# PS7 - PS7 Rent Delivery Question 1(5 points An agent for a...

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4/29/11 PS7 Rent.xls Delivery.xls

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4/29/11 Question 1. (5 points) An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost for apartments, based on the size of the apartment, as defined by square footage. A sample of 25 apartments (file ‘Rent.xls’) in a particular residential neighborhood was selected. a) Construct a scatter plot . Highlight last two columns of the data, insert Scatter Plot (with Excel or PHStat) Once you have the scatter plot, place the cursor over one of the data points and right click. Select ‘Add Trendline’ and select ‘Display Equation’.
4/29/11 Problem 12.9, file ‘Rent.xls’ PHStat: ‘Regression’, ‘Simple Linear Regression’, click ‘Regression Statistics Table’, ‘ANOVA and 33 a) Construct a scatter plot . Highlight last two columns of the data, insert Scatter Plot (with Excel or PHStat) Once you have the scatter plot, place the cursor over one of the data points and right click. Select ‘Add Trendline’ and select ‘Display Equation’. b) Assuming a linear relationship, use the least-squares method to find the regression coefficients b0 and b1 The equation you got from a) is the regression equation using least-squares method, so you can find regression coefficients from that equation Or you can get the regression coefficients with Option 2 or Option 3 (see Lecture 20) c) Interpret the meaning of b1 (slope) AND b0 (intercept) in this equation Interpret the practical meaning, based on the problem. Pay attention to the units of X (number of customers) and Y (waiting time). d) Predict the monthly rent for an apartment that has 1,000 square feet . You can plug in ‘1000’ to the regression equation or you can get the prediction with PHStat (see Lecture 20)

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4/29/11 Problem 12.9, file ‘Rent.xls’ 44 a) Construct a scatter plot .
Problem 12.9, file ‘Rent.xls’ 55 b) Assuming a linear relationship, use the least-squares method to find the regression coefficients b0 and b1 c) Interpret the meaning of b1 (slope) AND b0 (intercept) in this equation

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PS7 - PS7 Rent Delivery Question 1(5 points An agent for a...

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