If You Were to Use Excel to Estimate Y =

question 90

Multiple Choice

If you were to use Excel to estimate Y = b0 + b1 X + ε with binary Y (0 or 1) you would expect

• A)an error message because Excel does not allow a binary Y.
• B)predicted probabilities greater than 1 or less than 0.
• C)predictions that are either 0 or 1.
• D)residuals that are homoscedastic and normally distributed.

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Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitors.

Absolute Advantage

The ability of an entity to produce more of a good or service than competitors using the same amount of resources.

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than other entities, leading to more efficient trade possibilities.

Production

Production refers to the process of combining various material inputs and immaterial inputs (plans, knowledge) to make something for consumption (output).