estimated regression equation. (show all values and work)

   3. Provide an interpretation for the slope of the estimated regression equation. (show all values and work)

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

Answer 1