What is the response (Y) of interest and how is it measured? Total costs is the response variable found in the problem statement. It is a continuous variable.

Are predictor variables mentioned in the problem statement? If so, how many and what are their measurement levels? The problem statement gives two separate research questions, each specifies one predictor of total costs, length of stay and birthweight, respectively. Both of these predictor variables are continuous.

What are you being asked to deliver? A data description, an interval estimate, an answer to a question, or a predictive model? You are being asked to quantify the relationship between total costs and length of stay and total costs and birthweight. A predictive equation will quantify these relationships. A simple linear regression is a good starting point for developing a predictive equation. Evaluating the linear model may suggest the need for a more complicated model (e.g., non-linear or multivariable).