It Is Desired to Estimate the Average Total Compensation of CEOs

question 7

Multiple Choice

It is desired to estimate the average total compensation of CEOs in the Service industry. Data were randomly collected from 18 CEOs and the 97% confidence interval was calculated to be ($2,181,260, $5,836,180) . Which of the following interpretations is correct?

• A) In the population of Service industry CEOs, 97% of them will have total compensations that fall in the interval $2,181,260 to $5,836,180.
• B) We are 97% confident that the average total compensation of all CEOs in the Service industry falls in the interval $2,181,260 to $5,836,180.
• C) We are 97% confident that the mean of the sampled CEOs falls in the interval $2,181,260 to $5,836,180.
• D) 97% of the sampled total compensation values fell between $2,181,260 and $5,836,180.

---

Definitions:

Profitable Hire

An employee whose contributions generate more revenue than the cost of their employment, making them financially beneficial to the company.

Marginal Revenue Product

The additional revenue generated from using one more unit of input, commonly used in decision-making about resource allocation.

Total Revenue

The overall amount of money generated by a business from the sale of goods or services, calculated as the unit price times the quantity sold.

Resource Pricing

The determination of the price for natural resources, influenced by factors such as scarcity, demand, and regulatory policies.