During the Last Energy Crisis, a Government Official Claimed That

question 81

Essay

During the last energy crisis, a government official claimed that the average car owner refills the tank when there is more than 3 gallons left. To check the claim, 10 cars were surveyed as they entered a gas station. The amount of gas remaining before refill was measured and recorded as follows (in gallons): 3, 5, 3, 2, 3, 3, 2, 6, 4, and 1. Assume that the amount of gas remaining in tanks is normally distributed with a standard deviation of 1 gallon. Compute the probability of a Type II error and the power of the test if the true average amount of gas remaining in tanks is 3.5 gallons.

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Definitions:

Market Demand Curve

A graphical representation of the demand for all consumers in a market for a specific good or service over a range of prices.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Willingness To Pay

The maximum price at which a consumer is prepared to buy a good or service, reflecting the perceived value of the product to the consumer.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be consumed by everyone and one person's consumption does not diminish another's.