Test Hypotheses About a Population Proportion
-A Shipping Firm Suspects $1,000,000$

question 64

Short Answer

Test Hypotheses about a Population Proportion
-A shipping firm suspects that the variance for a certain brand of tire used by its trucks is greater than $1,000,000$ . To check the claim, the firm puts 101 of these tires on its trucks and gets a standard deviation of 1200 miles. At $\alpha = 0.05$ , test the shipping firm's claim.

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Definitions:

Risk Loving

A financial term describing an individual or entity's preference for taking risks, where the potential for higher gains outweighs the possibility of losses.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Expected Utility Maximizer

An economic theory that assumes individuals choose among risky alternatives in such a way as to maximize their expected utility.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.