A Consumer Product Magazine Recently Ran a Story Concerning the Increasing

question 27

Multiple Choice

A consumer product magazine recently ran a story concerning the increasing prices of digital cameras. The story stated that digital camera prices dipped a couple of years ago, but now are beginning to increase in price because of added features. According to the story, the average price of all digital cameras a couple of years ago was $\$ 215.00$ . A random sample of $n = 22$ cameras was recently taken and entered into a spreadsheet. It was desired to test to determine if that average price of all digital cameras is now more than $\$ 215.00$ . Find a rejection region appropriate for this test if we are using $\alpha = 0.05$ .

• A) Reject \(\mathrm { H } _ { 0 }\) if \(\mathrm { t } > 1.725\)
• B) Reject \(\mathrm { H } _ { 0 }\) if \(\mathrm { t } > 1.717\)
• C) Reject \(\mathrm { H } _ { 0 }\) if \(\mathrm { t } > 2.080\) or \(\mathrm { t } < - 2.080\)
• D) Reject \(\mathrm { H } _ { 0 }\) if \(\mathrm { t } > 1.721\)

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Definitions:

Present Value

Today's value of a future monetary amount or cash flow series, calculated with a designated rate of return.

Interest Rate

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage.

Utility Function

A mathematical representation of how different quantities of goods or services increase a consumer's satisfaction or happiness.

Risk Averse

A description of an individual or entity's preference to avoid risk, choosing certainty over potential higher rewards that come with greater risk.