The Use of Correlational Analysis Does Not Allow You to Infer

question 19

Multiple Choice

The use of correlational analysis does not allow you to infer a cause and effect relationship. This is because a third variable, a(n) ______ variable, often accounts for the relationship between the two variables.

• A) intervening
• B) nuisance
• C) confounding
• D) dependent

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Definitions:

Duality

Alternative way of looking at the consumer’s utility maximization decision: Rather than choosing the highest indifference curve, given a budget constraint, the consumer chooses the lowest budget line that touches a given indifference curve.

Marginal Utilities

Refers to the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Lagrangian Multiplier

A method employed in constrained optimization issues to identify the function's maximum or minimum while adhering to certain restrictions.

Marginal Utility

The additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service.