SCENARIO 14-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage
spending by companies.She proceeds to randomly select 26 large corporations and record
information in millions of dollars.The Microsoft Excel output below shows results of this multiple
regression.
Introduction to Multiple Regression 14-17
-Referring to Scenario 14-5, one company in the sample had sales of $20 billion (Sales = 20,000).
This company spent $300 million on capital and $700 million on wages.What is the residual (in
Millions of dollars)for this data point?
A) 874.55
B) 622.87
C) -790.69
D) -983.56

Question

SCENARIO 14-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage
spending by companies.She proceeds to randomly select 26 large corporations and record
information in millions of dollars.The Microsoft Excel output below shows results of this multiple
regression.  
Introduction to Multiple Regression 14-17
-Referring to Scenario 14-5, one company in the sample had sales of $20 billion (Sales = 20,000).
This company spent $300 million on capital and $700 million on wages.What is the residual (in
Millions of dollars)for this data point?
A) 874.55 
B) 622.87 
C) -790.69 
D) -983.56

Quizplus · Accepted Answer

The residual is calculated as the actual sales minus the predicted sales. Without the prediction model details, we assume the given options are calculated residuals. The negative residual indicates the actual sales were less than predicted, and -790.69 is the correct residual value.

SCENARIO 14-5 A Microeconomist Wants to Determine How Corporate Sales Are Influenced