A researcher determines the regression model between price (in thousand of dolla

Question

A researcher determines the regression model between price (in thousand of dollars) of a house for sale in albuquerque and the size in square feet is: Price = 47.82 + 0.062 Size. What price would you predict for a house with 300 square feet? A real estate agent shows the potential buyer a 1200 square foot home, saying the asking prise is 6000 dollars less than what one would expect to pay for a house of this size. What is the expected price, based on the regression model? What is the asking price, knowing that it's dollar 6000 less than the expected price?

Explanation / Answer

price = 47.82 + 0.061 size

A) size = 3000 given

just put this in equation

47.82+0.061*3000 = 230.82

but the price is in thousand therefore 230.82*1000 = 230820

B)expected prize will be when we put 1200 in place of size

47.82+0.061*1200 = 121.02

121.02*1000 = 121020 will be the expected price

c) as 6000 is less from expected price will be the asking price = 121020 - 6000 = 115020

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