The Correlation Between a Family's Weekly Income and the Amount

question 639

Multiple Choice

The correlation between a family's weekly income and the amount they spend on restaurant meals
Is found to be r = 0.30. Which must be true?
I. Families tend to spend about 30% of their incomes in restaurants.
II. In general, the higher the income, the more the family spends in restaurants.
III. The line of best fit passes through 30% of the (income, restaurant$) data points.

• A) III only
• B) I only
• C) II and III only
• D) I, II, and III
• E) II only

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Definitions:

Monopolistic Industry

An industry dominated by a single firm that has control over the market prices and supply of a product or service.

Patent

A legal right granted to an inventor, giving them the exclusive right to make, use, or sell their invention for a certain period of time.

Long Run

A period in economic analysis during which factors of production and costs are fully adjustable, allowing all inputs to production to be varied.

Marginal Revenue

This refers to the additional income earned by selling one more unit of a good or service.