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:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale, holding other factors constant.

Equilibrium Price

The market price at which the supply of an item equals the quantity demanded.

Equilibrium Quantity

The volume of goods or services that are both presented and required at the price where supply meets demand in a market.

Quantity Demanded

Refers to the total amount of a good or service that consumers are willing to purchase at a given price.