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 avg daily hotel room rate of $198 and an avg amount speny 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 $99 for entertainment the following table shows the average daily hotel room rate and the amount spent on the entertainment for a sample of 9 of the 25 most visited U.S cities Room Rate EntertainmentCity ($) ($)Boston 148 161Denver 96 105Nashville 91 101New orleans 110 142Phoenix 90 100San Diego 102 120San Francisco 136 167San Jose 90 140Tampa 82 98 develop a scatter diagram for these data with the room rate as the independent variablewhat does the scatter diagram developed in part (a.) indicate about the relationship between the two variablesdevelop the least squares estimated regression equationprovide an interpretation for the slope of the estimated regression equationthe avg room rate in Chicago is $128 considerably higher than the U.S avg predict the entertainment expense per day in Chicago

Answer 1

Answer:

Step-by-step explanation:

Hello!

Given the variables

X: daily hotel room rate

Y: amount spent on the entertainment

See second attachment for scatter plot.

The population regression equation is E(Yi)= α + βXi

To estimate the y-intercept and the slope of the regression equation you have to apply the following formulas:

$b= \frac{sum XY-\frac{(sumX)(sumY)}{n} }{sumX^2-\frac{(sumX)^2}{n} }$

a= Y[bar]-bX[bar]

n= 9; ∑X= 945; ∑X²= 103325; ∑Y= 1134 ∑Y²= 148804; ∑XY= 123307

X[bar]= ∑X/n= 945/9= 105

Y[bar]= ∑Y/n= 1134/9= 126

$b= \frac{123307-\frac{945*1134}{9} }{103325-\frac{(945)^2}{9} }= 1.03$

a= 126 - 1.03*105= 17.49

^Y= 17.49 + 1.03Xi

Slope interpretation: The estimated average amount spent on entertainment increases 1.03 every time the daily hotel room rate increases one unit.

If the room rate for Chicago is $128 (X), to predict the mount spent in entertainment (Y) you have replace it in the estimated regression line:

^Y= 17.49 + 1.03Xi= 17.49 + 1.03*128= 149.33

The expected amount spent on entertainment for Chicago is $149.33

I hope this helps!