A Test's Purpose Includes Not Only What the Test Will

question 55

Multiple Choice

A test's purpose includes not only what the test will measure but also ______.

• A) the test's reliability and validity
• B) the type of setting in which the test will be used
• C) the theory the test relies on
• D) how the test users will use the test scores

Understand managerial decision-making steps in capital budgeting.

Identify and analyze relevant data for making investment decisions.

Understand and apply the concept of the time value of money in capital budgeting.

Understand the concept of reader benefits and their role in appealing to audiences.

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Definitions:

Revealed Preference

A theory that determines consumer's preferences by observing their purchasing habits and behaviors instead of their preferences being explicitly stated.

Revealed Preference

A theory that assumes individuals' preferences can be determined by their purchasing habits.

Weak Axiom

A principle in consumer choice theory stating that if a consumer prefers bundle A over bundle B when both are available at the same prices, then the consumer will not purchase more of bundle B if its price rises.

Revealed Preference

An economic theory stating that the preferences of consumers can be understood by their purchasing habits.