(solution) A real estate builder wishes to determine how house size (House)

(solution) A real estate builder wishes to determine how house size (House)

A real estate builder wishes to determine how house size (House) is influenced by family income (Income), family size (Size), and education of the head of household (School). House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is in years. The builder randomly selected 50 families and ran the multiple regression. Microsoft Excel output is provided below

Regression Statistics

Multiple R                  0.865

R Square                      0.748

Adjusted R Square      0.726

Standard Error             5.195

Observations               50

ANOVA

                        Df        SS                    MS                  F          Signif F

Regression                   3605.7736       1201.9245                   0.0000

Residual                      1214.2264       26.3962

Total               49        4820.0000

Coeff               StdError          t Stat               p-value

Intercept         -1.6335            5.8078             -0.281              0.7798

Income                        0.4485             0.1137             3.9545             0.0003

Size                 4.2615             0.8062             5.286               0.0001

School             -0.6517            0.4319             -1.509              0.1383

Test Manager

  1. Referring to Table 12-4, which of the following values for the level of significance is the smallest for which the regression model as a whole is significant?
    a. 0.00005 b. 0.001 c. 0.01 d. 0.05
  2. Referring to Table 12-4, one individual in the sample had an annual income of $100,000, a family size of 10, and an education of 16 years. This individual owned a home with an area of 7,000 square feet (House = 70.00). What is the residual (in hundreds of square feet) for this data point? a. 7.40 b. 2.52 c. -2.52 d. -5.40

A real estate builder wishes to determine how house size (House) is influenced by family income
(Income), family size (Size), and education of the head of household (School). House size is
measured…