Rolando Realizes That Whenever He Studies for at Least Two

question 18

Multiple Choice

Rolando realizes that whenever he studies for at least two hours immediately before a physics exam, he gets an A on the exam, but when he does not study immediately before an exam, he gets no higher than a C on the exam. He concludes that the time spent studying immediately before the exams is responsible for his improved grades. Rolando is

• A) definitely confusing correlation with causation.
• B) very probably correct in his conclusion that the time spent studying immediately before his exams is a reason for his improved grades.
• C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the improved exam grades forced him to study immediately before each test.
• D) probably misguided in that there is no apparent correlation or causation in this situation.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor expenses.

Monthly Interest Rate

The interest rate applicable to an investment or loan on a monthly basis.

Net 30 Policy

A credit term indicating that payment is due in full 30 days after the invoice date.

Break-Even Level Of Sales

The amount of revenue from sales that is exactly sufficient to cover both fixed and variable costs, resulting in zero net profit or loss.