Please Consider the Following Figure: the Consumer Chooses a on Budget

question 78

Multiple Choice

Please consider the following figure: The consumer chooses A on budget line I1 and B on budget line I2. Which of the following rankings describes the consumer's preferences (first is highest ranked and last is lowest ranked) ?

• A) A-B-C-D
• B) A-D-B-C
• C) A-B-D-C
• D) We do not have enough information to rank all four bundles.

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Definitions:

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, typically denoted by alpha.

Rule of Five

A statistical rule of thumb asserting that normal approximation can be used if an expected frequency is 5 or more in all categories of a binomial distribution.

Chi-squared Goodness-of-fit Test

A statistical test to determine if observed data deviates significantly from the expected distribution.

Grade Distribution

The statistical spread or pattern of grades received by students in a course or examination.