A Least Squares Line of Regression Has Been Fitted to a Scatterplot;

question 112

Multiple Choice

A least squares line of regression has been fitted to a scatterplot; the model's residuals plot is shown. Which is true?

• A) The linear model is poor because the correlation is near 0.
• B) None of these.
• C) The linear model is appropriate.
• D) The linear model is poor because some residuals are large.
• E) A curved model would be better.

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Definitions:

Private Good

A product or service that is excludable and rival in consumption, meaning only those who pay for it can consume it, and one person’s consumption prevents another's.

Common Resource

A type of good that is non-excludable but rivalrous, meaning it's available to everyone but its consumption by one individual diminishes its availability for others.

Tragedy of the Commons

A situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, even though it is not in anyone's long-term interest.

Social Incentives

Motivations that influence an individual's behavior based on social factors, including approval, respect, or the desire to be part of a community.