The Correlation Between Two Variables Is 0

question 74

Multiple Choice

The correlation between two variables is 0.29 for a sample of 12 observations. Based on a null hypothesis of no correlation versus an alternative hypothesis of positive correlation, what conclusion may be drawn at the .05 level of significance?

• A) Reject H0. There is evidence of positive correlation between the variables.
• B) Do not reject H0. We do not have evidence of positive correlation.
• C) Reject H0. We have evidence of negative correlation.
• D) None of the above.

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Definitions:

Purely Competitive Market

A market structure characterized by a large number of small firms selling identical products, with no single firm able to influence market prices.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales, such as rent, salaries, or loan payments.

Profit-Maximizing Output

The level of production at which a firm achieves the maximum possible profit, where marginal cost equals marginal revenue.

Marginal Revenue

The additional revenue generated from selling one more unit of a good or service.