Ophelia O'Brien, VP of Consumer Credit of Credit First Banks

question 6

Multiple Choice

Ophelia O'Brien, VP of Consumer Credit of Credit First Banks (CFB) , monitors the default rate on personal loans at the CFB member banks. One of her standards is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 30 defaulted loans. Ophelia's null hypothesis is ___.

• A) π > 0.05
• B) π = 0.05
• C) n = 30
• D) n = 500
• E) n = 0.05

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Definitions:

Producer Values

The set of ethical principles and standards that guide the behavior and practices of producers or manufacturers.

Buyer Surplus

Buyer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual amount paid.

Producer Surplus

The difference between the amount producers are willing to supply a good for and the actual amount they receive (or market price).

Minimum Price

The lowest possible price at which a product or service can be sold, often regulated by governments to protect producers or consumers.