Exhibit 11-2

question 38

Multiple Choice

Exhibit 11-2.The manager of a video library would like the variance of the waiting times of the customers not to exceed 2.30 minutes-squared.He would like to add an additional billing counter if the variance exceeds the cut-off.He checks the recent sample data.For a random sample of 24 customer waiting times,he arrives at a sample variance of 3.8 minutes-squared.The manager assumes the waiting times to be normally distributed. Refer to Exhibit 11-2.Approximate the p-value.

• A)p-value lies between 0.005 and 0.010
• B)p-value lies between 0.010 and 0.025
• C)p-value lies between 0.050 and 0.10
• D)p-value lies between 0.025 and 0.05

Identify how government interventions (e.g., taxes) can affect market outcomes in the presence of externalities.

Analyze the impact of transaction costs on the ability to achieve efficient solutions to externality problems.

Distinguish between the concepts of internalizing externalities and the role of property rights in this process.

Understand the relationship between marginal social benefit, marginal social cost, and the efficient quantity of pollution or externalities.

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Definitions:

Selling and Administrative Costs

Expenses related directly to the marketing and management of a company, excluding costs associated with the production or purchase of goods.

Markup Percentage

The percentage added to the cost of goods to cover overhead and profit.

Product Cost

The total cost associated with making or acquiring a product, including materials, labor, and overhead costs.

Variable Cost

Costs that change in proportion to the level of production or business activity.