Chapter PII, Problem 21RE

To determine

To explain which of these is most likely to be the slope of the regression line: $0.008,0.08,0.8,8$ .

Answer to Problem 21RE

  $0.08$ is the slope of the regression line.

Explanation of Solution

It is given in the question that a real estate agent collects data to develop a model that will use the size of a new home in square feet to predict its sale price in thousands of dollars. Thus, $0.08$ is most likely to be the slope of the regression line for this because most houses have areas between 1000 and 5000 square feet. So, increasing 1000 square feet would result in either $1000(0.008)=8$ thousand dollars, $1000(0.08)=80$ thousand dollars, $1000(0.8)=800$ thousand dollars, or $1000(8)=8000$ thousand dollars. Thus, only $\$80,000$ is reasonable, so the slope must be $0.08$ .