Exercise 1. A real estate agent wishes to determine the selling price of residences using the size (square feet) and whether the residence is a condominium or a single-family home. A sample of 20 residences was obtained with the following results: Type Square Feet Price (8) Type Square Feet 1,375 1,825 1,650 1,960 1,360 1,200 2,000 1,755 Price (8) 199,700 Family 1,500 2,085 200,600 Condo 211,800 Condo 208,000 210,500 Family 233,300 Condo 197,100 Family 228,400 Family 215,800 Family 1,450 1,836 Family 1,730 1,726 2,300 187,200 Condo 190,900 Condo Condo 284,100 Family 207,200 185,200 312,200 Family 313,600 Condo Family 258,200 Family 203,100 1,650 239,000 Family Condo 1,950 1,850 184,400 1,545 Family 1,630 1. Produce a regression equation to predict the selling price for residences using a model of the following form: Ni = Bo + Birı + Phrı +e where: if a condo = Square footage and r2 = 1o ifa single-family home Interpret the estimated parameters 3, and , in the model give in part 1. Produce an equation that describes the relationship between the selling price and the square 2. 3. footage of (1) condominium and (2) single-family homes. 4. Conduct a test of hypothesis to determine if the difference between the average selling price of

Q: =30 -1 -70 -1 30 -1 -40

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