Heidi Runs a Multiple Regression for the Output of Cheese

question 1

Multiple Choice

Heidi runs a multiple regression for the output of cheese curds by using the daily temperature and the consumption of sweet clover.The intercept term is 23,the slope coefficient for the daily temperature is 1.5 and the slope coefficient for the consumption of sweet clover is 0.Which of these conclusions is most appropriate?

• A) Heidi should collect more data.
• B) The most important term in Heidi's model is the intercept.
• C) As the daily temperature rises, the intercept term probably decreases.
• D) Heidi should drop the sweet clover term from her model.

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Definitions:

Production Function

A mathematical model that describes the relationship between inputs used in production and the output produced from those inputs.

Labor Hired

The quantity of work force employed by businesses to perform various tasks, measured in worker units or hours.

Minimize Costs

The process of finding strategies and methods to reduce expenses and operational costs to the lowest possible level without sacrificing quality or performance.

Production Function

An equation that describes the relationship between inputs (like labor, capital) and the maximum output that can be produced with those inputs.