Cost of living 2008 The Worldwide Cost of Living Survey City Rankings determine the cost of living in the 25 most expensive cities in the world. (www.finfacts.com/ costofliving.htm) These rankings...

Cost of living 2008 The Worldwide Cost of Living Survey City Rankings determine the cost of living in the 25 most expensive cities in the world. (www.finfacts.com/ costofliving.htm) These rankings scale New York City as 100, and express the cost of living in other cities as a percentage of the New York cost. For example, the table on the following page indicates that in Tokyo the cost of living was 22.1% higher than New York in 2007, and increased to 27.0% higher in 2008.

a) Using the scatterplot on the next page, describe the association between costs of living in 2007 and 2008.

 b) The correlation is 0.938. Find and interpret the value of R2 .

c) The regression equation predicting the 2008 cost of living from the 2007 figure is Cost08 = 21.75 + 0.84 Cost07. Use this equation to find the residual for Oslo.

d) Explain what the residual means.