The Bigger the Stop Sign, the More Expensive It Is $\mathrm{R}$

question 78

Essay

The bigger the stop sign, the more expensive it is. Here is a graph of the height of a sign in inches versus its cost in dollars.
To achieve linearity, the data was transformed using a square root function of cost. Here are the results and a residual plot.Dependent Variable: sqrt(cost)
$\mathrm{R}$ (correlation coefficient) $=0.98946627$
$\mathrm{R}-\mathrm{sq}=0.97904349$
s: 0.2141

$\begin{array}{lrr}\text { Parameter } & \text { coeff } & \text { se } \\\text { Intercept } & 1.1857 & 0.4346 \\\text { height } & 0.1792 & 0.0151\end{array}$

-Use your equation to predict the cost of a 48" stop sign.

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Definitions:

Marginal Social Benefit

The additional benefit received by society as a whole from the production or consumption of one more unit of a good.

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service, considering both private benefits and externalities.

Marginal Benefit Curve

The Marginal Benefit Curve is a graphical representation showing how the benefit or utility from consuming each additional unit of a good decreases as more units are consumed.

Government Intervention

Regulatory actions taken by a government in order to affect or interfere with decisions made by individuals, groups, or organizations regarding economic and social matters.