In Order to Determine the Validity of Its Tests, BluTech

question 97

True/False

In order to determine the validity of its tests, BluTech compares the test scores of job applicants against the performance data of existing employees. BluTech is validating its tests through predictive validity.

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Definitions:

Demand Function

A mathematical expression that describes the relationship between the quantity demanded of a good or service and its determinants such as price, income, and prices of related goods.

Consumer's Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Mead

A fermented beverage made from honey, water, and sometimes additional ingredients such as fruits, spices, grains, or hops.

Utility Function

A mathematical representation of a consumer's preference ranking for bundles of goods or services measured in terms of utility.