Question

what does it mean to say that a data point has a residual of 1?
a. the point lies 1 unit below the regression line.
b. the point lies 1 unit above the regression line.
c. the x - coordinate of the point is 1.
d. the point lies directly on the regression line.

Explanation:

The residual is calculated as \( \text{Residual} = \text{Observed value}-\text{Predicted value}\). A positive residual means the observed value is greater than the predicted value (from the regression line). So, a residual of \(1\) implies the data - point is \(1\) unit above the regression line.

Answer:

B. The point lies 1 unit above the regression line.