When Two Variables Have a Negative Correlation

question 1

Multiple Choice

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 variables' values are never positive.

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Definitions:

Producer Surplus

Producer surplus is the difference between the amount producers are willing and able to supply a good for and the actual amount they receive due to market price.

Autarky

An economic system wherein a country or entity is self-sufficient and does not engage in international trade.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, representing the benefit to producers.

Total Surplus

The total net gain to consumers and producers from trading in a market; the sum of the producer surplus and the consumer surplus.