A National Manufacturer of Ball Bearings Is Experimenting with Two

question 71

Multiple Choice

A national manufacturer of ball bearings is experimenting with two different processes for producing precision ball bearings. It is important that the diameters be as close as possible to an industry standard. The output from each process is sampled and the average error from the industry standard is calculated. The results are presented below: The researcher is interested in determining whether there is evidence that the two processes yield different average errors.
What is the decision at the 1% level of significance?

• A) Reject the null hypothesis and conclude the means are different.
• B) Reject the null hypothesis and conclude the means are the same.
• C) Fail to reject the null hypothesis and conclude the means are the same.
• D) Fail to reject the null hypothesis and conclude the means are different.

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Definitions:

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences, maximizing overall social welfare.

Economically Inefficient

A condition where resources are not utilized in the best possible manner, leading to potential waste or losses in terms of welfare or output.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.

Marginal Cost

Refers to the increase in total production costs resulting from the production of one additional unit of a good or service.