1. You want to estimate the elasticity of demand for bananas with respect to price. Which of the following transformations do you want to use?~ (A) Log the RHS variable, but not the LHS variable.~ (B) Log the LHS variable, but not the RHS variable.~ (C) Log both the LHS and RHS variables.~ (D) Introduce a quadratic term on the RHS.~ (E) Introduce an interaction term on the RHS.~ 2. Suppose that you are regressing the amount of revenue a Rambo movie makes on the amount of shirtless scenes Sylvester Stallone has in the movie, and you think the relationship is a quadratic one, i.e.~ Revenue, = a + m,Scenes; + m2Scenes; + uit a) What is the predicted effect of filming one more shirtless scene?~ b) Now you wonder whether the effect of shirtless scenes on revenue depends on the number of people Rambo kills in the movie. You introduce an interaction term, Scenes, x Kills. Write a regression containing this term.~ c) Now what is the predicted effect of filming one more shirtless scene?~