MCQ Stats

CHAPTER 1: INTRODUCTION AND DATA
COLLECTION
CHAPTER 2: PRESENTING DATA IN TABLES AND
CHARTS
CHAPTER 3: NUMERICAL DESCRIPTIVE MEASURES
CHAPTER 4: BASIC PROBABILITY
CHAPTER 5: SOME IMPORTANT DISCRETE
PROBABILITY DISTRIBUTIONS
CHAPTER 6: THE NORMAL DISTRIBUTION AND
OTHER CONTINUOUS DISTRIBUTIONS
CHAPTER 7: SAMPLING DISTRIBUTIONS
CHAPTER 8: CONFIDENCE INTERVAL ESTIMATION
CHAPTER 9: FUNDAMENTALS OF HYPOTHESIS
TESTING: ONE-SAMPLE TESTS
CHAPTER 10: TWO-SAMPLE TESTS
WITH NUMERICAL DATA
CHAPTER 11: ANALYSIS OF VARIANCE
CHAPTER 12: TESTS FOR TWO OR MORE SAMPLES
WITH CATEGORICAL DATA
CHAPTER 13: SIMPLE LINEAR REGRESSION
CHAPTER 14: INTRODUCTION TO MULTIPLE
REGRESSION
CHAPTER 15: MULTIPLE REGRESSION
MODEL BUILDING
CHAPTER 16: TIME-SERIES FORECASTING AND
INDEX NUMBERS
Introduction and Data Collection 1

CHAPTER 1: INTRODUCTION AND DATA COLLECTION

1. The process of using sample statistics to draw conclusions about true population parameters is called
a) statistical inference.
b) the scientific method.
c) sampling.
d) descriptive statistics.

ANSWER:
a
TYPE: MC DIFFICULTY: Easy
KEYWORDS: inferential statistics

2. Those methods involving the collection, presentation, and characterization of a set of data in order to properly
describe the various features of that set of data are called
a) statistical inference.
b) the scientific method.
c) sampling.
d) descriptive statistics.

ANSWER:
d
KEYWORDS: descriptive statistics

3. The collection and summarization of the socioeconomic and physical characteristics of the employees of a
particular firm is an example of
a) inferential statistics.
b) descriptive statistics.
c) a parameter.
d) a statistic.

ANSWER:
b

4. The estimation of the population average family expenditure on food based on the sample average expenditure
of 1,000 families is an example of
a) inferential statistics.
b) descriptive statistics.
c) a parameter.
d) a statistic.

ANSWER:
a

5. The universe or "totality of items or things" under consideration is called
a) a sample.
b) a population.
c) a parameter.
d) a statistic.

2 Introduction and Data Collection

ANSWER:
b
KEYWORDS: population

6. The portion of the universe that has been selected for analysis is called
a) a sample.
b) a frame.
c) a parameter.
d) a statistic.

ANSWER:
a
KEYWORDS: sample

7. A summary measure that is computed to describe a characteristic from only a sample of the population is called
a) a parameter.
b) a census.
c) a statistic.
d) the scientific method.

ANSWER:
c
KEYWORDS: statistic

8. A summary measure that is computed to describe a characteristic of an entire population is called
a) a parameter.
b) a census.
c) a statistic.
d) the scientific method.

ANSWER:
a
KEYWORDS: parameter


9. Which of the following is most likely a population as opposed to a sample?
a) respondents to a newspaper survey
b) the first 5 students completing an assignment
c) every third person to arrive at the bank
d) registered voters in a county

ANSWER:
d
TYPE: MC DIFFICULTY: Moderate
KEYWORDS: population, sample

10. Which of the following is most likely a parameter as opposed to a statistic?
a) the average score of the first five students completing an assignment
b) the proportion of females registered to vote in a county
c) the average height of people randomly selected from a database
d) the proportion of trucks stopped yesterday that were cited for bad brakes

ANSWER:
b
KEYWORDS: parameter, statistic

11. Which of the following is not an element of descriptive statistical problems?
a) an inference made about the population based on the sample
b) the population or sample of interest
c) tables, graphs, or numerical summary tools
d) identification of patterns in the data

ANSWER:
a

12. Which of the following is NOT a reason for the need for sampling?
a) It is usually too costly to study the whole population.
b) It is usually too time consuming to look at the whole population.
c) It is sometimes destructive to observe the entire population.
d) It is always more informative to investigate a sample than the entire population.

