For the least-squares equation = 3,698 + 2,538X,Y represents house prices and X represents number of rooms.Which of the following statements is true?
A)Only 36.98% of the variation in house prices can be explained by the number of rooms in the house.
B)For every additional room that is added in a house,house prices increase by $2,538.
C)As the number of rooms in the house increase,prices fall by $3,698.
D)25.38% of the house price is attributed to the number of rooms.

Question

For the least-squares equation  = 3,698 + 2,538X,Y represents house prices and X represents number of rooms.Which of the following statements is true?
A)Only 36.98% of the variation in house prices can be explained by the number of rooms in the house. 
B)For every additional room that is added in a house,house prices increase by $2,538. 
C)As the number of rooms in the house increase,prices fall by $3,698. 
D)25.38% of the house price is attributed to the number of rooms.

Quizplus · Accepted Answer

The coefficient of X in the equation is 2,538, which means that for every additional room added in a house, the house prices increase by $2,538. The constant term of 3,698 represents the price of a house with 0 rooms, which is not a realistic scenario. Therefore, option C is incorrect. The coefficient of determination (r-squared value) is not given in the equation, so option A and D cannot be determined.

For the Least-Squares Equation = 3,698 + 2,538X,Y Represents