Consider the Four Points (20,20),(30,50),(40,30),and (50,60) $\hat{y} = 5 + 50 x$

question 1

Multiple Choice

Consider the four points (20,20) ,(30,50) ,(40,30) ,and (50,60) .The least squares line is $\hat{y} = 5 + 50 x$ Explain what "least squares" means using these data as a specific example.

• A)The line \(\hat{y}\) = 5 + 50x minimizes the sum of the vertical distances from the points to the line.
• B)The line \(\hat{y}\) = 5 + 50x minimizes the sum of the squared vertical distances from the points to the line.
• C)The line \(\hat{y}\) = 5 + 50x minimizes the sum of the squared horizontal distances from the points to the line.
• D)The line \(\hat{y}\) = 5 + 50x minimizes the square of the standard deviation.
• E)The line \(\hat{y}\) = 5 + 50x minimizes the sum of the squared difference between the x and y values.

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Definitions:

Misallocation

The inefficient distribution or usage of resources in an economy, leading to outcomes where resources could have been better utilized elsewhere.

Price Supports

Government interventions to maintain the market price of a commodity at a certain level to prevent the price from falling below a predetermined minimum.

Domestic

Pertaining to or related to the home, household, or one's own country versus foreign or international counterparts.

Foreign Economies

Refers to the economies of other nations outside of one's own, considering differing political, economic, and cultural contexts in international trade and relations.