Week5HW

# Week5HW - EC315 Homework Week 5 Chapter 13 Question 40 A...

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EC315 Homework Week 5 Chapter 13, Question 40 A suburban hotel derives its gross income from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied. Day Income \$ Occupied 1 1,452 23 2 1,361 47 3 1,426 21 4 1,470 39 5 1,456 37 6 1,430 29 7 1,354 23 8 1,442 44 9 1,394 45 10 1,459 16 11 1,399 30 12 1,458 42 13 1,537 54 14 1,425 27 15 1,445 34 16 1,439 15 17 1,348 19 18 1,450 38 19 1,431 44 20 1,446 47 21 1,485 43 22 1,405 38 23 1,461 51 24 1,490 61 25 1,426 39 Use a statistical software package to answer the following questions: (A) Does the breakfast revenue seem to increase as the number of occupied rooms increases? Draw a scatter diagram to support your conclusion. Breakfast revenue does seem to increase as the number of occupied rooms increases, seen from the positive slope (1.478) of the regression line in the scatterplot.

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(B) Determine the coefficient of correlation between the two variables. Interpret the value. Coefficient of Correlation r = [n∑(xy) - (∑x)(∑y)] / √ [ [n(∑x²)-(∑x)²] [n(∑y²) - (∑y)²] ] r = 0.4230 Since r is positive but sufficiently far away from 1, then it would indicate that the correlation between breakfast revenue and number of rooms occupied is weak. (C) Is it reasonable to conclude that there is a positive relationship between revenue and occupied rooms? Use the .10 significance level. H
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Week5HW - EC315 Homework Week 5 Chapter 13 Question 40 A...

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