THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 343

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The production manager at a local manufacturing plant is concerned about work stoppages in the four production lines.In particular,the manager is evaluating the likelihood of the next stoppage occurring on production line 1.
-Based on previous stoppage records,the manager figures that the probability that production line 1 is stopped next is 25%.This is an example of:

• A)subjective probability.
• B)classical probability.
• C)relative frequency probability.
• D)Bayesian probability.

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Definitions:

Deadweight Loss

The decrease in economic performance that happens when a good or service fails to meet or cannot attain its optimal distribution point.

Marginal Cost

The cost of producing one additional unit of a good or service, considering all variable resources used in production.

Monopolistic Competition

A type of imperfect competition such that many producers sell products that are differentiated from one another (e.g., by branding or quality) and hence are not perfect substitutes.

Irrational Consumers

Refers to the idea that consumers often make decisions that deviate from the assumptions of rationality in economics, such as making impulsive or emotionally driven purchases.