Reference no: EM13890490

PRICE($), SQ. FOOTAGE, BEDROOMS, AGE (YEARS)

64,000    1,670        2      30

59,000 1,339   2   25

61,500 1,712   3   30

79,000 1,840   3   40

87,500 2,300    3   18

92,500 2,234   3   30

95,000 2,311   3   19

113,000 2,377   3   7

115,000 2,736   4   10

138,000 2,500   3   1

142,500 2,500   4   3

144,000 2,479   3   3

145,000 2,400   3   1

147,500 3,124   4   0

144,000 2,500   3   2

155,500 4,062   4   10

165,000 2,854   3   3

a) Use the data in Problem 22 and develop a regression model to predict selling price based on the square footage and number of bedrooms. Use this regression line to predict the selling price of a 2000-squre-foot house with 3 bedrooms.

b) Conduct F-test for the above model using F-table (in the lecture note) as well as p-value (in the ANOVA table) and interpret the results (Basically, you are asked to conduct an F test in two different ways).

c) Among the two independent variables, which one has a statistically significant relationship with the dependent variable, selling price?

d) Use the data in Problem 22 again and develop a simple regression model to predict selling price of a house based on just the square footage. Compare this model with the previous multiple regression model. Which one is better? Should the number of bedrooms be included in the model? Why or why not?