A researcher has developed the following regression equation to predict the prices of luxurious Oceanside condominium units, = 40 + 0.15Size + 50View, where Price is the price of a unit (in $1,000s), Size is the square footage (in sq. feet), and View is a dummy variable taking on 1 for an ocean view unit and 0 for a bay view unit. Which of the following is the predicted price of a bay view unit measuring 1,500 square feet?
A) $315,000
B) $50,000
C) $265,000
D) $40,000

Question

A researcher has developed the following regression equation to predict the prices of luxurious Oceanside condominium units,  = 40 + 0.15Size + 50View, where Price is the price of a unit (in $1,000s), Size is the square footage (in sq. feet), and View is a dummy variable taking on 1 for an ocean view unit and 0 for a bay view unit. Which of the following is the predicted price of a bay view unit measuring 1,500 square feet?
A) $315,000 
B) $50,000 
C) $265,000 
D) $40,000

Quizplus · Accepted Answer

Plug in the given values into the equation:
Price = 40 + 0.15(1500) + 0 = $265,000
Therefore, the predicted price of a bay view unit measuring 1,500 square feet is $265,000.

A Researcher Has Developed the Following Regression Equation to Predict