SCENARIO 13-5
a Microeconomist Wants to Determine How Corporate Sales

question 50

Multiple Choice

SCENARIO 13-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies.She proceeds to randomly select 26 large corporations and record information in millions of dollars.The Microsoft Excel output below shows results of this multiple regression. SUMMARY OUTPUT
Regression Statistics
$\begin{array} { l l } \text { Multiple R } & 0.830 \\ \text { R Square } & 0.689 \\ \text { Adjusted R Square } & 0.662 \\ \text { Standard Error } & 17501.643 \\ \text { Observations } & 26 \end{array}$
ANOVA
$\begin{array} { l r c c c c } & d f & \text { SS } & \text { MS } & F & \text { Signif } F \\ \text { Regression } & 2 & 15579777040 & 7789888520 & 25.432 & 0.0001 \\ \text { Residual } & 23 & 7045072780 & 306307512 & & \\ \text { Total } & 25 & 22624849820 & & & \end{array}$


$\begin{array}{lrrrr} & \text { Coeff } & \text { StdError } & t \text { Stat } & \text { P-value } \\\text { Intercept } & 15800.0000 & 6038.2999 & 2.617 & 0.0154 \\\text { Capital } & 0.1245 & 0.2045 & 0.609 & 0.5485 \\\text { Wages } & 7.0762 & 1.4729 & 4.804 & 0.0001\end{array}$

-Referring to SCENARIO 13-5, one company in the sample had sales of $20 billion (Sales =20,000) .This company spent $300 million on capital and $700 million on wages.What is the residual (in millions of dollars) for this data point?

• A)874.55
• B)622.87
• C)-790.69
• D)-983.56

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Definitions:

Equity

Refers to fairness or justice within relationships, organizations, or societies, often focusing on the distribution of resources.

Conflict-Escalation Process

The progression of a dispute or conflict, increasing in intensity and potentially leading to more serious disputes or confrontations.

Social Values Orientation

An individual's preference regarding the allocation of resources between themselves and others, indicating their inclination towards cooperation, altruism, or selfishness.

Values Orientations

Cultural or psychological frameworks that guide individual or group behaviors and perceptions regarding what is important in life.