SCENARIO 12-14 A Perfume Manufacturer Is Trying to Choose Between 2 Magazine

question 130

Multiple Choice

SCENARIO 12-14
A perfume manufacturer is trying to choose between 2 magazine advertising layouts.An expensive layout would include a small package of the perfume.A cheaper layout would include a "scratch- and-sniff" sample of the product.The manufacturer would use the more expensive layout only if there is evidence that it would lead to a higher approval rate.The manufacturer presents the more expensive layout to 4 groups and determines the approval rating for each group.He presents the "scratch-and-sniff" layout to 5 groups and again determines the approval rating of the perfume for each group.The data are given below.Use this to test the appropriate hypotheses with the Wilcoxon Rank Sum Test with a level of significance of 0.05.

12-34 Chi-Square and Nonparametric Tests
-Referring to Scenario 12-14,the perfume manufacturer will

• A)use the "scratch-and-sniff" layout because there is insufficient evidence to do otherwise.
• B)use the package layout because there is insufficient evidence to do otherwise.
• C)use the "scratch-and-sniff" layout because there is sufficient evidence to conclude that this is the best course of action.
• D)use the package layout because there is sufficient evidence to conclude that this is the best course of action.

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Definitions:

Human Capital

The collective skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization or country.

Equilibrium Wage

The compensation level at which labor supply meets labor demand.

Economic Profit

Total revenue minus total cost, including both explicit and implicit costs.

Barbershops

Establishments that provide hair cutting, grooming, and sometimes additional services primarily for men.