House pricey is estim ated as a function of th e square footage of a house x ; a dum m y variable d th a t equals 1 if th e house has ocean views and 0 otherw ise; and a product of this dum m y and th e square footage xd. The estim ated house price, m easured in $ 1,000s, is given by ŷ = 80 + 0.12x +

40d + 0.01x d .

a. C om pute th e predicted price of a house w ith ocean views and square footage of 2,000 and 3,000, respectively.

b. C om pute th e predicted price of a house w ithout ocean views and square footage of 2,000 and 3,000, respectively.

c. Discuss th e im pact of ocean views on th e house price.