A Restaurant That Bills Its House Account Monthly Is Concerned

question 8

Multiple Choice

A restaurant that bills its house account monthly is concerned that the average monthly bill exceeds $200 per account. A random sample of twelve accounts is selected, resulting in a sample mean of $220 and a standard deviation of $12. The t-test is to be conducted at the 5% level of significance.

• A) The critical value of t is +1.796. The calculated value of t is +5.77.
• B) The critical value of t is -1.796. The calculated value of t is -5.77.
• C) The critical value of t is +2.201. The calculated value of t is +5.77.
• D) The critical value of t is +2.201. The calculated value of t is +1.40.
• E) The critical value of t is +2.201. The calculated value of t is -5.77.

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Definitions:

Utility

In economics, a measure of satisfaction or happiness that consumers derive from consuming goods and services.

Von Neumann-Morgenstern

A theory designed to understand the utility of outcomes in strategic games, emphasizing the mathematical expected utility.

Expected Utility

A theory in economics that calculates the utility of an outcome based on its probability and the utility of the outcomes.

Income

The monetary payment received for goods or services, or profit from investments, typically calculated on a regular basis like annually or monthly.