SCENARIO 13-11 A Computer Software Developer Would Like to Use the Number

question 48

Multiple Choice

SCENARIO 13-11
A computer software developer would like to use the number of downloads (in thousands) for the trial
version of his new shareware to predict the amount of revenue (in thousands of dollars) he can make
on the full version of the new shareware.Following is the output from a simple linear regression
along with the residual plot and normal probability plot obtained from a data set of 30 different
sharewares that he has developed:
Simple Linear Regression 13-43
-Referring to Scenario 13-11, which of the following is the correct interpretation for the
Coefficient of determination?

• A) 74.67% of the variation in revenue can be explained by the variation in the number of downloads.
• B) 75.54% of the variation in revenue can be explained by the variation in the number of downloads.
• C) 74.67% of the variation in the number of downloads can be explained by the variation in revenue.
• D) 75.54% of the variation in the number of downloads can be explained by the variation in revenue.

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Definitions:

Resources Scarcity

The economic problem of having seemingly unlimited human wants in a world of limited resources.

Consumer's Income

The total amount of earnings available to an individual or household to spend or save after taxes.

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased with a given budget at current prices.

Money Income

The total amount of money or monetary earnings received by an individual or household over a certain period of time.