The Manager of a Local Specialty Store Is Concerned with a Possible

question 168

Multiple Choice

The manager of a local specialty store is concerned with a possible slowdown in payments by her customers. She measures the rate of payment in terms of the average number of days receivables are outstanding. Generally, the store has maintained an average of 50 days with a standard deviation of 10 days. A random sample of 25 accounts gives an average of 54 days outstanding with a standard deviation of 8 days. Assume the number of days is approximately normally distributed.
-How would you define the rejection region for this test at ? = .01?

• A)t > 1.711
• B)t > 2.33
• C)t > 2.492
• D)t > 3.646 and t < -3.646
• E)t > 2.728 and t < -2.728

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Definitions:

Average Total Cost

The total cost divided by the quantity of output produced; it is the sum of average fixed costs and average variable costs.

Marginal Cost

The extra cost incurred when one more unit of a product or service is produced.

Profit

The financial gain made in a transaction, calculated as the difference between the revenue earned and the costs incurred.

Drug Patent

Legal protection granted to the inventor of a new pharmaceutical, allowing exclusive rights to manufacture and sell the drug for a certain period.