This dataset contains the listed prices (in thousands of dollars) and the number of square feet for 28 homes in the Seattle area. The data come from the Web site of a Seattle realtor offering homes in the area for sale. For the SRM to work, we need to formulate the model in terms of cost per square foot. Use the selling price per square foot as Y and the reciprocal of the number of square feet as X.
(a) Give a 95% confidence interval for the fixed cost (the portion of the cost that does not change with the size of the home) associated with these home prices, along with a brief interpretation.
(b) Give a 95% confidence interval for the marginal costs (the cost that is related to number of square feet), along with a brief interpretation.
(c) How much might a buyer pay, per square foot, for a specific home with 3,000 square feet in the Seattle area? Give a range, rounded appropriately, to show the buyer.
(d) How much in total might a buyer pay for a 3,000-square-foot home in the Seattle area? Give a range, rounded appropriately, to show the buyer.