A Low Correlation Coefficient Implies That

question 4

Multiple Choice

A low correlation coefficient implies that

• A)the line always has a flat slope
• B)in the scatterplot, the points fall quite far away from the line
• C)the two variables are unrelated
• D)you should use a tighter scale of the vertical and horizontal axis to bring the observations closer to the line

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Definitions:

Diminishing Returns

A principle stating that after a certain point, additional investment or effort yields progressively smaller increases in output.

Marginal-cost Curve

The marginal-cost curve represents how the cost of producing one additional unit of a good changes as its production volume varies.

Marginal Product

The additional output that is generated by employing one more unit of a specific input, ceteris paribus.

Total Fixed Cost

The sum of all expenses that remain constant regardless of the level of production or output within a business.