Question: An insurance company suspects that there is a linear relationship between the dollar amount of fire damage in residential fires, and the distance between the residence and the nearest fire station. Data were collected on a random sample of 17 residential fires and the results are given below. The amount of fire damage (in thousands of dollars) is denoted as cost, and the distance between the residence and the nearest fire station (in miles) is denoted as distance .

1. Test the appropriate hypothesis at the 10% level of significance. Make sure that ALL the steps of the hypothesis testing process are clearly identified in the appropriate order. Note that the value of the test statistic has to be obtained from the MINITAB output, NOT calculated by hand.
2. Using MINITAB, generate a 95% interval for the average dollar amount of fire damage for residences that are 4.8 miles from the nearest fire station. (You have to decide if the interval is a confidence interval or a prediction interval)
3. Using MINITAB, generate a 99% interval for the dollar amount of fire damage for a residence that is 6.1 miles from the nearest fire station. (You have to decide if the interval is a confidence interval or a prediction interval)

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