A company attempts to evaluate the potential for a new bonus plan by selecting a
ID: 1142073 • Letter: A
Question
A company attempts to evaluate the potential for a new bonus plan by selecting a sample of 4 salespersons to use the bonus plan for a trial period. The weekly sales volume before and after implementing the bonus plan is shown below.
Salesperson
Before
After
1
49
44
2
48
40
3
38
36
4
44
50
Using = .05, we are testing to see if the bonus plan will result in an increase in the mean weekly sales. The test statistic is:
0.578
0.627
0.710
0.468
0.778
Salesperson
Before
After
1
49
44
2
48
40
3
38
36
4
44
50
Explanation / Answer
an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. That is, the consumer has no preference for one combination or bundle of goods over a different combination on the same curve. One can also refer to each point on the indifference curve as rendering the same level of utility (satisfaction) for the consumer. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer. Utility is then a device to represent preferences rather than something from which preferences come.[1] The main use of indifference curves is in the representation of potentially observable demand patterns for individual consumers over commodity bundles.[2]
There are infinitely many indifference curves: one passes through each combination. A collection of (selected) indifference curves, illustrated graphically, is referred to as an indifference map.
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