Why Is the Central Limit Theorem So Important to the Study

question 32

Multiple Choice

Why is the Central Limit Theorem so important to the study of sampling distributions?

• A) It allows us to disregard the size of the sample selected when the population is not normal.
• B) It allows us to disregard the shape of the population when n is large.
• C) It allows us to disregard the shape of the sampling distribution when the size of the population is large.
• D) It allows us to disregard the size of the population we are sampling from.

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Definitions:

Utility Function

A numerical model that explains how a consumer gains pleasure or usefulness from using goods and services.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility level constant.

Income Effect

The alteration in the income of a person or the economy, and its effect on the amount of a product or service that is requested.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, causing consumers to substitute away from more expensive goods towards cheaper ones.