A 001 Significance Level Is Being Used to Test a Test

question 7

Multiple Choice

A 0.01 significance level is being used to test a correlation between two variables. If the linear correlation coefficient r is found to be 0.591 and the critical values are $r = \pm 0.590$ what can you conclude?

• A) There is not sufficient evidence to support the claim of a linear correlation between the two variables.
• B) There is sufficient evidence to support the claim of a linear correlation between the two variables.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the marginal cost changes with changes in production volume.

Average Variable Cost Curve

A graphical representation showing how the average variable cost (AVC) of production changes with the level of output.

Marginal Cost

The cost added by producing one extra item of a product, essentially the change in total cost that arises when the quantity produced changes by one unit.

Variable Cost

Costs that vary directly with the level of production output, such as raw materials and direct labor costs.