1 Purchasing a Home in Upstate New Xock A quantitatively savvy, young couple is

Question

1 Purchasing a Home in Upstate New Xock A quantitatively savvy, young couple is interested in purchasing a home in northem New York They collected data on 48 houses that had recently sold in the area They want to predict the selling price of homes (in thousands of dollars) based on the size of the home (in square feet) The regression equation is. Price -17.1 +0.0643 Size Coef 17.06 0.06427 SE Coef 24.59 0.01224 0.69 5.25 0.491 0.000 S-48.5733 RSa-37.5% R-SaladD-36190 350 250 200 8 1s0 100 1000 1500 2000 Size (sq. ft.) 2500 3000 3500 a Use the scatterplot to determine whether the conditions are met for using a linear model with these data Should have any serious concerns? Explain briefy b. Write down the equation of the least squares line. Predict the selling price of a home that is 1.742 square feet in size ?.what is the estimated slope in this regression model? Interpret the slope in context. d. What are the degrees of freedom for constructing a confidence interval for or performing a test about, the population slope?

Explanation / Answer

a) Yes, because the data are scattered all around

b) Price = 17.1+0.0643*Size

For size = 1742

Price = 17.1+0.0643*1742

Price = $129.11

c) Slope is 0.0643, it means for every increase in size, Price increase by $50.0643

d) 48-2 = 46 degree of freedom

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