A Local Consumer Reporter Wants to Compare the Average Costs

question 36

Multiple Choice

A local consumer reporter wants to compare the average costs of grocery items purchased at three different supermarkets, A, B, and C. Prices (in dollars) were recorded for a sample of 60 randomly selected grocery items at each of the three supermarkets. In order to reduce item-to-item variation, the prices were recorded for each item on the same day at each supermarket.
The results of the ANOVA are summarized in the following table. $$\begin{array} { l r r r r r } \text { Source } & \text { df } & \text { Anova SS } & \text { Mean Square } & \text { F Value } & \text { Pr > F } \\\hline \text { Supermkt } & 2 & 2.6412678 & 1.3206399 & 39.23 & 0.0001 \\\text { Item } & 59 & 215.5949311 & 3.6541514 & 108.54 & 0.0001 \\\text { Error } & 118 & 3.9725322 & 0.0336655 & &\end{array}$$ Based on the p-value of the test, make the proper conclusion.

• A) There is sufficient evidence (at \(\alpha = .01\) ) to indicate that the mean prices of grocery items at the three supermarkets are identical.
• B) There is insufficient evidence (at \(\alpha = .01\) ) to indicate differences among the mean prices of grocery items at the three supermarkets.
• C) There is sufficient evidence (at \(\alpha = .01\) ) to indicate differences among the mean prices of grocery items at the three supermarkets.
• D) No conclusions can be drawn from the given information.

Understand the concept of indifference curves and their relation to consumer preferences.

Grasp the effect of changes in income and prices on consumer equilibrium.

Learn how to interpret shifts in the budget line and what they imply about price and income changes.

Comprehend the marginal rate of substitution and its role in consumer choice.

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Definitions:

Profit Margin

Profit Margin is a financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating how much profit a company retains from its sales.

Sales Increase

An upward movement in the volume or value of products or services sold by a company over a given period.

External Financing Needed

This is the amount of money a company needs to seek from external sources to finance its operations, growth, or expansions that cannot be funded through internal cash flow alone.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming year, such as buildings, machinery, and equipment.