CIMA Fundamentals of Business Economics BA1 Question # 124 Topic 13 Discussion
BA1 Exam Topic 13 Question 124 Discussion:
Question #: 124
Topic #: 13
A commercial airline uses its database to develop the following regression model to predict the cost of a flight Y (in dollars) by number of passengers:
Y = 1,570 +40 7x
Which of the following statements is correct in relation to the airline'?
A.
The cost of a flight will increase by $40.7 when an additional passenger is added to the flight.
B.
The regression model makes accurate predictions for this commercial airline, therefore it will provide good forecasts for other commercial airlines.
C.
The positive intercept in the model indicates a positive relationship between the cost of a flight and the number of passengers.
D.
If each pair of data points is plotted on a graph with Y on the vertical axis and X on the horizontal axis, there will be a downward sloping line.
Chosen Answer:
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