Chapter 27, Problem 4E

a)

To determine

To explain the about the regression.

Explanation of Solution

Given:

  

  

The regression equation is,

  $Price=-3.11686+94.4539(Size)$

The slope says that the price increases by 94.4539 thousand dollars per 1000 square feet.

b)

To determine

To discuss about the intercept by taking a note of p-value.

Explanation of Solution

Given:

  

  

The regression equation is,

  $Price=-3.11686+94.4539(Size)$

Therefore, intercept can be interpreted as the price is -3.11686 thousand dollars if the size of the house is 0 square feet. This does not make sense as the price would be 0 if the 0 square feet of house. As per p-value = 0.5063>0.05, the intercept is not significantly different from 0 which makes practically correct.

c)

To determine

To explain the standard deviation of the residual.

Explanation of Solution

Given:

  

  

s = 53.79 is the standard deviation of the residuals.

Therefore, the actual values vary on average by 53.79 thousand dollars about the predicted values.

d)

To determine

To identify the values of the standard error of the slope of the regression line.

Answer to Problem 4E

SE_b = 94.4539

Explanation of Solution

Given:

  

  

The standard error of the slope of the regression line is,

SE_b = 94.4539 thousand dollars per thousand square feet.

e)

To determine

To explain the value of the standard error of the slope of the regression line.

Explanation of Solution

Given:

  

  

The standard error of the slope of the regression line is,

SE_b = 94.4539 thousand dollars per thousand square feet.

This means that the slope of the regression line of different samples is expected to vary on average by 94.4539 thousand dollars per thousand square feet.