A Student Was Interested in the Cigarette Smoking Habits of College

question 14

Multiple Choice

A student was interested in the cigarette smoking habits of college students and collected data from an unbiased random sample of students. The data is summarized in the following table: Why is the table NOT a frequency table?

• A) The number of males does not equal the sum of males that smoke and do not smoke.
• B) The classes are not mutually exclusive.
• C) There are too many classes.
• D) Class limits cannot be computed

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Definitions:

Asymmetric Information

A scenario where one participant in a deal possesses greater or more advanced information than the other.

Adverse Selection

A situation where uneven information leads to transactions between parties where one party has more or better information than the other, often seen in insurance markets.

Occur

To happen or take place, referring to events or phenomena.

Adverse Selection

A situation in which one party in a transaction has more information than the other, often leading to an imbalance in which high-risk individuals are more likely to select and benefit from certain agreements, policies, or products.