ANSWER:
d
KEYWORDS: reasons for sampling


13. Which of the following is NOT a reason for drawing a sample?
a) A sample is less time consuming than a census.
b) A sample is less costly to administer than a census.
c) A sample is usually not a good representation of the target population.
d) A sample is less cumbersome and more practical to administer.

ANSWER:
c
KEYWORDS: reasons for sampling

14. A study is under way in Yosemite National Forest to determine the adult height of American pine trees.
Specifically, the study is attempting to determine what factors aid a tree in reaching heights greater than 60 feet
tall. It is estimated that the forest contains 25,000 adult American pines. The study involves collecting heights
from 250 randomly selected adult American pine trees and analyzing the results. Identify the population from
which the study was sampled.
a) the 250 randomly selected adult American pine trees
b) the 25,000 adult American pine trees in the forest
c) all the adult American pine trees taller than 60 feet
d) all American pine trees, of any age, in the forest

ANSWER:
b

from 250 randomly selected adult American pine trees and analyzing the results. Identify the variable of interest
in the study.
a) the age of an American pine tree in Yosemite National Forest
b) the height of an American pine tree in Yosemite National Forest
c) the number of American pine trees in Yosemite National Forest
d) the species of trees in Yosemite National Forest

ANSWER:
b
KEYWORDS: data, sampling


from 250 randomly selected adult American pine trees and analyzing the results. Identify the sample in the
study.
a) the 250 randomly selected adult American pine trees
b) the 25,000 adult American pine trees in the forest
c) all the adult American pine trees taller than 60 feet
d) all American pine trees, of any age, in the forest

ANSWER:
a

17. Most analysts focus on the cost of tuition as the way to measure the cost of a college education. But incidentals,
such as textbook costs, are rarely considered. A researcher at Drummand University wishes to estimate the
textbook costs of first-year students at Drummand. To do so, she monitored the textbook costs of 250 first-year
students and found that their average textbook costs were $300 per semester. Identify the population of interest
to the researcher.
a) all Drummand University students
b) all college students
c) all first-year Drummand University students
d) the 250 students that were monitored

ANSWER:
c

students and found that their average textbook costs were $300 per semester. Identify the variable of interest to
the researcher.
a) the textbook costs of first-year Drummand University students
b) the year in school of Drummand University students
c) the age of Drummand University students
d) the cost of incidental expenses of Drummand University students

ANSWER:
a


students and found that their average textbook costs were $300 per semester. Identify the sample in the study.
a) all Drummand University students
c) all first-year Drummand University students
d) the 250 students that were monitored

ANSWER:
d

20. Researchers suspect that the average number of units earned per semester by college students is rising. A
researcher at Calendula College wishes to estimate the number of units earned by students during the spring
semester at Calendula. To do so, he randomly selects 100 student transcripts and records the number of units
each student earned in the spring term. He found that the average number of semester units completed was
12.96 units per student. Identify the population of interest to the researcher.
a) all Calendula College students
c) all Calendula College students enrolled in the spring
d) all college students enrolled in the spring

ANSWER:
c

21. The average number of units earned per semester by college students is suspected to be rising. A researcher at
Calendula College wishes to estimate the number of units earned by students during the spring semester at
Calendula. To do so, he randomly selects 100 student transcripts and records the number of units each student
earned in the spring term. Identify the variable of interest to the researcher.
a) the number of students enrolled at Calendula College during the spring term
b) the average indebtedness of Calendula College students enrolled in the spring
c) the age of Calendula College students enrolled in the spring
d) the number of units earned by Calendula College students during the spring term

ANSWER:
d


22. Jared was working on a project to look at global warming and accessed an Internet site where he captured
average global surface temperatures from 1866. Which of the four methods of data collection was he using?
a) published sources
b) experimentation
c) surveying
d) observation

ANSWER:
a
KEYWORDS: sources of data

23. The British Airways Internet site provides a questionnaire that can be answered electronically. Which of the 4
methods of data collection is involved when people complete the questionnaire?
b) experimentation
c) surveying
d) observation

