Scenario 3: One of the biggest factors in determining the value of a home is the size of the house. Bigger homes usually have a higher value than smaller homes. Houses are measured in square feet. The following data represent the square footage and selling price for a random sample of homes in Florida in 2015. Note that the prices are in thousands of dollars. So, if a home sold for $257,000 the table will say 257. Assume the square footage is the explanatory variable and the selling price is the response variable. Square Footage Selling Price (in thousands of dollars) 2204 379.9 3183 375 1128 189.9 1975 338 3101 619.9 2769 370 4113 627.7 2198 375 2609 425 1708 298.1 1786 271 3813 690.1

1. Is there a linear relationship between the square footage in a home and the selling price? Explain your decision in a complete sentence. Reference the linear correlation coefficient in your sentence.

2. Predict the selling price of a home with 1465 square feet. Show work.

3. A 1465 home sells for $285,000. Explain who got the better deal in this case, the buyer or the seller? Use the word residual in your explanation. 4. Give at least one reason this home may have sold for $285,000 instead of the predicted price.