Do movies of different types have different rates of return on their budgets? Here’s a scatterplot of USGross ($M)

vs. Budget ($M) for Comedies (red) and Action pictures

(blue):

a) What attributes of this plot suggest that it would be appropriate to use an indicator variable in a regression of USGross on Budget?

b) What would the data values in such an indicator variable be?

Transcribed Image Text:

US Gross ($M) 200 150 100 50 30 60 90 120 Budget ($M)