Deciding That a Causes B When in Fact B Causes

question 45

True/False

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion to the activity or production level of a business.