TABLE 12-11 The Director of Admissions at a State College Is Interested

question 141

True/False

TABLE 12-11
The director of admissions at a state college is interested in seeing if admissions status (admitted, waiting list, denied admission) at his college is independent of the type of community in which an applicant resides. He takes a sample of recent admissions decisions and forms the following table:

He will use this table to do a chi-square test of independence with a level of significance of 0.01.
-Referring to Table 12-11, the same decision would be made with this test if the level of significance had been 0.005.

---

Definitions:

Profit-Maximizing Output

The quantity of output at which a firm achieves the maximum possible profit, determined where marginal revenue equals marginal cost.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, no barriers to entry or exit, and the firm sells a homogeneous product.

MR

The extra revenue that a firm gains when it sells an additional unit of output, essentially another term for marginal revenue.