Answer Happy

1. You are in the market to buy a home. Buying a home can be a difficult and trying experience. How much is the home you want worth? What is a fair selling price for the home? The abundance of data on the Internet can be helpful in determining a fair selling price, a. Decide on a location in which you would like to buy a home. Record your data below: Home # Estimate 430800 389900 Sale Price 430000 1 390000 2 533000 535300 3 390700 390000 4. 740600 740000 5 6 357900 410000 444800 7 480000 762000 8 722200 351900 365000 9 454000 440000 10 11 378700 374600 412500 385000 12 494900 470000 13 404800 420000 14 420000 435300 15 b. Draw a scatter diagram of the data from part (a), treating the Estimate as the explanatory variable. Comment on the association between the Estimate and selling price. Find the least-squares regression line, treating the Estimate as the explanatory variable. d. Interpret the slope of the least-squares regression line in a sentence. Draw a residual plot to verify a linear model is appropriate. Include your plot here and explain e. your answer.

f. Draw a boxplot or histogram of the residuals. Are there any outliers? Include your plot here and explain your answer. 9. Assuming the residuals are normally distributed, test whether a linear relation exists between the Estimate and selling price. Use the a=0.05 level of significance. Use the steps of the hypothesis test as outlined in the book. (You have already checked the conditions.) h. Choose an Estimate price that is not outside the scope of your model. Use the regression model from part (oto predict the mean sale price of all homes with the Estimate price you selected. i. Why did you need to choose an Estimate price that is not outside the scope of your model? j. Construct a 95% confidence interval for the mean sale price of all homes whose Estimate is equal to the value chosen in part (h). k Construct a 95% prediction interval for the sale price of a particular home whose Estimate is equal to the value chosen in part (h). Explain why the predicted sale price found in parts (1) and (k) are the same, yet the intervals are different I.