TABLE 9-3 An Appliance Manufacturer Claims to Have Developed a Compact Microwave

question 110

Multiple Choice

TABLE 9-3
An appliance manufacturer claims to have developed a compact microwave oven that consumes a mean of no more than 250 W. From previous studies, it is believed that power consumption for microwave ovens is normally distributed with a population standard deviation of 15 W. A consumer group has decided to try to discover if the claim appears true. They take a sample of 20 microwave ovens and find that they consume a mean of 257.3 W.
-Referring to Table 9-3, the appropriate hypotheses to determine if the manufacturer's claim appears reasonable are

• A) H₀: μ = 250 versus H₁: μ ≠ 250.
• B) H₀: μ ≥ 250 versus H₁: μ < 250.
• C) H₀: μ ≤ 250 versus H₁: μ > 250.
• D) H₀: μ ≥ 257.3 versus H₁: μ < 257.3.

---

Definitions:

Government Failure

Occurs when government intervention in the economy causes more harm than good, leading to inefficiencies or unintended negative consequences.

Idealized Economic Efficiency

A theoretical state in which resources are allocated in the most effective way possible, maximizing productivity while minimizing waste and inefficiencies.

Externality

A consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices.

Uncompensated Benefits

Benefits that occur from an economic transaction that affect individuals not directly involved in the transaction, not compensated by the market.