Question

1. You are considering buying a store. In order to better access your return on the investment, you must ask the storeowner for the figures on days when

   	a.	​Sales are high, costs are low
   	b.	​Sales are low, costs are high
   	c.	​Both sales and costs are high
   	d.	​All of the above

QUESTION 2

1. ​ At a carnival roulette wheel, a player can either win $10, $30, or $80. At what cost of play should the player expect the wheel to be fair?

   	a.	​$30
   	b.	​$10
   	c.	​$40
   	d.	​$20

QUESTION 3

1. ​ Four possibilities have probabilities 0.4, 0.2, 0.2 and 0.2 and values $20, $20, $40, and $40 respectively. The expected value is:

   	a.	​$28
   	b.	​$26
   	c.	​$24
   	d.	​$22

  

QUESTION 4

1. ​ We worry that false negatives occur too often relative to false positives due to

   	a.	​Managers having an incentive to make a false negative conclusion because they are harder for superiors to observe
   	b.	​They are not too common
   	c.	​It being appropriate to set a high standard for acceptance of a hypothesis
   	d.	​Most hypotheses being false

QUESTION 5

1. ​ Four possibilities are equally likely and have payoffs of $2, $4, $6, and $8. The expected value is:

   	a.	​$5
   	b.	​$7
   	c.	​$8
   	d.	​$6

Answer 1

1) Option"D" is correct i.e All of the above

To better excess of return, we need all the possible ways i.e we have to check in which day sales are high and low cost, the cost is high and sales are low both high and both low, this gives us an idea about how that how much return we generate if we put that amount of investment

2)Option"C" is correct i.e 40

expected value = sum of all the wins/no. of times

= 10+30+80 / 3

= 120/3

= 40

3) Option"A" is correct i.e 28

here we use exptected value with probabolity given per value

so Expected value = P₁X₁ +P₂X₂ +P₃X₃+P₄X₄

= 0.4*20+0.2*20+0.2*40+0.2*40

= 8+4+8+8

= 28

4) Option"C " is correct i.e ​It being appropriate to set a high standard for acceptance of a hypothesis

two categories of errors in statistical analysis that lengths of different fields including that of economics, are Positively false or negatively false. A Positively false is when we don't attribute a value to a variable that doesn't really have it. A negatively false meanwhile is when we falsely attribute some value to a variable that does not really have that attribute.

5) Option"A" is correct i.e 5

expected value = sum of all the wins/no. of times

= 2+4+6+8 / 4

= 20/4

= 5