A real estate agent has surveyed houses in twenty nearby zip codes in an attempt

Question

A real estate agent has surveyed houses in twenty nearby zip codes in an attempt to put together a comparison for a new property that she would like to put on the market. The 1057 houses she surveyed have a mean price of $178, 600, with a standard deviation of $71,490. The mean living area is 2053 sq ft, with a standard deviation of 644 sq ft. Which is more unusual, a house in that market that sells for $320,000 or a house that has 3200 sq ft of living area? Explain.

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Explanation / Answer

as z score =(X-mean)/std deviation

therefore

the house that sells for $320,000 has a z score of 1.98 and the house with 3200 sq ft has a z score of 1.78.

thus the house in that market that sells for $320,000 is more unusual than a house that has 3200 sq ft of living area

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