ANSWER:
c

24. A marketing research firm, in conducting a comparative taste test, provided three types of peanut butter to a
sample of households randomly selected within the state. Which of the 4 methods of data collection is involved
when people are asked to compare the three types of peanut butter?
b) experimentation
c) surveying
d) observation

ANSWER:
b


25. Tim was planning for a meeting with his boss to discuss a raise in his annual salary. In preparation, he wanted to
use the Consumer Price Index to determine the percentage increase in his salary in terms of real income over the
last three years. Which of the 4 methods of data collection was involved when he used the Consumer Price
Index?
b) experimentation
c) surveying
d) observation

ANSWER:
a

26. Which of the 4 methods of data collection is involved when a person records the use of the Los Angeles freeway
system?
b) experimentation
c) surveying
d) observation

ANSWER:
d
27. A statistics student found a reference in the campus library that contained the median family incomes for all 50
states. She would report her data as being collected using
a) a designed experiment.
b) observational data.
c) a random sample.
d) a published source.

ANSWER:
d

28. The personnel director at a large company studied the eating habits of the companys employees. The director
noted whether employees brought their own lunches to work, ate at the company cafeteria, or went out to lunch.
The goal of the study was to improve the food service at the company cafeteria. This type of data collection
would best be considered as
a) an observational study.
b) a designed experiment.
c) a random sample.
d) a quota sample.

ANSWER:
a

29. A study attempted to estimate the proportion of Florida residents who were willing to spend more tax dollars on
protecting the beaches from environmental disasters. Twenty-five hundred Florida residents were surveyed.
What type of data collection procedure was most likely used to collect the data for this study?
a) a designed experiment

b) a published source
c) a random sample
d) observational data

ANSWER:
c

30. Which of the following is a discrete quantitative variable?
a) the Dow Jones Industrial Average
b) the volume of water released from a dam
c) the distance you drove yesterday
d) the number of employees of an insurance company

ANSWER:
d
KEYWORDS: discrete random variable, types of data

31. Which of the following is a continuous quantitative variable?
a) the color of a students eyes
b) the number of employees of an insurance company
c) the amount of milk produced by a cow in one 24-hour period
d) the number of gallons of milk sold at the local grocery store yesterday

ANSWER:
c
KEYWORDS: continuous random variable, types of data

32. To monitor campus security, the campus police department is taking a survey of the number of students in a
parking lot during each 30 minutes of a 24-hour period, with the goal of determining when patrols of the lot
would serve the most students. If X is the number of students in the lot during each period of time, then X is an
example of
a) a categorical random variable.
b) a discrete random variable.
c) a continuous random variable.
d) a statistic.

ANSWER:
b

33. Researchers are concerned that the weight of the average American school child is increasing, implying, among
other things, that childrens clothing should be manufactured and marketed in larger sizes. If X is the weight of
school children sampled in a nationwide study, then X is an example of
d) a parameter.

ANSWER:
c


34. The classification of student class designation (freshman, sophomore, junior, senior) is an example of
d) a parameter.

ANSWER:
a
KEYWORDS: categorical random variable, types of data

35. The classification of student major (accounting, economics, management, marketing, other) is an example of
d) a parameter.

ANSWER:
a


36. The chancellor of a major university was concerned about alcohol abuse on her campus and wanted to find out
the portion of students at her university who visited campus bars on the weekend before the final exam week.
Her advisor took a random sample of 250 students. The total number of students in the sample who visited
campus bars on the weekend before the final exam week is an example of
d) a parameter.

ANSWER:
b

Her advisor took a random sample of 250 students and computed the portion of students in the sample who
visited campus bars on the weekend before the final exam. The portion of all students at her university who
visited campus bars on the weekend before the final exam week is an example of
d) a parameter.

ANSWER:
d
KEYWORDS: parameter, types of data

Her advisor took a random sample of 250 students. The portion of students in the sample who visited campus
bars on the weekend before the final exam week is an example of
c) a parameter.
d) a statistic.

ANSWER:
d
KEYWORDS: statistic, types of data


Her advisor took a random sample of 250 students. Whether or not a particular student in the sample visited
campus bars on the weekend before the final exam week is an example of
d) a parameter.

