A Positive Covariance Between Two Variables Indicates That

question 110

Multiple Choice

A positive covariance between two variables indicates that

• A) the two variables move in different directions.
• B) the two variables move in the same direction.
• C) the two variables are low risk.
• D) the two variables are high risk.
• E) the two variables are risk free.

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Definitions:

Gains From Trade

The benefits obtained by countries or individuals from engaging in international trade, allowing for consumption beyond their production possibilities.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and production technology.

Marginal Rate Of Transformation

Amount of one good that must be given up to produce one additional unit of a second good.

Price

The amount of money required to purchase a good or service, usually determined by supply and demand in the market.