An Energy Analyst Wants to Test If U

question 40

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. Using the p-value approach and α = 0.01, the appropriate conclusion is ________.

• A) do not reject the null hypothesis; we can conclude oil production is not random
• B) reject the null hypothesis; we can conclude oil production is not random
• C) reject the null hypothesis; we cannot conclude oil production is not random
• D) do not reject the null hypothesis; we cannot conclude oil production is not random

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Definitions:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and production technology.

Efficient Allocation

The optimal distribution of resources among competing uses to maximize output or welfare.

Ppf (Production Possibility Frontier)

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology, when resources are fully and efficiently utilized.

Efficiently

Achieving maximum productivity with minimum wasted effort or expense.