A Quality Control Officer Tests Bottles of Shampoo to See

question 37

Multiple Choice

A quality control officer tests bottles of shampoo to see if the filling machines are putting the proper amount in each bottle. After testing a sample of bottles, the quality control officer decides to leave the filling machines operating. However, the filling machines are not operating properly. Which type of error, if any, did the quality control officer commit?

• A) This is a Type I error.
• B) This is a Type II error.
• C) This is a correct decision.
• D) This is an incorrect decision.

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Definitions:

AVC

Average Variable Cost, which refers to the total variable cost per unit of output in a business, where variable costs change with the level of production.

MC

Marginal Cost, the cost of producing one additional unit of a product or service.

ATC

Average Total Cost; the total cost of production divided by the number of units produced, representing the per-unit production cost.

Average Fixed Costs

Costs that do not vary with the level of output and are averaged over the total number of units produced.