A Quality Control Engineer Is in Charge of the Manufacture

question 34

Multiple Choice

A quality control engineer is in charge of the manufacture of computer disks. Two different processes can be used to manufacture the disks. He suspects that the Kohler method produces a greater proportion of defects than the Russell method. He samples 150 of the Kohler and 200 of the Russell disks and finds that 27 and 18 of them, respectively, are defective. If Kohler is designated as "Group 1" and Russell is designated as "Group 2," which of the following tests will you use to find out if the Kohler method is worse than the Russell method?

• A) paired t test
• B) Z test for difference in proportions
• C) χ² test for difference in proportions
• D) McNemar test

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Definitions:

Deadweight Loss

A reduction in economic productivity occurring when there is no achievement of equilibrium for a good or service.

Marginal Revenue

The enhanced income derived from peddling an additional unit of a product or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service, a critical factor in economic decision-making.

Predatory Pricing

Practice of pricing to drive current competitors out of business and to discourage new entrants in a market so that a firm can enjoy higher future profits.