Minimizing the Sum of the Squared Deviations Around the Line

question 19

Multiple Choice

Minimizing the sum of the squared deviations around the line is called:

• A)mean squared error technique.
• B)mean absolute deviation.
• C)double smoothing.
• D)least squares estimation.
• E)predictor regression.

---

Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Law of Diminishing Marginal Utility

The principle that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Diminishing Marginal Utility

is an economic principle stating that as a person increases consumption of a product, there is a decline in the additional satisfaction (utility) that person gains from consuming one more unit of the product.

Marginal Utility

The additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a good or service.