The Manufacturer of an Over-The-Counter Heartburn Relief Mediation Claims That

question 71

Essay

The manufacturer of an over-the-counter heartburn relief mediation claims that its product brings relief in less than 3.5 minutes,on average.To be able to make this claim,the manufacturer was required by the FDA to present statistical evidence in support of the claim.The manufacturer reported that for a sample of 50 heartburn sufferers,the mean time to relief was 3.3 minutes and the population standard deviation was 1.1 minutes.Calculate the appropriate test statistic to test the hypotheses.

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Definitions:

Substitution Effect

The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods.

Income Effect

The alteration in the consumption habits of a person or an economy due to a variation in actual income.

Inferior Good

A type of good for which demand decreases when income increases, and vice versa, unlike normal goods where demand increases with an increase in income.

Marginal Utility

The additional enjoyment or value that comes from the consumption of one more unit of a product or service.