All of the Following Are Assumptions of the Error Terms

question 66

Multiple Choice

All of the following are assumptions of the error terms in the simple linear regression model except:

• A)Errors are normally distributed.
• B)Error terms have a mean of zero.
• C)Error terms have a constant variance.
• D)Error terms are dependent on each other.

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Definitions:

Marginal Revenue

The extra revenue gained by selling an additional unit of a product or service.

Economies of Scale

Cost advantages that entities attain due to the scale of operation, with costs per unit of output generally decreasing with increasing scale.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, measuring the performance exceeding opportunity costs.