Question

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

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

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

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

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

*Please note: Some work has been done, I need help with numbers 3-5. Please show work so I will understand how you got the answer.

Answer 1

We can use here Excel for scatter plot and regression eqution

Step 1) Enter data in Excel.

Step2) Select data >>Scatter >>Select scatter with fx

From above scatterplot we can say that very strong association between the two variables.

the least squares estimated regression equation

Entertainment =1.033*Room rate +17.49

If Room rate increase by 1 unit We predict Entertainment will increase approximately by 1.033

Substitute Room rate =$128 into regression equation

=> Entertainment =1.033*Room rate +17.49

=1.033*128+17.49

=149.71