Use the Following Table to Answer the Question(s) Below

question 63

Multiple Choice

Use the following table to answer the question(s) below.

-A producer of contact lenses regularly takes samples of 100 lenses and inspects them for scratches. If a lens has a single scratch, it cannot be sold. The results of 10 samples are shown below: What is the average proportion defective?

• A) 0.012
• B) 0.014
• C) 0.020
• D) 0.028
• E) 0.035

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Definitions:

Consumer Surplus

The gap between the price consumers are prepared to pay for a product or service and the actual amount they spend on it.

Market Price

The market rate for buying or selling an asset or service in a public trading environment.

Producer Surplus

The gap between the minimum amount sellers are prepared to accept for a product or service and the actual payment they get.

Equilibrium

The point at which the quantity of a product or service demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.