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

question 82

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) $=0.98946627$
$R-s q=0.97904349$
s: 0.2141

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



-Do you think this transformation for linearity was successful? Why?

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Definitions:

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction.

Income Tax

Income tax is a tax levied by governments on individuals or entities based on their income or profits, with rates varying according to income levels.

Consumption

Households utilizing products and services for their needs.

Horizontal Equity

The principle that individuals with similar income and ability should be treated equally by the taxation system, ensuring fairness.