TABLE 15-3
a Certain Type of Rare Gem Serves as a Status

question 38

Multiple Choice

TABLE 15-3
A certain type of rare gem serves as a status symbol for many of its owners. In theory, for low prices, the demand increases and it decreases as the price of the gem increases. However, experts hypothesize that when the gem is valued at very high prices, the demand increases with price due to the status owners believe they gain in obtaining the gem. Thus, the model proposed to best explain the demand for the gem by its price is the quadratic model:
$Y=\beta_{0}+\beta_{1} X+\beta_{2} X^{2}+\varepsilon$
where Y = demand (in thousands) and X = retail price per carat.
This model was fit to data collected for a sample of 12 rare gems of this type. A portion of the computer analysis obtained from Microsoft Excel is shown below:
SUMMARY OUTPUT
$\begin{array}{lc} \text {Regression Statistics}\\\hline \text { Multiple R } & 0.994 \\\text { R Square } & 0.988 \\\text { Standard Error } & 12.42 \\\text { Observations } & 12 \\\hline\end{array}$


$\begin{array}{l}\text { ANOVA }\\\begin{array}{lrrrrr}\hline & d f & S S & \text { MS } & F & \text { Sgnificance } \\\hline \text { Regression } & 2 & 115145 & 57573 & 373 & 0.0001 \\\text { Residual } & 9 & 1388 & 154 & & \\\text { Total } & 11 & 116533 & & & \\\hline\end{array}\end{array}$


$\begin{array}{lrccc} & \text { Coeff } & \text { Std Error } & t \text { Stad } & p \text {-value } \\\hline \text { Intercept } & 286.42 & 9.66 & 29.64 & 0.0001 \\\text { Price } & -0.31 & 0.06 & -5.14 & 0.0006 \\\text { Price Sq } & 0.000067 & 0.00007 & 0.95 & 0.3647 \\\hline\end{array}$

-Referring to Table 15-3, what is the correct interpretation of the coefficient of multiple determination?

• A) 98.8% of the total variation in demand can be explained by the addition of the square term in price.
• B) 98.8% of the total variation in demand can be explained by just the square term in price.
• C) 98.8% of the total variation in demand can be explained by the quadratic relationship between demand and price.
• D) 98.8% of the total variation in demand can be explained by the linear relationship between demand and price.

Recognize how technology enables creativity and the sharing of information (cognitive surplus).

Identify methods and tools for enhancing reality and human experience through technology (augmented reality, affective computing).

Understand the role of AI and technology in forensic investigations and legal evidence gathering.

Grasp the concept of computer and data literacy, including knowing how to responsibly use and understand technology's capabilities and limitations.

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Definitions:

Successfully Socialized

Refers to individuals who have effectively learned and integrated the norms, values, and behaviors deemed acceptable by their society.

Internalizes

The process of adopting the beliefs, attitudes, or norms of others as one's own, often without external evidence of those beliefs.

Self-Awareness

Being aware of one's own personality, sentiments, intentions, and cravings.

Self-Negativism

A tendency towards self-depreciation or adopting a negative view of oneself, often associated with depressive symptoms.