A Residuals Plot Is Useful Because

question 636

Multiple Choice

A residuals plot is useful because
I. it will help us to see whether our model is appropriate.
II. it might show a pattern in the data that was hard to see in the original scatterplot.
III. it will clearly identify influential points.

• A) I only
• B) I and III only
• C) II only
• D) I, II, and III
• E) I and II only

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Definitions:

Output

The cumulative quantity of products or services generated by a corporation or nation.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output.

Diminishing Returns

A principle in economics where each additional unit of input results in a progressively smaller increase in output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or industry's output expands.