Logistic Regression Uses the Log-Likelihood Statistic to Evaluate the Fit

question 21

Multiple Choice

Logistic regression uses the log-likelihood statistic to evaluate the fit of a model, based on the predicted and observed values, and is closely related to the deviance, but how is deviance expressed?

• A) Deviance = -2 × log-likelihood
• B) Deviance = -2 / log-likelihood
• C) Deviance = log-likelihood / (-2)
• D) Deviance = log-likelihood / ((-2) × (-2))

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Definitions:

Gray Market

involves the trade of legal goods through unauthorized, unofficial, or unintended channels, usually not illegal but discouraged by manufacturers.

Resource Market

The marketplace where resources or inputs (like labor, capital, and raw materials) used to produce goods and services are bought and sold.

Excess Burden

Refers to the cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved, leading to a net loss in total surplus.