An Energy Analyst Wants to Test If U

question 105

Multiple Choice

An energy analyst wants to test if U.S. oil production is random over time. The analyst has monthly production values for the two years. The analyst finds 12 months are above the median, 12 months are below the median, six runs are below the median, and five runs are above the median. To test the random-walk hypothesis about oil production, the competing hypothesis are ________.

• A) H₀: Oil production is not random; H_A: Oil production is random
• B) H₀: Oil production is random; H_A: Oil production increases over time
• C) H₀: Oil production is random; H_A: Oil production decreases over time
• D) H₀: Oil production is random; H_A: Oil production is not random

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Definitions:

Competitive Firm

A company that operates in a market with many sellers, where it has little to no control over the price of its product.

Perfectly Elastic

Perfectly Elastic describes a situation in which the quantity demanded or supplied responds infinitely or extremely sensitively to a change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at each price level.

Purely Competitive Industry

An industry with many sellers offering identical products, where no single seller can influence market price, leading to perfect competition.