An agent for a residential real estate company in a suburb located outside a major city has the business objective of developing more accurate estimates of the monthly rental cost for apartments. Toward the goal, the agent would like to use the size of an apartment, as defined by square footage to predict the monthly rental cost. The agent selects a sample of 8 one-bedroom apartments and the data are shown. Complete parts (a) through (f).

Monthly Rent ($) Size (Square Feet) 875 850 1,450 1,200 850 950 1,500 1,200 1,950 2,000 950 750 1,700 1,350 1,400 1,100

. Construct a scatter plot. Choose the correct graph below.

A.

02,00002,000Size(sqft)Rent($)

A scatter plot has a horizontal axis labeled Size (in square feet) from 0 to 2000 in increments of 400 and a vertical axis labeled Rent ($) from 0 to 2000 in increments of 400. A series of plotted points are clustered around a line that falls from left to right passing through the points (800,1300) and (1200,1000). All coordinates are approximate.

B.

02,00002,000Size(Sqft)Rent($)

A scatter plot has a horizontal axis labeled Size (in square feet) from 0 to 2000 in increments of 400 and a vertical axis labeled Rent ($) from 0 to 2000 in increments of 400. A series of plotted points fall exactly on a line that rises from left to right, where the points range from (750,750) to (2,000,2000). All coordinates are approximate.

C.

02,00002,000Size(Sqft)Rent($)

A scatter plot has a horizontal axis labeled Size (in square feet) from 0 to 2000 in increments of 400 and a vertical axis labeled Rent ($) from 0 to 2000 in increments of 400. A series of plotted points fall exactly on a line that falls from left to right, where the points range from (750,1450) to (2,000,500). All coordinates are approximate.

D.

02,00002,000Size(Sqft)Rent($)

A scatter plot has a horizontal axis labeled Size (in square feet) from 0 to 2000 in increments of 400 and a vertical axis labeled Rent ($) from 0 to 2000 in increments of 400. A series of plotted points are clustered around a line that rises from left to right passing through the points (1200,1400) and (1600,1700). All coordinates are approximate.

Part 2b. Use the least-squares method to determine the regression coefficients

b0

and

b1.

b0

=

enter your response here (Round to one decimal place as needed.)

Part 3

b1

=

enter your response here (Round to one decimal place as needed.)

Part 4c. Interpret the meaning of

b0

and

b1

in this problem. Choose the correct answer below.

A.

For each increase of 1 square foot in space, the monthly rent is expected to increase by

b1dollars.

Since X cannot be zero,

b0

has no practical interpretation.

B.

For each increase of 1 square foot in space, the monthly rent is expected to increase by

b1dollars.

Apartments in this neighborhood cost at least b0dollars.

C.

For each increase of 1 square foot in space, the monthly rent is expected to increase by

b0dollars.

Since X cannot be zero,

b1

has no practical interpretation.

D.

For each increase of 1 square foot in space, the monthly rent is expected to increase by

b0dollars.

Apartments in this neighborhood cost at least b1dollars.

Part 5d. Predict the mean monthly rent for an apartment that has 1,000 square feet.The predicted mean monthly rent for such an apartment is

$enter your response here.

(Round to the nearest cent as needed.)Part 6e. Why would it not be appropriate to use the model to predict the monthly rent for apartments that have 500 square feet?

A.

An apartment with 500 square feet is outside the relevant range for the independent variable.

B.

The correlation between an apartment's size and its monthly rent is too weak to use this model for such a prediction.

C.

The model predicts that the monthly rent for an apartment that has 500 square feet would be unrealistically low.

D.

The size of an apartment has no effect on the monthly rent, according to this model. There must be another factor that contributes to the rent price.

Part 7f. Two people are considering signing a lease for an apartment in this neighborhood. They are trying to decide between two apartments, one with 1,000 square feet for a monthly rent of $1,275 and the other with 1,200 square feet for a monthly rent of $1,425. Based on (a) through (d), which apartment is a better deal?Based on (a) through (d), the apartment with

1,200

1,000

square feet is the better deal.