The Results of the Regression Analysis to Estimate Delivery Costs

question 74

Multiple Choice

The results of the regression analysis to estimate delivery costs are as follows
Which of the following is an appropriate cost equation based on the above regression output?

• A) Delivery costs = $366.39 + $0.58 X₁,where X₁ is the number of cargos.
• B) Delivery costs = $0.662 + $2.985 X₁,where X₁ is the number of cargos.
• C) Delivery costs = $242.51 + $1.74 X₁,where X₁ is the number of cargos.
• D) Delivery costs = $48861.07 + $1.74 X₁,where X₁ is the number of cargos.

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Definitions:

Corrective Taxes

Taxes implemented to correct the market outcomes that are not efficient by internalizing external costs, often used in environmental policy to address pollution.

Regulations

Standards and rules formulated by governmental or nongovernmental organizations to govern conduct within certain spheres of activity.

Pollution Permits

Marketable permits allowing holders to emit a certain amount of pollution, used as a regulatory tool to control environmental impacts.

Corrective Tax

A tax designed to induce private decision-makers to take account of the social costs that arise from a negative externality.