Part 2 2a. A company has learned that the relationship between its advertising a
ID: 3042493 • Letter: P
Question
Part 2
2a. A company has learned that the relationship between its advertising and sales shows diminishing marginal returns. That is, as it saturates consumers with ads, the benefits of increased advertising diminish. The company should expect to find linear association between its advertising and sales.
A. The statement is true.
B. The statement is false. The association will be nonlinear since the growth in sales slows as the amount of advertising increases.
C. The statement is false. The association will be nonlinear since the growth in sales accelerates as the amount of advertising increases.
D. The statement is false. There will be no association between advertising and sales.
2b. A retailer calculated the correlation line between the price of an item (x) and the amount sold (y). The correlation line is the same if the x and y variables are exchanged.
A. The statement is true.
B. The statement is false. The slope of the correlation line will change, but the intercept will not change.
C. The statement is false. The slope and intercept of the correlation line will both change.
D. The statement is false. The intercept of the correlation line will change, but the slope will not change.
Explanation / Answer
2a)
A: Statement is true.
2b)
C. The statement is false. The slope and intercept of the correlation line will both change.