Super Markets, Incorporated is considering expanding into the Scottsdale, Arizona area. You, as Director of Planning, must present an analysis of the proposed expansion to the operating committee of the board of directors. As part of your proposal, you need to include information on the amount the people in the region spend per month for grocery items. You would also like to include information on the relationship between the amount spent for grocery items and income. Your assistant gathered the following sample information Household Amt Income Household Amt Income
1 555 4388 21 913 6688
2 489 4558 22 918 6752
3 458 4793 23 710 6837
4 613 4856 24 1083 7242
5 647 4856 25 937 7263
6 661 4899 26 839 7540
7 662 4899 27 1030 8009
8 675 5091 28 1065 8094
9 549 5133 29 1069 8264
10 606 5304 30 1064 8392
11 668 5304 31 1015 8414
12 740 5304 32 1148 8882
13 592 5346 33 1125 8925
14 720 5495 34 1090 8989
15 680 5581 35 1208 9053
16 540 5730 36 1217 9138
17 693 5943 37 1140 9329
18 541 5943 38 1265 9649
19 673 6156 39 1206 9862
20 676 6603 40 1145 9883
a. Let the amount spent be the dependent variable and monthly income the independent variable. Create a scatter diagram, using a software package.
b. Determine the regression equation. Interpret the slope value.
c. Determine the coefficient of correlation. Can you conclude that it is greater than 0?