A Local Tennis Pro-Shop Strings Tennis Rackets at the Tension $\overline { \mathrm { x } } = 51 \mathrm { psi } , \mathrm { s } = 2.4$

question 140

Multiple Choice

A local tennis pro-shop strings tennis rackets at the tension (pounds per square inch) requested by thecustomer. Recently a customer made a claim that the pro-shop consistently strings rackets at lower tensions, onaverage, than requested. To support this claim, the customer asked the pro shop to string 12 new rackets at 53psi. Upon receiving the rackets, the customer measured the tension of each and calculated the followingsummary statistics: $\overline { \mathrm { x } } = 51 \mathrm { psi } , \mathrm { s } = 2.4$ psi. In order to conduct the test, the customer selected a significance levelof α = .05. Interpret this value.

• A) The probability of concluding that the true mean is less than 53 psi when in fact it is equal to 53 psi is only .05.
• B) The smallest value of α that you can use and still reject H0 is 0.05.
• C) The probability of making a Type II error is 0.95.
• D) There is a 5% chance that the sample will be biased.

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Definitions:

X-Inefficiency

The difference between efficient behavior of businesses in a competitive market and their actual behavior due to a lack of competitive pressure.

Pure Competition

A market structure characterized by an unlimited number of small sellers, identical products, and free entry and exit, leading to perfect competition.

Oligopoly

A market structure in which a few companies dominate the industry, having significant control over prices and supply.

Monopolistic Competition

A trading environment where countless firms peddle products that bear resemblance but are not exact duplicates, offering them a fragment of control in the marketplace.