What Does a Positive Regression Residual Mean

question 29

Multiple Choice

What does a positive regression residual mean?

• A) The two variables have a positive correlation.
• B) That a case's actual value on the dependent variable is exactly what was predicted by the regression equation.
• C) That a case's actual value on the dependent variable is greater than what was predicted by the regression equation.
• D) The slope of the best-fitting straight line is positive.

Grasp the concept of optimal combination of capital and labor for a firm.

Learn how to derive a total cost curve from isoquants and isocost lines.

Comprehend the calculation and implications of the slope of isocost lines.

Understand the relationship between isoquants, isocost lines, and the firm's production costs.

---

Definitions:

Least-squares Regression

A statistical method used to determine the line of best fit by minimizing the squared differences between observed values and those predicted by a linear function.

Mixed Cost

Expenses that have both fixed and variable components, varying with the level of activity but not in direct proportion.

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Fixed Manufacturing Cost

Costs that do not change with the level of production, such as rent, salaries, and insurance.