In a Local Community There Are Three Grocery Chain Stores

question 122

Multiple Choice

In a local community there are three grocery chain stores. The three have been carrying out a spirited advertising campaign in which each claims to have the lowest prices. A local news station recently sent a reporter to the three stores to check prices on several items. She found that for certain items each store had the lowest price. This survey didn't really answer the question for consumers. Thus, the station set up a test in which 20 shoppers were given different lists of grocery items and were sent to each of the three chain stores. The sales receipts from each of the three stores are recorded in the data file Groceries. Based on a significance level of 0.05 and these sample data, test to determine whether blocking was necessary in this example. Use a test-statistic approach.

• A) Since 952.6155 > 1.8673 do not reject H0 and conclude that there is an indication that blocking was not effective.
• B) Since 952.6155 > 1.8673 reject H0 and conclude that there is an indication that blocking was effective.
• C) Since 102.2912 > 1.8673 do not reject H0 and conclude that there is an indication that blocking was not effective.
• D) Since 102.2912 > 1.8673 reject H0 and conclude that there is an indication that blocking was effective.

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Definitions:

Aggregate Demand

Aggregate demand is the total demand for all goods and services within an economy at a given overall price level and within a given time period.

Aggregate Supply

The sum total of products and services that corporate entities in an economic environment plan to market over a fixed period.

Expected Price Level

The anticipated average price of goods and services in the economy over a future period.

Short-Run Aggregate Supply Curve

It depicts the relationship between the price level and the quantity of goods and services that firms are willing and able to produce in the short run, while some production costs are fixed.