You Are Experimenting with a New Process for Manufacturing High-Energy-Density

question 16

Multiple Choice

You are experimenting with a new process for manufacturing high-energy-density batteries. Your technical staff tell you that the process should only produce 25% defectives. However, the first three batteries produced by the process all turn out to be defective. What are the odds on this happening if your technical staff are telling the truth?

• A)1.6%
• B)8.3%
• C)12.5%
• D)18.6%
• E)22%

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Definitions:

Budget Line

A graphical representation that shows all possible combinations of two goods that an individual can afford given their income and the prices of the goods.

Consumer Income

The total money earned by consumers from all sources, including wages, salaries, investments, and benefits, which impacts their purchasing power.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand, production costs, and market competition.

Indifference Schedule

A graphical representation in economics showing different bundles of goods between which a consumer is indifferent.