The Coefficient of Determination Is Important in Explaining Variances in Estimating

question 131

Multiple Choice

The coefficient of determination is important in explaining variances in estimating equations. For a certain estimating equation, the unexplained variation was given as 26,505. The total variation was given as 46,500. What is the coefficient of determination for the equation?

• A)0.34
• B)0.43
• C)0.57
• D)0.66

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Definitions:

Private Goods

Goods that are excludable and rival in consumption, meaning their use is limited to paying customers and one person's use of the good prevents another's use of it.

Prices

The sum of money needed to buy a product or service.

Efficient Allocation

The optimal distribution of resources in an economy, where resources are utilized in a manner that maximizes societal welfare without any wastage.

Rival in Consumption

A characteristic of a good whereby one person's consumption reduces the availability of the good for another person.