Dell Computers Receives Large Shipments of Microprocessors from Intel Corp

question 11

Multiple Choice

Dell Computers receives large shipments of microprocessors from Intel Corp. It must try to ensure the proportion of microprocessors that are defective is small. Suppose Dell decides to test five microprocessors out of a shipment of thousands of these microprocessors. Suppose that if at least one of the microprocessors is defective, the shipment is returned. If Intel and Dell agree that Intel will not provide more than 5% defective chips, calculate the probability that the entire shipment will be returned even though only 5% are defective.

• A) 0.2262
• B) 0.3478
• C) 0.4564
• D) 0.1812

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Definitions:

Marginal Costs

The advance in complete cost due to the manufacturing of one additional unit of a good or service.

Cournot Duopolists

Firms in a duopoly market structure that base their competition strategies on the quantity of output, assuming the reaction of the other firm to find an equilibrium.

Demand for Wine

The desire and willingness of consumers to purchase wine at various prices, influenced by factors such as income, tastes, and substitutes.

Imports

Goods or services brought into one country from another for sale.