The Correlations Table Below Indicates That: Correlations ** Correlation Is Significant at the 0

question 32

Multiple Choice

The correlations table below indicates that: Correlations
$\begin{array}{|l|l|r|r|}\hline & & {\text { Sales }} & \begin{array}{r}\text { Advertising } \\\text { expenditure }\end{array} \\\hline \text { Sales } & \text { Pearson correlation } & 1 & 0.753 (^{* *}) \\\hline & \text { Sig. (two-tailed) } & & 0.005 \\\hline & N & 100 & 100 \\\hline \begin{array}{l}\text { Adverting } \\\text { expenditure }\end{array} & \text { Pearson correlation } & 0.753 (^{* *}) & 1 \\\hline & \text { Sig. (two-tailed) } & 0.000 & \\\hline & N & 100 & 100 \\\hline\end{array}$ ** Correlation is significant at the 0.01 level (two-tailed) .

• A) about 75 per cent of variance in sales can be explained by the variance in advertising expenditure.
• B) about 57 per cent of the variance in advertising expenditure can be explained by the variance in sales.
• C) about 57 per cent of the variance in sales can be explained by the variance in advertising expenditure.
• D) about 75 per cent of the variance in advertising expenditure can be explained by the variance in sales.

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Definitions:

Purely Competitive

A rephrasing of "Pure Competition," indicating a market structure with many participants, no barriers to entry, and a standard product.

Optimal Allocation

The most efficient distribution of resources in a manner that maximizes the net benefit received from their use.

Scarce Resources

Natural or economic resources that are limited in supply compared to the demand for them.

Long-run Equilibrium

Long-run equilibrium occurs when all firms in a market or industry are producing at their most efficient level, with no incentive to enter or exit the market.