The Differences Between the Regression Line and the Observed Values

question 3

Multiple Choice

The differences between the regression line and the observed values are known as ___________________.

• A) residual sum of squares
• B) total sum of squares
• C) line of best fit
• D) residuals

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Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity of that good or service that consumers are willing and able to purchase.

Income Effect

A change in the demand for goods or services attributed to a change in consumers’ income.

Substitution Effect

An economic principle describing how changes in the price of goods lead consumers to replace these goods with cheaper alternatives, affecting the quantity demanded.

Indifference Curve

An illustration representing a consumer's preference equilibrium between two products, indicating no preference difference.