Refer to Exercise 13 41, with y predicted selling price of used car and x 1 age of car When equations are fitted separately for U S and foreign cars, we get y 23,417 1,715x 1 for U S cars and y 15,536 557x 1 for foreign cars a In allowing the lines to have different slopes, we allow for an between ...

a Interaction b The prediction equations do not have the same slope For a oneyear increase ...

Refer to Exercise 13.41, with y = predicted selling price of used car and x 1 =

Question:

Refer to Exercise 13.41, with ŷ = predicted selling price of used car and x₁ = age of car. When equations are fitted separately for U.S. and foreign cars, we get ŷ = 23,417 - 1,715x₁ for U.S. cars and ŷ = 15,536 - 557x₁ for foreign cars.
a. In allowing the lines to have different slopes, we allow for an ____________ between age and type of car in their effects on the price. (Fill in the correct word.)
b. Predict by how much the price changes for a one-year increase in the age of the car. Do you need to do this separately for each type of car? Explain.
c. Based on the separate prediction equations, find the predicted price of a (i) U.S. and (ii) foreign car that is eight years old.