Question

For the response variable y, the selling price in thousands of dollars, and the expanatory variable x, the size of the house in thousands of square feet. ý = 9.5 +77 2x. a. How much do you predict a house would sell for if it has (1) 2000 square feet, () 3000 square feet? b. Using results in part a, explain how to interpret the slope. c. Is the correlation between these variables positive or negative? Why? d. One home that is 3000 square feet sold for $300,000. Find the residual, and interpret. 2. () The predicted selling price of a house that has 2000 square feet is $. (6) The predicted selling price of a house that has 3000 square feet is $ b. Which of the following statements best interprets the slope? O A. For every increase of 1000 square feet to house size, the predicted selling price increases by $77,200. OB. For every increase of 1000 square feet to house size, the predicted selling price decreases by $77,200. OC. For every increase of $1000 in selling price, the predicted size of the house increases by 77,200 square foot. D. For every increase of $1000 in selling price, the predicted size of the house decreases by 77,200 square feet C. The correlation is because the selling price tends to as the house size increases d. The residual is $ Which of the following statements best interprets this residual? A. The residual is the amount the predicted selling price of houses increases for each increase of 1000 square feet B. The selling price of this particular house is greater than the predicted value by the amount of the residual

options C and D for the mutiple choice questions are

C: The selling price of this particular house is less than the predicted value by the amount of the residual.

D: The residual is the predicted selling orice for house with zero square feet.

Answer 1

in of dollars, and the house in thousands (a) of a house X = 2) that has 2000 solution for the response variable g. the selling frice thousands explenatory variable x, the size of the of square feet, 9 = 9.5+ 77.2* ů The predicted selling frice of squares feet (ie. is y, = gos +77.2 x = 9.5 +77.2 X 2 163.9 x $1000 $163900 (ii) The predicted selling price of a house that has x=3) is (ie. 3000 square feet g 2 - 9.5 + 77.2 X 3 241:X $ 1000 = $241100 100 square square feet, the which looo (b) for every increase of change in selling frice frice ie $241100 - $163900 = $77200 positive Hence "(A) for every square house size size, the predicted selling correct choice. price (c) The correlation [Positive increase of feet to incre $ 7.7200 increases by because the selling is

tends to increase) au the house size price increases (a) given the area = 3000 sq feet le. x=3 selling price y - $300000 y = 3.00 Predicted معه ise. ŷ 9.5 + 77.2 X 3 $241.1. Residual y- 300 - 241.1 =58.9 = 58.9X $1000 = $58900 Interpretation of residual is since e=y- y = ý te The selling price of this particular house the predicted value of residual. B) by than greater amount the