What Additional Information Is Obtained by Measuring Two Individuals on an Ordinal

question 7

Multiple Choice

What additional information is obtained by measuring two individuals on an ordinal scale compared to a nominal scale?

• A)Whether the measurements are the same or different
• B)The direction of the difference
• C)The size of the difference
• D)None of the other options is correct

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Definitions:

Socially Optimal Output

The level of production of goods and services that results in the most efficient allocation of resources, typically considered at the point where marginal social cost equals marginal social benefit.

Ceiling Price

A legally imposed maximum price that can be charged for a good or service, intended to prevent prices from becoming too high.

Allocative Efficiency

A condition of distributing resources where improving the situation of one person results in the detriment of another.

Economic Profits

The surplus remaining after deducting both the explicit and implicit costs from total revenues; represents extra earnings above the next best alternative.