Which of the Following Statements Is True

question 39

Multiple Choice

Which of the following statements is true?

• A) The interval estimate for predicting a particular value of y given a specific x will be narrower than the interval estimate for the average value of y given a particular x.
• B) The higher the r-square value, the wider will be the prediction interval based on a simple linear regression model.
• C) The prediction interval generated from a simple linear regression model will be narrowest when the value of x used to generate the predicted y value is close to the mean value of x.
• D) The prediction interval generated from a simple linear regression model will be widest when the value of x used to generate the predicted y value is close to the mean value of x.

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Definitions:

Machine-Hours

A measure of the amount of time machines are used in the production process, used as a basis for allocating manufacturing overhead costs.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as salaries of supervisors and rent of the factory building.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to operations such as utilities and salaries for managers.

Machine-Hours

A metric to quantify the operational time of machines in the production process, essential for calculating manufacturing costs and efficiency.