A Supplier of DVDs Claims That No More Than 1

question 36

Multiple Choice

A supplier of DVDs claims that no more than 1% of the DVDs are defective. In a random sample of 600 DVDs, it is found that 3% are defective, but the supplier claims that this is only a sample fluctuation. At the 0.01 level of significance, test the supplier's claim that no more than 1% are defective.

• A) Do not reject the null hypothesis and conclude that there is evidence to support the claim that more than 1% of the DVDs are defective.
• B) Reject the null hypothesis and conclude that there is insufficient evidence to support the claim that more than 1% of the DVDs are defective.
• C) Do not reject the null hypothesis and conclude that there is insufficient evidence to support the claim that more than 1% of the DVDs are defective.
• D) Reject the null hypothesis and conclude that there is sufficient evidence to support the claim that more than 1% of the DVDs are defective.

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Definitions:

Panama

A country in Central America, located at the junction of North and South America, known for the Panama Canal which connects the Atlantic and Pacific Oceans.

Stagflation

An economic condition characterized by slow economic growth and high unemployment coupled with high inflation.

Economic Stagnation

A prolonged period of little or no growth in the economy, characterized by high unemployment, stagnant wages, and low levels of investment and consumer spending.

Unemployment

The condition of not having a job despite actively seeking work, often used as an economic indicator reflecting the health of an economy.