Question: Data on advertising expenditures and revenues for the Four Seasons Restaurant follow.

a. Let x equal advertising expenditures and y equal revenue. Use the method of least squares to develop a straight line approximation of the relationship between the two variables.

b. Test whether revenue and advertising expenditures are related at .05 level of significance.

c. Prepare a residual plot of y-y^ verus^y. Use the result from part a to obtain the values of ^y.

d. What conclusion can you draw from residual analysis? Should this model be used or should we look for a better one?