Two Major Automobile Manufacturers Have Produced Compact Cars with Engines

question 53

Multiple Choice

Two major automobile manufacturers have produced compact cars with engines of the same size. We are interested in determining whether or not there is a significant difference in the mean MPG (miles per gallon) when testing for the fuel efficiency of these two brands of automobiles. A random sample of eight cars from each manufacturer is selected, and eight drivers are selected to drive each automobile for a specified distance. The following data (in miles per gallon) show the results of the test. Assume the population of differences is normally distributed. ​ The mean of the differences is

• A) .5.
• B) 1.5.
• C) 2.0.
• D) 2.5.

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Definitions:

Producer Surplus

The gap highlighting the difference between the initial asking price by sellers for goods or services and the ultimately received price.

Specific Tax

A tax that is levied as a fixed amount per unit on a particular good or service.

Inelastic Demand

A situation where demand for a product or service is relatively unmoved or less sensitive to changes in price.

Elastic Supply

A situation where the quantity of a good supplied by producers changes significantly in response to a small change in price.