Intro Stats, Books a la Carte Edition (5th Edition)
Intro Stats, Books a la Carte Edition (5th Edition)
5th Edition
ISBN: 9780134210285
Author: Richard D. De Veaux, Paul Velleman, David E. Bock
Publisher: PEARSON
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Chapter 9, Problem 11E

Interpretations A regression performed to predict the selling price of houses found the equation

P r i c e ^ = 169 , 328 + 35.3 A r e a + 0.718 L o t s i z e 6543 A g e

where Price is in dollars, Area is in square feet, Lotsize is in square feet, and Age is in years. The R2 is 92%. One of the interpretations below is correct. Which is it? Explain what’s wrong with the others.

  1. a) Each year a house Ages it is worth $6543 less.
  2. b) Every extra square foot of Area is associated with an additional $35.30 in average price, for houses with a given Lotsize and Age.
  3. c) Every dollar in price means Lotsize increases 0.718 square feet.
  4. d) This model fits 92% of the data points exactly.
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