Professors of Accountancy Are in High Demand at American Universities

question 39

Multiple Choice

Professors of accountancy are in high demand at American universities. A random sample of 28 new accounting professors found the average salary was $135 thousand with a standard deviation of $16 thousand. Assume the distribution is normally distributed. Construct a 95% confidence interval for the salary of new accounting professors. Answers are in thousands of dollars.

• A) [102.1680, 167.832]
• B) [127.8247, 142.1753]
• C) [128.7958, 141.2042]
• D) [129.0735, 140.9265]

---

Definitions:

Returns to Scale

The rate at which production output increases in response to proportional increases in all inputs.

Average Cost

The average cost is the total cost of production divided by the number of units produced, reflecting the cost per unit of output.

Marginal Cost

The supplementary expenditure required to produce an extra unit of a product or service.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.