Assuming That a Regression Has Been Conducted for a Group

question 123

Multiple Choice

Assuming that a regression has been conducted for a group of small companies where x = the number of employees at the company,y = annual revenue of the company (recorded in thousands of dollars) ,and the largest company included in the study had 82 employees.The resulting regression equation is = 59.2 + 83.4x.Which of the following is true?

• A)For each additional employee,revenue on average will increase by $83.4.
• B)A company with 2100 employees could be predicted to have average revenue of about $175 million.
• C)For each additional employee,revenue on average will increase by $59.2 thousand.
• D)This model should not be used to make predictions for companies with more than 82 employees.

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Definitions:

Behavioral Economics

A field of study that examines how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions.

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Behavioral Economics

A field of economics that studies the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

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