Suppose a Third Variable Inserted into an Analysis Changes the Results

question 16

True/False

Suppose a third variable inserted into an analysis changes the results of when two other variables were studied previously.This third variable is called a moderator variable.

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Definitions:

X-inefficiency

The difference between efficient behaviors of businesses in a competitive market and their actual behaviors due to lack of competitive pressure.

Decreasing-cost Industry

An industry in which the costs of production decrease as the industry grows and output increases.

Decreasing-cost Industry

An industry in which the costs of production per unit decrease as the industry grows and output increases.

Long-run Equilibrium

A state in which all factors of production and outputs are adjusted so that prices, supply, and demand are stable over time.