The Assembly Time for a Product Is Uniformly Distributed Between

question 3

Multiple Choice

The assembly time for a product is uniformly distributed between 6 and 10 minutes. The probability of assembling the product between 7 and 9 minutes is _____.

• A) 0
• B) .50
• C) .20
• D) 1

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Definitions:

Diminishing Returns

The principle that says as more of a variable input is added to a fixed input, the incremental gain in output will eventually decrease.

Normal Profits

The level of profit that is necessary to cover the costs of a firm, including the opportunity costs of capital, ensuring the firm remains in business.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns, without paying rent or purchasing them.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs.