(Figure: Externalities and Network Effects) Based on the Graph, We

question 327

Multiple Choice

(Figure: Externalities and Network Effects) Based on the graph, we see that if a consumer joins the social network depicted

• A) D_P shifts right and the external benefit remains unchanged.
• B) D_P remains unchanged and the external benefit increases.
• C) D_P shifts right and the external benefit decreases.
• D) D_P shifts right and the external benefit increases.

Understand the concept of validity coefficient and its significance in test assessment.

Recognize the importance of reliability as a prerequisite for validity.

Understand the concept of content validity ratio and its application.

Describe the process and importance of item analysis in assessing construct validity.

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Definitions:

Fixed Expenses

Recurring costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to a change in its sales volume, signifying the impact of fixed versus variable costs.

Variable Expenses

Costs that vary directly with the level of production or sales volume, such as raw materials, direct labor, and sales commissions.

Fixed Expenses

Costs that remain constant for a set period of time, regardless of changes in the level of production or sales volume.