Do movies of different types have different rates of return on their budgets? He

Question

Do movies of different types have different rates of return on their budgets? Here's a regression of USGross ($M) with an indicator variable Comedy that is 1 for comedies and 0 for adventure films. Complete parts (a) through (d). Dependent variable is: USGross ($M) a) Write out the regression model USGross = _____ + (_____) Budget + (_____) Comedy USGross = + (_____) Budgt*Cmdy b) In this regression, the variable Budgt*Cmdy is an interaction term. How would you interpret the coefficient of Budgt*Cmdy? A. Comedies earn less than adventure films for a given budget. B. Comedies earn more than adventure films for a given budget. C. The slope of the relationship between USGross and Budget is less steep for comedies than for adventure movies. D. The slope of the relationship between USGross and Budget is more steep for comedies than for adventure movies. c) What null hypothesis can we test with the t-ratio for Budgt*Cmdy? A. Comedies earn the same amount as adventure films for a given budget. B. The slope of USGross with Budget is different for comedies and adventure films. C. Comedies do not earn the same amount as adventure films for a given budget. D. The slope of USGross with Budget is the same for comedies and adventure films d) Would you reject that hypothesis at alpha = 0.05? A. Yes, because the P-value is less than the level of significance. B. No, because the P-value is less than the level of significance. C. No, because the P-value is not less than the level of significance. D. Yes, because the P-value is not less than the level of significance.

Explanation / Answer

10)

a. USGross^ = -13.0405 + 1.44152Budget + 35.6993Comedy - 0.651982Budget*Cmdy

b. For 1 unit rise in this interaction term, USGross decreases by $.65 million. C is the right option, as slope of Budget*Comedy in less in magnitude than Comedy

c. D option is the right interpretation, D is right

d. Yes, because .1480>.05

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.