What Does an R of -1.00 Indicate

question 2

Multiple Choice

What does an r of -1.00 indicate?

• A) A perfect inverse relationship
• B) A perfect direct relationship
• C) The strongest possible direct relationship
• D) A complete absence of a relationship

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Definitions:

Price Decreases

A reduction in the cost at which goods and services are sold in the market.

Net Seller

An individual or entity that sells more of a security, commodity, or other assets than they buy in a given period.

Quasilinear Preferences

Preferences where the utility function is linear in one argument, often money, which allows for easy analysis of changes in welfare from different quantities of goods.

Consumer's Surplus

The variance between what consumers are prepared and capable of spending for a product or service and the actual sum they end up paying.