The Following Data Are for a Series of Increasingly Extensive

question 109

Multiple Choice

The following data are for a series of increasingly extensive ?ood-control projects. $$\begin{array} { | l | c | c | } \hline & \text { Total Cost per Year } & \text { Total Benefit per Year } \\\hline \text { Plan } A = \text { Levees } & \$ 10,000 & \$ 16,000 \\\hline \text { Plan } B = \text { Small Reservoir } & 24,000 & 36,000 \\\hline \text { Plan } C = \text { Medium Reservoir } & 44,000 & 52,000 \\\hline \text { Plan } D = \text { Large Reservoir } & 72,000 & 64,000 \\\hline\end{array}$$ Plan C entails

• A) marginal bene?ts in excess of marginal costs.
• B) fewer spillovers than either Plan A or Plan B.
• C) an overallocation of resources to ?ood control.
• D) an underallocation of resources to ?ood control.

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Definitions:

Normality

A statistical condition where data is symmetrically distributed around the mean, following a bell-shaped curve known as the normal distribution.

Null Hypothesis

The default hypothesis that there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.

Directional Alternative

A hypothesis that outlines the anticipated direction in the variation or association among variables.

T-statistic

A T-statistic is used in statistical testing to determine the significance of the difference between the means of two groups relative to the spread or variability of their scores.