Assignment:
Home Selling Prices: Finding the Best Multiple Regression Equation. In Exercises, refer to the accompanying table, which was obtained using data from homes sold ( from Data Set in Appendix). The response ( y) variable is selling price (in dollars). The predictor (x) variables are LP (list price in dollars), LA (living area of the home in square feet), and LOT (lot size in acres).
1. If only one predictor (x) variable is used to predict the selling price of a home, which single variable is best? Why?
2. If exactly two predictor (x) variables are to be used to predict the selling price of a home, which two variables should be chosen? Why?
3. Which regression equation is best for predicting the selling price? Why?
4. A home is for sale with a list price of $400,000, it has a living area of 3000 square feet, and it is on a 2 acre lot. What is the best predicted value of the selling price? Is that predicted selling price likely to be a good estimate? Is that predicted value likely to be very accurate?