A real estate agent wishes to determine the selling price of residences using the size (square feet) and whether the residence is a condominium or a singlefamily home. A sample of 20 residences was obtained with the following results:

Price ($) Type Square Feet Price ($) Type Square Feet 199,700 Family 1,500 200,600 Condo 1,375 211,800 Condo 2,085 208,000 Condo 1,825 197,100 Family 1,450 210,500 Family 1,650 228,400 Family 1,836 233,300 Family 1,960 215,800 Family 1,730 187,200 Condo 1,360 190,900 Condo 1,726 185,200 Condo 1,200 312,200 Family 2,300 284,100 Family 2,000 313,600 Condo 1,650 207,200 Family 1,755 239,000 Family 1,950 258,200 Family 1,850 184,400 Condo 1,545 203,100 Family 1,630

a. Produce a regression equation to predict the selling price for residences using a model of the following form:
yi = b0 + b1x1 + b2x2 + e where:
x1 = Square footage and x2 = e 1 if a condo 0 if a single@family home

b. Interpret the parameters b1 and b2 in the model given in part a.

c. Produce an equation that describes the relationship between the selling price and the square footage of (1) condominiums and (2) single-family homes.

d. Conduct a test of hypothesis to determine if the relationship between the selling price and the square footage is different between condominiums and single-family homes.
Computer Software Exercises