A Correlation of

question 36

Multiple Choice

A correlation of .95 has been found between levels of extraversion and liking for parties. What can be concluded from this result?

• A) Being more extraverted causes people to like parties to a greater extent.
• B) Fear of loneliness causes both high levels of extraversion and increased liking for parties.
• C) Liking to go to parties causes people to become more extraverted.
• D) There is a strong association between extraversion and liking for parties.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one good for another.

Income Effect

The change in an individual's or market's consumption resulting from a change in real income.

Inferior Good

A type of good for which demand decreases as the income of consumers increases.

Convex Preferences

A preference structure where a consumer prefers mixtures or averages of two goods or bundles to extreme amounts of one good or bundle.