Replacement Times for TV Sets Are Normally Distributed with a Mean

question 18

Multiple Choice

Replacement times for TV sets are normally distributed with a mean of 8.2 years and a standard deviation of 1.1 years, (based on data from "Getting Things Fixed, "Consumer Reports) . (i) If you want to provide a warranty so that only 3% of the TV sets will be replaced before the warranty expires, the length of warranty you would recommend would be 6.13 years.
(ii. The probability that a randomly selected TV will be replaced after more than 10.0 years is 0.0505.

• A) (i) and (ii) are correct statements.
• B) (i) is a correct statement but not (ii).
• C) (ii) is a correct statement but not (i).
• D) (i) and (ii) are false statements.

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Definitions:

Demand Curve

A graph showing how the quantity demanded of a commodity changes as its price varies.

Demand Curve

A graphical representation depicting the relationship between the price of a good or service and the quantity demanded by consumers.

Demand

The amount of a product or service that buyers are ready and capable of buying at different price levels over a specified time frame.

Increase

A situation where there is a growth or rise in figures, amounts, or indicators in an economic context.