In the Estimation of a Multiple Regression Model with Two

question 111

Multiple Choice

In the estimation of a multiple regression model with two explanatory variables and 20 observations,SSE = 550 and SST = 1,000.The value of adjusted R² is the closest to ____.

• A) 0.39
• B) 0.45
• C) 0.55
• D) 0.61

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Definitions:

Price-Taking Behavior

The action of accepting the market price as given, typical of participants in a perfectly competitive market who cannot influence prices.

Slope

The measure of the steepness or incline of a line, calculating the ratio of the vertical change to the horizontal change between two points on the line.

Marginal Revenue Curve

A graph that displays how marginal revenue varies as output changes.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price-taking behavior.