Historical Data on Prices and Quantities Sold Do Not Provide

question 2

Multiple Choice

Historical data on prices and quantities sold do not provide the basis for drawing an accurate demand curve because

• A)reporters who gather these data are often wrong.
• B)factors other than price may change over time.
• C)they do not include measures of price close to the quantity axis.
• D)they sometimes tend to be clustered around one point.

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Definitions:

z

In statistics, 'z' often stands for the z-score, a measure of how many standard deviations an element is from the mean.

Standard Normal Random Variable

A random variable that follows a normal distribution with a mean of 0 and a standard deviation of 1.

Area

A measure of the extent of a surface or shape, calculated in square units.

z

A standard score that indicates how many standard deviations an element is from the mean of its distribution.