When Finding the Test Value for An $F$ Test, the Smaller of the Two Variances Should Be Placed

question 23

True/False

When finding the test value for an $F$ test, the smaller of the two variances should be placed in the numerator.

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Definitions:

AVC

Average Variable Cost is the total variable costs divided by the quantity of output produced; it represents the variable cost per unit of output.

Optimal Plant Size

The scale of production at which a firm can produce goods at the lowest average cost, maximizing efficiency.

Fixed Factors

Resources in production that cannot be easily increased or decreased in the short term, such as land or certain machinery.