Consider the following to answer the question(s) below:
A regression equation that predicts the price of homes in thousands of dollars is = 24.6 + 0.055x1, where x1 is a variable that represents the assessed value of the house and x2 is an indicator variable that represents whether the house is on a busy street (1 = yes, 0 = no).
-Based on this information, which of the following statements is true?
A) On average, homes with the same assessed value that are on busy streets are worth $3600 less than homes that are not on busy streets.
B) For a given assessed value, on average, homes that are on busy streets are worth $360 less than homes that are not on busy streets.
C) For a given assessed value, on average, homes that are on busy streets are worth $3600 more than homes that are not on busy streets.
D) On average, homes with the same assessed value that are on busy streets are worth $360 more than homes that are not on busy streets.
E) For a given assessed value, on average, homes that are on busy streets are worth 24.6 - 3.6 = $19000 less than homes that are not on busy streets.

Question

Consider the following to answer the question(s) below:
A regression equation that predicts the price of homes in thousands of dollars is  = 24.6 + 0.055x1, where x1 is a variable that represents the assessed value of the house and x2 is an indicator variable that represents whether the house is on a busy street (1 = yes, 0 = no).
-Based on this information, which of the following statements is true?
A) On average, homes with the same assessed value that are on busy streets are worth $3600 less than homes that are not on busy streets. 
B) For a given assessed value, on average, homes that are on busy streets are worth $360 less than homes that are not on busy streets. 
C) For a given assessed value, on average, homes that are on busy streets are worth $3600 more than homes that are not on busy streets. 
D) On average, homes with the same assessed value that are on busy streets are worth $360 more than homes that are not on busy streets. 
E) For a given assessed value, on average, homes that are on busy streets are worth 24.6 - 3.6 = $19000 less than homes that are not on busy streets.

Quizplus · Accepted Answer

The correct answer is A because it accurately states that homes on busy streets, with the same assessed value as those not on busy streets, are on average worth $3600 less, indicating a negative impact on value due to the busy street location.

Consider the Following to Answer the Question(s) Below