In August 2010, Massachusetts Enacted a 150-Day Right-To-Cure Period That

question 112

Multiple Choice

In August 2010, Massachusetts enacted a 150-day right-to-cure period that mandates that lenders give homeowners who fall behind on their mortgage an extra five months to become current before beginning foreclosure proceedings. Policymakers claimed that the policy would result in a higher proportion of delinquent borrowers becoming current on their mortgages. To test this claim, researchers took a sample of 244 homeowners in danger of foreclosure in the time period surrounding the enactment of this law. Of the 100 who fell behind just before the law was enacted, 30 were able to avoid foreclosure, and of 144 who fell behind just after the law was enacted, 48 were able to avoid foreclosure. Let p₁ and p₂ represent the proportion of delinquent borrowers who avoid foreclosure just before and just after the right-to-cure law is enacted, respectively. Which of the following is the correct competing hypotheses that will test the policymakers' claim?

• A) H 0 : p 1 - p 2 ≤ 0, H A : p 1 - p 2 > 0
• B) H 0 : p 1 - p 2 ≥ 0, H A : p 1 - p 2 < 0
• C) H 0 : p 1 - p 2 = 0, H A : p 1 - p 2 ≠ 0
• D) H 0 : p 1 - p 2 > 0, H A : p 1 - p 2 ≤ 0

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Definitions:

Marginal Costs

The change in total cost that arises from producing one additional unit of a product or service.

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for the business.

Fixed Costs

Expenses that do not change with the level of goods or services produced within a certain range.

Technology B

This term is too generic to define without more context, as it could refer to any second or alternative technology in a specific domain or comparison.