Question: Models with interactions. Suppose that x1 is an indicator variable with the value 0 for Group A and 1 for Group B, and x2 is

Models with interactions. Suppose that x1 is an indicator variable with the value 0 for Group A and 1 for Group B, and x2 is a quantitative variable.

Each of the following models describes a relationship between y and the explanatory variables x1 and x2. For each model, substitute the value 0 for x1, and write the resulting equation for y in terms of x2 for Group A. Then substitute x1 5 1 to obtain the equation for Group B, and sketch the two equations on the same graph. Describe in words the difference in the relationship for the two groups.

(a) y 5 40 1 30x1 1 2x2 1 4x1x2.

(b) y 5 40 1 30x1 1 4x2 1 2x1x2.

(c) y 5 30 1 40x1 2 2x2 1 4x1x2.

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