In the Regression of Y on X, the Error Term

question 20

Multiple Choice

In the regression of y on x, the error term exhibits heteroskedasticity if _____.

• A)it has a constant variance
• B)Var(y|x) is a function of x
• C)x is a function of y
• D)y is a function of x

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Definitions:

Average Cost

Average cost, also known as unit cost, is the total cost of production divided by the number of units produced.

Maximize Profits

A business goal to achieve the highest possible profit by optimizing sales revenue and minimizing costs.

Constant Marginal

Pertains to a situation where the additional cost or benefit of producing one more unit of a good or service remains unchanged.

Average Cost

The sum of all production expenses divided by the amount of product made.