Compute the Mean and Standard Deviation of a Binomial Random

question 145

Multiple Choice

Compute the Mean and Standard Deviation of a Binomial Random Variable
-A psychic network received telephone calls last year from over 1.5 million people. A recent article attempts to shed some light onto the credibility of the psychic network. One of the psychic network s psychics agreed to take part in the following experiment. Five different cards are shuffled, and one is chosen at random. The psychic will then try to identify which card was drawn without seeing it. Assume that the experiment was repeated 40 times and that the results of any two experiments are independent of one another. If we assume that the psychic is a fake (i.e., they are merely guessing at the cards and have no psychic powers) , how many of the 40 cards do we expect the psychic to guess correctly

• A) 8
• B) 7
• C) 0
• D) 5

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Definitions:

AVC

Average Variable Cost, the cost of labor or material that changes with the level of output or production.

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, representing the per unit cost of production.

Diminishing Returns

A rule which posits that when investment in a specific sector grows, the profit rate from that investment will not continue to rise past a certain threshold if all other factors are kept unchanged.

AVC

Average Variable Cost is the total variable cost per unit of output.