Videocassette Recorder (VCR) Tapes Are Designed So That Users Can

question 46

Essay

Videocassette recorder (VCR) tapes are designed so that users can repeatedly record new material over old material. However, after a number of re-recordings the tape begins to deteriorate. A VCR tape manufacturer is experimenting with a new technology, which hopefully will produce longer-lasting tapes. Thirty of the old-style tapes and 30 utilising the new technology were used in an experiment. The tapes were used to record and re-record programs until they began to deteriorate. The number of re-recordings is assumed to be normally distributed. It is generally accepted that the number of re-recordings should exceed 55. Any tapes that do not meet this criterion are considered to be unacceptable. The number of re-recordings were observed and shown in the accompanying table. $$\begin{array} { | c | c | c | c | c | c | } \hline { \text { Old-style tapes } } &&& { \text { New-technology tapes } } \\\hline 60 & 61 & 48 & 68 & 70 & 58 \\\hline 51 & 46 & 66 & 74 & 72 & 69 \\\hline 66 & 63 & 61 & 77 & 73 & 49 \\\hline 73 & 55 & 71 & 59 & 66 & 61 \\\hline 71 & 49 & 76 & 52 & 58 & 59 \\\hline 47 & 56 & 55 & 66 & 51 & 49 \\\hline 60 & 62 & 64 & 62 & 59 & 57 \\\hline 52 & 51 & 63 & 51 & 56 & 66 \\\hline 64 & 68 & 52 & 50 & 55 & 76 \\\hline 47 & 55 & 58 & 63 & 68 & 78 \\\hline\end{array}$$ Estimate with 90% confidence the mean number of re-recordings of the new tapes.

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Definitions:

Excise Tax

A tax levied on specific goods or services, such as alcohol or gasoline, usually to discourage their consumption or to raise revenue for public purposes.

Commodity X

A placeholder term for a generic good or product in economic models.

Demand Equation

Is a mathematical representation that describes the relationship between the quantity demanded of a good or service and its price, among other factors.

New Equilibrium Quantity

This refers to the quantity at which supply and demand are equal at a new price level after changes in the market.