Question

Determine if the correlation between the two given variables is likely to be positive or negative, or if they are not likely to display a linear relationship. The size of a piece of land in acres and its selling price.

Answer 1

The variables are likely to present a positive linear relationship

Explanation:

Land is commonly priced as a linear function of area, be it in km², miles² or acres. That is, it is usual to assign a monetary value to a unit of area. Therefore, the price of land (P) as a function of its area (A), in acres, can be given by:

`P(A) = kA`

Where 'k' is a positive constant rate as price increases when area increases. Therefore, the two given variables are likely to present a positive linear relationship.