What Happens When Two Variables Have a Negative Correlation

question 224

Multiple Choice

What happens when two variables have a negative correlation?

• A) They tend to move in opposite directions.
• B) They tend to move in the same direction.
• C) One variable will move while the other remains constant.
• D) The movement of the two variables is unpredictable.

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Definitions:

Wage

The payment to labor for its contribution to the production process, typically calculated on an hourly, daily, or piecework basis.

Marginal Expenditure

Additional cost of buying one more unit of a good.

Factor of Production

Resource inputs used in the production of goods and services, typically categorized into land, labor, capital, and sometimes entrepreneurship.

Marginal Revenue Product

The additional revenue generated from using an additional unit of a resource or input.