A real estate agent wishes to determine the selling price of
A real estate agent wishes to determine the selling price of residences usingthe size (square feet), and whether the residence is a condominium or asingle-family home. A sample of 20 residences was obtained with thefollowing results:
Price ($) Type Square Feet
199,700 F 1,500
211,800 C 2,085
197,100 F 1,450
228,400 F 1,836
215,800 F 1,730
190,900 C 1,726
312,200 F 2,300
313,600 C 1,650
239,000 F 1,950
184,400 C 1,545
200,600 C 1,375
208,000 C 1,825
210,500 F 1,650
233,300 F 1,960
187,200 C 1,360
185,200 C 1,200
284,100 F 2,000
207,200 F 1,755
258,200 F 1,850
203,100 F 1,630
Where,
F: Single-Family Home
C: Condomnium Residence
a. Produce a regression equation to predict the selling price for residencesusing a model of the following form: (2 marks)
b. Interpret the parameters β1, and β2 in the model given in part a. (2 marks)
c. Produce an equation that describes the relationship between the sellingprice and the square footage of (1) condominiums and (2) single-familyhomes. (3 marks)
d. Conduct a test of hypothesis to determine if the relationship between theselling price and the square footage is different between condominiumsand single-family homes. (3 marks)
