(Round intermediate calculations to at least 4 decimal places.) House price y is

Question

(Round intermediate calculations to at least 4 decimal places.)

House price y is estimated as a function of the square footage of a house x and a dummy variable d that equals 1 if the house has ocean views. The estimated house price, measured in $1,000s, is given by.

Compute the predicted price (in $1,000s) of a house with ocean views and square footage of 2,200. (Round your answer to 2 decimal places.)

Compute the predicted price (in $1,000s) of a house with ocean views and square footage of 3,200. (Round your answer to 2 decimal places.)

Compute the predicted price (in $1,000s) of a house without ocean views and square footage of 2,200. (Round your answer to 2 decimal places.)

Compute the predicted price (in $1,000s) of a house without ocean views and square footage of 3,200. (Round your answer to 2 decimal places.)

(Round intermediate calculations to at least 4 decimal places.)

House price y is estimated as a function of the square footage of a house x and a dummy variable d that equals 1 if the house has ocean views. The estimated house price, measured in $1,000s, is given by.

Explanation / Answer

y = 120.38 + 0.1 x + 50.91 d

A1) X = 2200

d= 1

Predicted price = 120.38 + 0.1 * 2200 + 50.91 = 391.29

A2) x = 3200

d = 1

Predicted price = 120.38 + 0.1 * 3200 + 50.91 = 491.29

B1) x = 2200

d = 0

Predicted price = 120.38 + 0.1 * 2200 + 50.91 * 0 = 340.38

B2) X = 3200, d = 0

Predicted price = 120.38 + 0.1 * 3200 = 50.91 * 0 = 440.38

C) Option-A) an ocean view increases the value of house price at given level by 50.91 thousand dollars

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