Dummy Variables Take on the Values of ________ and Are

question 18

Multiple Choice

Dummy variables take on the values of ________ and are used to model the effects of different levels of qualitative variables.

• A) 1 or −1
• B) 1 or 2
• C) 0 or 2
• D) 0 or 1

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Definitions:

Positive Profits

A financial gain that occurs when the revenues generated from business activities exceed the costs and expenses involved in operating the business.

Shut Down

A short-term decision by a firm to cease production due to unfavorable market conditions.

Firm

An entity like a corporation, partnership, or sole proprietorship engaged in selling goods or services for financial gain.

Price

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