A) Dummy (Binary) Variables & Interactions

1) What is the difference between a regression of lwage on educ, versus a regression of lwage on i.educ, where i.educ is Stata's notation for a set of dummy values for each possible value of educ?

2) Explain how you would interpret an interaction between a dummy variable and a continuous variable. Give an example.

3) Explain why the coefficient on the dummy variable sometimes behaves very strangely when you add an interaction term between that dummy variable and a continuous variable, and what you can do to solve this problem.

4) Explain how you would implement and interpret an interaction between two continuous variables, and give an example.

5) Explain how you would interpret the interaction between two dummy variables. Give an example, and show how to calculate the various different marginal effects.