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More real estate Consider the Albuquerque home sales from
Chapter 6, Problem 41E(choose chapter or problem)
Problem 41E
More real estate Consider the Albuquerque home sales from Exercise again. The regression analysis gives the model
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 1200-square-foot home, saying that the asking price is $6000 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6000 called?
Exercise
Real estate A random sample of records of sales of homes from February 15 to April 30, 1993, from the files maintained by the Albuquerque Board of Realtors gives the Price and Size (in square feet) of 117 homes. A regression to predict Price (in thousands of dollars) from Size has an R-squared of 71.4%. The residuals plot indicated that a linear model is appropriate.
a) What are the variables and units in this regression?
b) What units does the slope have?
c) Do you think the slope is positive or negative? Explain.
Questions & Answers
QUESTION:
Problem 41E
More real estate Consider the Albuquerque home sales from Exercise again. The regression analysis gives the model
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 1200-square-foot home, saying that the asking price is $6000 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6000 called?
Exercise
Real estate A random sample of records of sales of homes from February 15 to April 30, 1993, from the files maintained by the Albuquerque Board of Realtors gives the Price and Size (in square feet) of 117 homes. A regression to predict Price (in thousands of dollars) from Size has an R-squared of 71.4%. The residuals plot indicated that a linear model is appropriate.
a) What are the variables and units in this regression?
b) What units does the slope have?
c) Do you think the slope is positive or negative? Explain.
ANSWER:
Step 1 of 3
a) The slope is the coefficient in front of "Size" and thus is
This then means that if the size increases by 1 square foot, then you expect the price to increase by 