A Major Airline Is Concerned That the Waiting Time for Customers

question 56

Multiple Choice

A major airline is concerned that the waiting time for customers at its ticket counter may be exceeding its target average of 190 seconds. To test this, the company has selected a random sample of 100 customers and times them from when the customer first arrives at the checkout line until he or she is at the counter being served by the ticket agent. The mean time for this sample was 202 seconds with a standard deviation of 28 seconds. Given this information and the desire to conduct the test using an alpha level of 0.02, which of the following statements is true?

• A) The chance of a Type II error is 1 - 0.02 = 0.98.
• B) The test to be conducted will be structured as a two-tailed test.
• C) The test statistic will be approximately t = 4.286, so the null hypothesis should be rejected.
• D) The sample data indicate that the difference between the sample mean and the hypothesized population mean should be attributed only to sampling error.

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Definitions:

Monopolistically Competitive

A market structure featuring many firms selling products that are similar but not identical, allowing for some degree of market power and price setting.

Long Run

A period in economics during which all factors of production and costs are variable, allowing firms to adjust all inputs.

Deli

A short form for delicatessen, which is a store or counter specializing in prepared foods, sandwiches, and specialty groceries.

Zero Economic Profits

A condition in perfect competition where firms earn just enough revenue to cover their total costs, leading to no supernormal profit in the long term.