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Your friend is trying to buy a house in Vancouver. He searched online and found the selling price for four houses. Assume that the lot
Your friend is trying to buy a house in Vancouver. He searched online and found the selling price for four houses. Assume that the lot size is same for these four houses (i.e., for each house, the land size is the same). House sq. ft. #1 2,300 Price 1,150,000 Has a pool? No #2 2,500 1,200,000 No #3 2,000 1,000,000 No #4 2,000 1,060,000 Yes Required: a. Your friend wants to find a price function and knows the High-Low method. But he is not sure about which two houses he should choose to apply the method. Please help him by choosing two houses to apply the High-Low method. And briefly explain why you choose these two houses. (3 marks) b. With your choice of two houses, use the High-Low method to prepare a price function (Ya+bX) for the housing price based on these observations. (5 marks) c. With your price function (Y = a + bX), can you find the price of the land only? (3 marks) d. What is the price of the pool in the house #4? (2 marks) e. Your friend's budget is $900,000. What is the biggest house he can buy in Vancouver? (That is to find the maximum sq. ft. with this price) (Assume your friend does not want a pool) (4 marks) f. Alternatively, if he wants a pool, with $900,000, what is the size of the house he can get
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