A real estate agent has surveyed houses in twenty nearby zip codes in an attempt

Question

A real estate agent has surveyed houses in twenty nearby zip codes in an attempt to put together a comparison for a new property that she would like to put on the market. The 1057 houses she surveyed have a mean price of $157, 300, with a standard deviation of $73, 409. The mean living area is 1932 sq ft, with a standard deviation of 781 sq ft. Which is more unusual, a house in that market that sells for $370,000 or a house that has 3700 sq ft of living area? Explain. The house that sells for $370,000 has a z-score of and the house with 3700 sq ft has a z-score of. Thus, a house in that market that is more unusual than a house that.

Explanation / Answer

as z score=(X-mean )/std deviation

hence z score of house with 370000 sale value=(370000-157300)/73409=2.8975

hence z score of house with 3700sq feet =(3700-1932)/781=2.2638

thus a house in that market that sells 370000 is more unusual then a house that has 3700 sq feet.

because of its high z score.

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