What Statistic Should Be Used to Find Out Whether There

question 42

Multiple Choice

What statistic should be used to find out whether there is a relationship between years of education and annual income?

• A)The Pearson correlation coefficient
• B)The Spearman rank-order correlation coefficient
• C)The point-biserial correlation coefficient
• D)The nonlinear correlation coefficient

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Definitions:

Allocative Efficiency

A state of resource allocation where resources are distributed according to consumer preferences, leading to optimal production levels and pricing.

Corrective Tax

A tax designed to encourage private decision makers to take into account the social costs that arise from a negative externality.

Allocative Efficiency

A state where resources are allocated in a way that maximizes the net benefit to society, with products being produced at a quantity where the price equals marginal cost.

Consumer Surplus

The contrast between the total payment consumers are willing and financially able to make for a good or service and the amount they truly pay.