Consider the Following Residual Plot

question 12

Multiple Choice

Consider the following residual plot. Given this plot, what conclusion should be reached?

• A) There appears to be no basis for concluding that the relationship between the x and y variable is not linear.
• B) The assumption of constant variance seems to be supported by this plot.
• C) Both A and B are true.
• D) Neither A nor B are true.

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Definitions:

Rival In Consumption

A characteristic of a good or service that means its consumption by one individual prevents simultaneous consumption by another individual.

Private Good

A product or service that is consumed by one individual without providing benefit to others and is subject to exclusion and rivalry.

Fish Fillet

A piece of fish that has been cut or sliced away from the bone, often prepared as a food item.

Excludable

A property of a good or service whereby it is possible to prevent people from using it if they have not paid for it or met specific conditions.