The Average Hourly Wage of Employees of a Certain Company

question 68

Multiple Choice

The average hourly wage of employees of a certain company is $11.15. Assume the variable is
Normally distributed. If the standard deviation is $4.89, find the probability that a randomly selected
Employee earns less than $7.97.

• A)0.362 = 36.2%
• B)0.258 = 25.8%
• C)0.271 = 27.1%
• D)0.239 = 23.9%

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Definitions:

Profit Functions

Mathematical functions that represent a firm’s profits, typically as a function of price and quantity.

Pigouvian Tax

A tax imposed on any market activity that generates negative externalities (costs not reflected in the market price) with the aim of correcting the market outcome.

Cost Function

A mathematical relation that describes how production costs change with variations in the level of output.

Competitive Price

A pricing strategy that aims to attract customers by setting product prices similar or lower than rivals in the market.