Question: THE REAL ESTATE SALES PRICE CASE

A real estate agency collects data concerning y = the sales price of a house (in thousands of dollars), and x = the home size (in hundreds of square feet). The data are given in the table below. The MINITAB output from fitting a least squares regression line to the data is on the next page.

 a By using the formulas illustrated in Example 13.2 (above formulas) (see page 497 ) and the data provided, verify that (within rounding) b ₀ = 48.02 and b ₁ = 5.700, as shown on the MINITAB output.

 b Interpret the meanings of b ₀ and b ₁ . Does the interpretation of b ₀ make practical sense?

 c Write the least squares prediction equation.

 d Use the least squares line to obtain a point estimate of the mean sales price of all houses having 2,000 square feet and a point prediction of the sales price of an individual house having 2,000 square feet.

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document