Question

Suppose that 32 residential home sales in a city are used to fit a least-squares regression line relating the sales price, y, to the square feet of living space, x. The sampled homes range from 150 square feet to 400 square feet. The resulting prediction equation is

Y=15,000+300∗SQFT

Predict the price of a house that has 300 square feet.

Answer 1

Suppose that 32 residential home sales in a city are used to fit a least-squares regression line relating the sales price, y, to the square feet of living space, x.

The sampled homes range from 150 square feet to 400 square feet.

The resulting prediction equation is

Y=15,000+300∗SQFT

Predict the price of a house that has 300 square feet.

SQFT = 300

Y=15,000+300∗SQFT

Y=15,000+300∗300

= 15000 + 90000

= 105000

The price of a house that has 300 square feet is 105000.