Q266. What is interpolation and how do heat maps work?
Interpolation means calculating the values between known data points.
Point data > create a grid > estimate (interpolate) values for each grid square assuming a "contribution" from all nearby points.
You should know the difference between interpolation and extrapolation.
From wikipedia: extrapolation is the process of estimating, beyond the original observation interval, the value of a variable on the basis of its relationship with another variable. It is similar to interpolation, which produces estimates between known observations, but extrapolation is subject to greater uncertainty and a higher risk of producing meaningless results
You should be able to say something about a series of images like this:
Esri. Understanding Interpolation Analysis
Penn State Geography 486. Part III. Interpolation, Contouring, and Symbolization