I for a Normal Probability Distribution, About 95 Percent of the Area

question 116

Multiple Choice

i. For a normal probability distribution, about 95 percent of the area under normal curve is within plus and minus two standard deviations of the mean and practically all (99.73 percent) of the area under the normal curve is within three standard deviations of the mean.
Ii) The total area under the normal curve is 1.
Iii) The mean of a normal probability distribution is 500 and the standard deviation is 10. About 68 percent of the observations lie between 480 and 520.

• A) (i), (ii) and (iii) are all correct statements
• B) (i) is a correct statement but not (ii) or (iii).
• C) (i) and, (iii) are correct statements but not (ii).
• D) (i) and, (ii) are correct statements but not (iii).
• E) All statements are false

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is unattainable.

Units Bought

Refers to the quantity of a particular good or service purchased by consumers or businesses.

Tax Imposed

A financial charge or other levy placed upon an individual or a legal entity by a state or a functional equivalent of a state.

Consumer Surplus

The difference between the amount consumers are willing to pay for a good or service versus what they actually pay.