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Regression analysis for selling price

A sample of 7 homes sold last week in Tampa, FL is selected. Can we conclude that as the size of the homes (reported below in thousands of square feet) increased, the selling price (reported in $ thousands) also increases?

Home Size (thousands of square feet) Selling Price ($ thousands)

Thousand Selling price (in thousands)
SQ Ft'
1.4 100
1.3 110
1.2 105
1.1 120
1.4 80
1.0 105
1.3 110

a) Compute the coefficient of correlation.
b) Determine the coefficient of determination.
c) Can we conclude that there is a positive association between the size of the home and the selling price? Use the .05 significance level.

Solution Summary

Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.