Chapter 8

Indicator Variables

8.1 β0, β2, β3, and β4 determine the intercept while the other parameters determine the slope.
8.2 a.
b.
8.3 a. Let

equation

Then = .42 + 1.77x1 + .011x2 + 2.29x3 + 3.74.x4 − .45x5.
b. No, which is not significant.
c. There is a problem with normality and a pattern to the residuals.
8.4 a. = 33.6 − .0457x1 − .5x11. No, the t = −.22 with p = 0.824 which is not significant.
b. = 42.92 − .117x1 − 13.46x11 + .082x1x11. There is a significant interaction between engine displacement and the type of transmission. When the transmission is automatic, = (42.92 − 13.46) ...

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