Explain the Role of Area in the Normal Density Function $\mu = 610$

question 63

Short Answer

Explain the Role of Area in the Normal Density Function
-The analytic scores on a standardized aptitude test are known to be normally distributed with mean $\mu = 610$ and standard deviation $\sigma = 115$ .
(a) Draw a normal curve with the parameters labeled.
(b) Shade the region that represents the proportion of test takers who scored less than 725 .
(c) Suppose the area under the normal curve to the left of $X = 725$ is $0.8413$ . Provide two interpretations of this result.

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Definitions:

Implicit Costs

Costs that represent the value of resources used in production for which no direct payment is made.

Explicit Costs

Direct, out-of-pocket payments a firm makes to purchase the inputs it needs for production, such as wages, rent, and materials.

Calendar Time

The concept of time as measured by calendar units, such as days, months, and years, used in planning and scheduling.

Long Run

An economic phase where all elements of production and expenses can fluctuate, enabling complete adaptation to any alterations.