Decision Science Associates was asked to do a feasibility study for a proposed destination resort to be located within half a mile of the Grand Coulee Dam. Mark Craze was not happy with the regression model that used the price of a regular gallon of gasoline to predict the number of visitors to the Grand Coulee Dam Visitors Center. After plotting the data on a scatter diagram, Mark decided to use a dummy variable to represent significant celebrations in the general area. Mark used a 1 to represent a celebration and a 0 to represent no celebration. The 1 in 1974 represents the Expo 74 World's Fair celebrated in Spokane, Washington, the 1 in 1983 represents the celebration of the 50th anniversary of the construction of Grand Coulee Dam, and the 1 in 1986 represents the World's Fair held in Vancouver, Canada. Mark also decided to use time as a predictor variable. The data are shown in Table P-10. Suppose you were asked to write a report for Mark to present to his boss. Indicate whether serial correlation is a problem. Also indicate what additional information would be important in deciding whether to recommend that the destination resort be built.

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TABLE P-10 Number of Price of VisitorsTime Gasoline (S/gallon) Celebration Year 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 268.528 468,136 390,129 300,140 271,140 282.752 244,006 161,524 277,134 382.343 617.737 453,881 471 417 654,147 39 53 57 .59 62 2 1.19 1.31 1,22 1.16 1.13 .86 9 14