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The summary statistics for sale price and living area are listed below. The correlation between sale price and living areas is 0.7855. Living area: mean=1316.3, standard deviation = 405.05 Sale price: mean=177496.4, standard deviation = 83018.28
a. Write the equation of the regression line for predicting sale price from living area.
b. Interpret the slope and the intercept in this context.
c. The recorded living area for one home in the data set was 990. Use the model to estimate the sale price for this home.
d. The recorded sale price for the home in part c was $145,000. Calculate the residual and explain the meaning of this residual value.
e. Another single story home in Ames has a living area of 5095 square feet and was not included in creating this linear model. Would it be appropriate to use this linear model to predict the sale price for this home?
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