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House pricey is estimated as a function of the square footage of a house x ; a dummy variable d that equals 1 if the house has ocean views and 0 otherwise; and a product of this dummy and the square footage xd. The estimated house price, measured in $ 1,000s, is given by y = 80 + 0.12x + 40d + 0.01x d.

a. Compute the predicted price of a house with ocean views and square footage of 2,000 and 3,000, respectively.

b. Compute the predicted price of a house without ocean views and square footage of 2,000 and 3,000, respectively.

c. Discuss the impact of ocean views on the house price.

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Statistics and Probability, Statistics

Category:- Statistics and Probability
Reference No.:- M92607314

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