Install and load the dataset named Carseats (in the ISLR package) into R.

Create a new dataframe that is a copy of Carseats. Create two indicator (dummy) variables:

Bad_Shelf = 1 if ShelveLoc = "Bad", 0 otherwise

Good_Shelf = 1 if ShelveLoc = "Good", 0 otherwise

Also, create two interaction variables:

Price_Bad_Shelf = Price* Bad_Shelf

Price_Good_Shelf = Price* Good_Shelf

For Questions 1-2, please estimate a linear regression model (using the lm function) with Sales as the dependent variable and Price, Bad_Shelf, Good_Shelf, Price_Bad_Shelf, and Price_Good_Shelf as independent variables.

Question 1

For the model, does Bad_Shelf have an Intercept significantly (statistically) different from that of the base case?

a) Yes

b) No

c) Maybe

d) Not enough information

Question 2

For the model in Question 2, do the products located on Good_Shelf have a significantly (statistically) different Price coefficient from that of the base case?

a) Yes

b) No

c) Maybe

d) Not enough information