Answer Happy

A builder is interested in which types of homes earn a higher price. For a given number of square feet, the builder gathered prices of homes that use the space differently. In addition to price, the homes vary in the number of rooms devoted to personal use (such as bathrooms or bedrooms) and rooms devoted to social use (enclosed decks or game rooms). Because the homes are of roughly equal size (equal numbers of square feet), the more space devoted to private use, the less devoted to social use. The variable Private denotes the number of square feet used for private space and Social the number of square feet for social rooms. Complete parts (a) and (b) below. (a) Would you expect to find collinearity in a multiple regression of Price on Private and Social? Explain. since Private and Social likely have similar variances. No, likely have significantly different variances. Yes, are negatively correlated. are positively correlated. are uncorrelated (b) Rather than use both Private and Social as two variables in a multiple regression for Price, suggest an alternative that might in the end be simpler to interpret as well. O A. Use just one of Private and Social as an explanatory variable and use total space (Private + Social) as another explanatory variable. OB. Private Use the percentage of total space devoted to private space Private + Social * 100% as the only explanatory variable. O C. Express Private on a log scale, use that as an explanatory variable, and use Social as another explanatory variable. OD. Express Private on a log scale and use that as the only explanatory variable. 00%