A Group of People Took a New IQ Test Twice

question 71

Multiple Choice

A group of people took a new IQ test twice. Nearly all of those who did well the first time they took it also did well the second time. Nearly all those who did poorly the first time did poorly again the second time. Therefore, this test has __________ reliability and __________ validity.

• A) high...high
• B) low...low
• C) high...unknown
• D) unknown...high

---

Definitions:

Barriers To Entry

Obstacles that prevent new competitors from easily entering an industry or area of business, such as high start-up costs or complex regulations.

Economic Profits

Profits exceeding the opportunity costs of the inputs used in the production process, an indicator of efficiency and effectiveness in resource utilization.

Mean Reversion

Suggests that performance eventually moves back toward the mean or average.

Demand And Supply Shocks

Unexpected events that cause sudden and significant changes in the demand or supply of goods and services in the economy.