A scatterplot of USGross (SM) vs. Budget (SM) for Comedies and Adventure picture

Question

A scatterplot of USGross (SM) vs. Budget (SM) for Comedies and Adventure pictures is shown. Complete parts (a) through (c) below. 300 200 9 100 40 80 120 60 Budget (SM) a) What attributes of this plot suggest that it would be appropriate to use both an indicator variable and an interaction term in a regression of USGross on Budget? Select all that apply. A. Slopes that are not parallel B. Cluster of points near zero C. Difference between outlier in each group D. Intercepts that are different b) Code the indicator variable. (Use Adventure as the base level.) Choose the correct answer below. O A. Comedy = 1 , Adventure-o O B. Comedy-C. Adventure-A ° C. Comedy = 1 , Adventure-2 D. Comedy = 0, Adventure = 1 c) Construct the interaction term variable. Choose the correct answer below A. The interaction term is the sum of the Budget variable and the USGross variable. The interaction term is the sum of the indicator variable and y-intercept. B. ° C. The interaction term is the product of the indicator variable and the USGross variable 0 D. The interaction term is the product of the indicator variable and the Budget variable

Explanation / Answer

Part a)

A.Slopes that are not parallel

b)

B.Comedy = C,Adventure = A

c)

D.The interaction term is the product of the indicator variable and budget variable.

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