An agent for a residential real estate company in a large city would like to be able to predict the…

An agent for a residential real estate company in a large city would like to be able to predict the weekly rental cost for apartments based on the size of the apartment as defined by the number of square metres in area. A sample of 25 apartments was selected from across the city, and the information gathered recorded in the following table:

(a) What are the dependent and independent variables in this problem? Explain.

(b) Use the least-squares method to find the regression coefficients (show workings). State the simple linear regression equation.

(c) Interpret the meaning of both regression coefficients in this problem.
(d) Predict the weekly rental cost for an apartment that has an area of 100 square metres.

(e) Would it be appropriate to use the model to predict the weekly rental for an apartment that has an area of 50 square metres? Explain.

(f) Your friends are considering signing a lease for an apartment in this city. They are trying to decide between two apartments, one with an area of 100 square metres for a weekly rent of $294 and the other with an area of 120 square metres for a weekly rent of $329. What would you recommend to them? Why?