Suppose Two Variables Are Negatively Related

question 70

Multiple Choice

Suppose two variables are negatively related. Which of the following regression equations might describe this relationship?

• A) Y = 3.21 + 2.41X
• B) Y = −.45 + 4.12X
• C) Y = 18.62 - 1.21X

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Definitions:

Short-Run Average Total Cost (ATC₂)

The total cost divided by the quantity produced in the short-run, where some inputs are fixed.

Diminishing Marginal Returns

A principle stating that if one factor of production is increased while others are kept constant, the resulting increase in output will eventually decline.

Short-Run Average Total Cost (ATC)

The total cost per unit of output in the short run, where some factors of production are fixed.

Profit-Maximizing Level

The output level at which a firm achieves the highest profit, where marginal revenue equals marginal cost.