If the Coefficient of Correlation Between X and Y Is

question 205

Multiple Choice

If the coefficient of correlation between x and y is close to −1.0, which of the following statements is correct?

• A)There is a strong, positive linear relationship between x and y, where there may or may not be any causal relationship between x and y.
• B)There is a strong, negative linear relationship between x and y, where there must be a causal relationship between x and y.
• C)There is a weak, negative linear relationship between x and y, where there may or may not be any causal relationship between x and y.
• D)There is a strong, negative linear relationship between x and y, where there may or may not be any causal relationship between x and y.

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Definitions:

Most Efficient Output

The level of production at which a firm or economy can produce goods at the lowest average cost, maximizing the use of resources.

ATC Curve

The Average Total Cost Curve, which represents the average cost per unit of output over various levels of production, illustrating how costs change with output levels.

AVC Curve

The average variable cost curve, which plots the variable cost per unit of output at different levels of production.

Perfect Competitor's Firm

A company operating in a market where no single firm can influence price, and all firms sell identical products.