A quantitatively savvy, young couple is interested in purchasing a home in southern Sydney. They collected data on 48 houses that had recently sold in the area. They want to predict the selling price of homes (in thousands of dollars) based on the size of the home (in square feet).

The regression equation is House Price (in thousands) = 17.1 + 0.0643 Size (sq. ft.)

Predictor	Coef	SE Coef	T	P
Constant	17.06	24.59	0.69	0.491
Size (sq. ft.)	0.06427	0.01224	5.25	0.000

S = 48.5733 R-Sq = 37.5% R-Sq(adj) = 36.1%

Use the computer output to test the slope, at the 5% level, to determine whether size (in square feet) is an effective predictor of the selling price of recently sold homes. Include all details of the test.

1.What are the null ( H_O ) and alternative hypotheses ( H_A )?

Choose...

a. Ho : =0 vs Ha:0

b. Since the p-value is close 1, there is not very strong evidence that size (in square feet) is an effective predictor of the selling price of homes.

c. 46

d. Since the p-value is close 0, there is very strong evidence that size (in square feet) is an effective predictor of the selling -price of homes.

e. 48

f. 5.25

g. Ho : 1=0 (or Size is not an effective predictor of selling price) vs Ha:0 (or Size is an effective predictor of selling price)

h. 0.69

2. What is the t-test statistics?

a. Ho : =0 vs Ha:0

b. Since the p-value is close 1, there is not very strong evidence that size (in square feet) is an effective predictor of the selling price of homes.

c. 46

d. Since the p-value is close 0, there is very strong evidence that size (in square feet) is an effective predictor of the selling -price of homes.

e. 48

f. 5.25

g. Ho : 1=0 (or Size is not an effective predictor of selling price) vs Ha:0 (or Size is an effective predictor of selling price)

h. 0.69

3. Degree of freedom for this t-test is

a. Ho : =0 vs Ha:0

b. Since the p-value is close 1, there is not very strong evidence that size (in square feet) is an effective predictor of the selling price of homes.

c. 46

d. Since the p-value is close 0, there is very strong evidence that size (in square feet) is an effective predictor of the selling -price of homes.

e. 48

f. 5.25

g. Ho : 1=0 (or Size is not an effective predictor of selling price) vs Ha:0 (or Size is an effective predictor of selling price)

h. 0.69

4. Final conclusion of this test is

a. Ho : =0 vs Ha:0

b. Since the p-value is close 1, there is not very strong evidence that size (in square feet) is an effective predictor of the selling price of homes.

c. 46

d. Since the p-value is close 0, there is very strong evidence that size (in square feet) is an effective predictor of the selling -price of homes.

e. 48

f. 5.25

g. Ho : 1=0 (or Size is not an effective predictor of selling price) vs Ha:0 (or Size is an effective predictor of selling price)

h. 0.69