1. A national homebuilder builds single-family homes and condominium-style townhouses. The data Question 3 Data(in the Excel file Assignment 2 Data.xlsx) provides information on the selling price, lot cost, type of home, and region of the country (Midwest, and South) for closings for one month. Develop a multiple regression model for sales price as a function of lot cost and type of home without any interaction term.

a) Determine if an interaction exists between lot cost and type of home and find the best model. What is the predicted price for either a single-family home or a townhouse with a lot cost of $45,000? (Hint: remember to convert home type to numeric, setting Townhouse to 1 and Single Family to 0 before creating the interaction)

b) Determine if an interaction exists between lot cost and region and find the best model. (Hint: convert the region variable to numeric, setting Midwest to 1 and South to 0. The model in c should also include the independent variables in b)

c) What is the strongest predictor of selling price?