Exhibit 17

question 43

Essay

Exhibit 17.8.A realtor wants to predict and compare the prices of homes in three neighboring locations.She considers the following linear models:
Model A: Price = β₀ + β₁Size + β₂Age + ε,
Model B: Price = β₀ + β₁Size + β₂Loc1 + β₃Loc2 + ε,
Model C: Price = β₀ + β₁Size + β₂Age + β₃Loc1 + β₄Loc2 + ε,
where,
Price = the price of a home (in $thousands),
Size = the square footage (in square feet),
Loc1 = a dummy variable taking on 1 for Location 1,and 0 otherwise,
Loc2 = a dummy variable taking on 1 for Location 2,and 0 otherwise.
After collecting data on 52 sales and applying regression,her findings were summarized in the following table.

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Definitions:

Absorption

The process by which substances are taken up and assimilated into the body, such as nutrients from food or drugs into the bloodstream.

Binge-Eating Disorder

A serious eating disorder characterized by recurrent episodes of eating large quantities of food, often quickly and to the point of discomfort.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to severe restrictions on food intake and body weight loss.

Bulimia Nervosa

An eating disorder characterized by binge eating followed by purging, such as vomiting or using laxatives, to prevent weight gain.