Question

A regression equation that describes the relationship between the amount of the bill ($) at a restaurant and the tip ($) that was left is: Tip = 2.9 + 0.1 Bill

Ignoring the intercept...does the slope of the equation suggest that customers, on average, are tipping at least 15%? Why or why not?

The correlation between these two variables is 0.586. Assuming a scatterplot does confirm a linear relationship between the variables, COMPLETELY describe the relationship between the variables based on the correlation. (Hint: You should provide at least three key words to describe the relationship.)

Answer 1

The regression coefficient is 0.1 which means, on average with a unit change in the bill there will be 0.1 change in the tip.

That means if Bill is increased by $1 then the Tip will be increased by $0.1 (or 10% )

The correlation between these two variables is 0.586 which is a positive correlation. That means if Bill amount is increased, the Tip amount will also be increased.

Thank You.