A Vendor of Selection Tests Has Called on the Recruiting

question 71

Multiple Choice

A vendor of selection tests has called on the recruiting manager for Maxster Merchandisers,Inc.The vendor is promoting an honesty test which scores he says are strongly negatively correlated with theft.Maxster has had a long-standing problem of employee theft from warehouses.The recruiting manager asks to see some statistics.The vendor says that a high score on the test has a correlation coefficient of ____ with shoplifting behavior.

• A) -.2
• B) .1
• C) .6
• D) -.8

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product.

Consumer Surplus

The distinction between the ideal payment by consumers for a product or service and the financial outlay they make.

Average Cost

An alternative term for average total cost; the total cost divided by the quantity of output produced.

Deadweight Loss

A reduction in economic effectiveness that happens when a product or service does not reach, or cannot reach, its equilibrium state.