Chapter 13, Problem 9PS

An agent for a residential real estate company in a suburb located outside of Washington, DC, has the business objectives of developing more accurate estimates of the monthly rental cost for apartments. Toward that goal, the agent would like to use the size of an apartment, as defined by square footage to predict the monthly rental cost. The agent selects a sample of 57 one-bedroom apartments and collects and stores the data in RentSilverSpring.

a. Construct a scatter plot.

b. Use the least-squares method to determine the regression coefficients $b_0$ and $b_1.$

c. Interpret the meaning of $b_0$ and $b_1$ in this problem.

d. Predict the mean monthly rent for an apartment that has 800 square feet.

e. why would if not be appropriate to use the model to predict the monthly rent for apartments that have 1,500 square feet?

f. your friends Jim and Jennifer are considering signing a lease for a one-bedroom apartment in this residential neighbourhood. They are trying to decide between two apartments, one with 800 square feet for a monthly rent of $\text{\$1,130}$ and the other with 830 square for a monthly rent of $\text{\$1,410}$ . Based on (a) Through (d), Which apartment do you think is a better deal?