Mktg

Tute 4 Ch 5&6

Chapter 5 Review Exercises [p153-154]: 5.1 ,5.3,5.6,5.7, 5.12

1. Technically, what do we mean when we say ‘X was measured’?

First of all, we know that properties or characteristics of things are measured. That is, we do not measure people, but we might measure their weight or height. When we say, ‘X was measured’, we mean that a number (numeral) has been assigned to X according to certain rules governing the property, of which X is one. Therefore, X must be a characteristic of something. The number system used reveals the relationships involved, of which X is one. For example, if X is the income of Y Company, we mean that a number such as $115 000 has been assigned according to the accounting rules for determining income. The number system employed, having to do with dollars in this case, reveals the relative relationship of the $115 000 figure to other income figures.

* 3. Describe the following scales: nominal, ordinal, interval, ratio. Give an example of each. Which scales are applied in accounting and where?

* Nominal scale. Numbers are used as labels or names. The number does not indicate a quality or characteristic of the thing measured. The numbering of football players is a simple example. The use of this scale does not constitute an act of measurement.

* Ordinal scale. The number assigned to each object of a set indicates its rank order with respect to a given property. An example is the assignment of numbers to investment alternatives according to their profitability (rate of return); or the assignment of numbers to candidates for a certain job according to the measurer’s preference. The weakness of this scale is that the intervals between the numbers are not necessarily equal, and the number does not indicate the ‘quantity’ of the property.

* Interval scale. For an interval scale, the numbers show the rank order of the objects with respect to a given property, but unlike the ordinal scale...