The Appropriate Correlation Coefficient for Measuring the Direction and Strength

question 51

Multiple Choice

The appropriate correlation coefficient for measuring the direction and strength of the linear relationship between two ranked or ordinal variables is ______.

• A) the Spearman correlation coefficient
• B) the point-biserial correlation coefficient
• C) the phi correlation coefficient
• D) none of these

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Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect knowledge, leading to firms being price takers.

Profit-maximizing Price

The selling price per unit that maximizes a firm’s profits, based on its cost structure and market demand.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.

Cost Data

Information or figures related to the expenses incurred in producing goods or services, including both fixed and variable costs.