This Question: 5 pts 3 of 15 (1 complete) This Test: 48 pts possibl A regression

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This Question: 5 pts 3 of 15 (1 complete) This Test: 48 pts possibl A regression analysis of 117 homes for sale produced the following model, where price is in thousands of dollars and size is in square feet. Price = 47.84 + 0.066(Size) a) Explain what the slope of the line says about housing prices and house size b) What price would you predict for a 3000-square-foot house in this market? c) A real estate agent shows a potential buyer a 1300-square-foot house, saying that the asking price is $6500 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6500 called? A. For every additional square foot of area of a house, the price is predicted to increase by SO066 O B. For every $1000 increase in price of a house, the size is predicted to increase by 0.066 square feet. ° C. For every $1 increase in price of a house, the size is predicted to increase by 66 square feet. O D. For every additional square foot of area of a house, the price is predicted to increase by $66. b) What price would you predict for a 3000-square-foot house in this market? c) A real estate agent shows a potential buyer a 1300-square-foot house, saying that the asking price is $6500 less than what one would expect to pay for a house of this size. What is the asking price? What is the S6500 called? O A. Slope OB. Predicted value O C. Intercept O D. Residual

Explanation / Answer

a) Option-D) For every additional square foot of area of house, the price is predicted to increase by $66

b) price = (47.48 + 0.066 * 3000) * 1000 = $245480

c) price = (47.48 + 0.066 * 1300) * 1000 = $133280

Asking price = 133280 - 6500 = $126780

Option-D) Residual

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