Interpreting the Intercept in a Sample Regression Function Is

question 43

Multiple Choice

Interpreting the intercept in a sample regression function is

• A)not reasonable because you never observe values of the explanatory variables around the origin.
• B)reasonable because under certain conditions the estimator is BLUE.
• C)reasonable if your sample contains values of Xi around the origin.
• D)not reasonable because economists are interested in the effect of a change in X on the change in Y.

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Definitions:

Unit Product Cost

The cost assigned to a single unit of product, encompassing all expenses directly and indirectly involved in its production.

Direct Labor Cost

The total cost of all the labor directly involved in the production of goods or services.

Net Operating Income

The income earned from the primary activities of a business, not including expenses from interest and taxes.

Absorption Costing

An accounting method that includes all manufacturing costs (variable and fixed) in the cost of a product.