Q1) Miramar Company is going to introduce one of 3 new products: a widget, a hummer, or a nimnot. Market conditions (favourable, stable, or unfavourable) will find out profit or loss the company realizes, as listed in following payoff table:
|
|
Market Conditions
|
|
|
Favorable
|
Stable
|
Unfavorable
|
|
Product
|
.2
|
.7
|
.1
|
|
Widget
|
$120,000
|
$70,000
|
$-30,000
|
|
Hummer
|
60,000
|
40,000
|
20,000
|
|
Nimnot
|
35,000
|
30,000
|
30,000
|
i) Calculate expected value for each decision and choose the best one.
ii) Find out how much firm would be eager to pay to a market research firm to gain better information about future market conditions
Q2) Test statistic for this hypothesis test must be:
a) t = 1.95
b) z = 1.95
c) t = 1.38
d) z = 1.38
Q3) Determine the critical value if alpha = 0.05?
a) z.05 = 1.645
b) z.05 = 1.960
c) t.05 = 6.314
d) t.05 = 12.706