ANSWER:
a
TYPE: MC DIFFICULTY: Difficult

40. Which of the following sampling methods is a probability sample?
a) chunk
b) quota sample
c) stratified sample
d) judgment sample

ANSWER:
c
KEYWORDS: probability sample

41. A sample of 300 subscribers to a particular magazine is selected from a population frame of 9,000 subscribers.
If, upon examining the data, it is determined that no subscriber had been selected in the sample more than once,
a) the sample could not have been random.
b) the sample may have been selected without replacement or with replacement.
c) the sample had to have been selected with replacement.
d) the sample had to have been selected without replacement.

ANSWER:
b
KEYWORDS: sampling method


42. For a population frame containing N = 1,007 individuals, what code number should you assign to the first
person on the list in order to use a table of random numbers?
a) 0
b) 1
c) 01
d) 0001

ANSWER:
d
KEYWORDS: random number

43. Which of the following types of samples can you use if you want to make statistical inferences from a sample to
a population?
a) a judgment sample
b) a quota sample
c) a chunk
d) a probability sample

ANSWER:
d
KEYWORDS: probability sample, sampling method

44. The evening host of a dinner dance reached into a bowl, mixed all the tickets around, and selected the ticket to
award the grand door prize. What sampling method was used?
a) simple random sample
b) systematic sample
d) cluster sample

ANSWER:
a
KEYWORDS: simple random sample, probability sample, sampling method

45. The Dean of Students mailed a survey to a total of 400 students. The sample included 100 students randomly
selected from each of the freshman, sophomore, junior, and senior classes on campus last term. What sampling
method was used?
d) cluster sample

ANSWER:
c
KEYWORDS: stratified sample, probability sample, sampling method


46. A telemarketer set the companys computerized dialing system to contact every 25th person listed in the local
telephone directory. What sampling method was used?
d) cluster sample

ANSWER:
b
KEYWORDS: systematic sample, probability sample, sampling method

47. Since a _______ is not a randomly selected probability sample, there is no way to know how well it represents
the overall population.
b) quota sample
d) cluster sample

ANSWER:
b
KEYWORDS: quota sample, nonprobability sample, sampling method

48. A population frame for a survey contains a listing of 72,345 names. Using a table of random numbers, how
many digits will the code numbers for each member of your population contain?
a) 3
b) 4
c) 5
d) 6

ANSWER:
c

49. A population frame for a survey contains a listing of 6,179 names. Using a table of random numbers, which of
the following code numbers will appear on your list?
a) 06
b) 0694
c) 6946
d) 61790

ANSWER:
b


50. Which of the following can be reduced by proper interviewer training?
a) sampling error
b) measurement error
c) both of the above
d) none of the above

ANSWER:
b
KEYWORDS: measurement error, survey worthiness

TABLE 1-1

The manager of the customer service division of a major consumer electronics company is interested in determining
whether the customers who have purchased a videocassette recorder made by the company over the past 12 months
are satisfied with their products.

51. Referring to Table 1-1, the manager decides to ask a sample of customers who have bought a videocassette
recorder made by the company and filed a complaint over the past year to fill in a survey about whether they are
satisfied with the product. This method will most likely suffer from
a) non-response error.
b) measurement error.
c) coverage error.
d) non-probability sampling.

ANSWER:
c
KEYWORDS: coverage error, survey worthiness

52. Referring to Table 1-1, if there are 4 different brands of videocassette recorders made by the company, the best
sampling strategy would be to use
a) a simple random sample.
b) a stratified sample.
c) a cluster sample.
d) a systematic sample.

ANSWER:
b
KEYWORDS: stratified sample, probability sample, sampling method


53. Referring to Table 1-1, which of the following questions in the survey will NOT likely induce a measurement
error?
a) How many times have you illegally copied copyrighted sporting events?
b) What is your exact annual income?
c) How many times have you brought the videocassette recorder back for service?
d) How many times have you failed to set the time on the videocassette recorder?

ANSWER:
c
KEYWORDS: measurement error, survey worthiness

54. Referring to Table 1-1, the population of interest is
a) all the customers who have bought a videocassette recorder made by the company over the past 12
months.
b) all the customers who have bought a videocassette recorder made by the company and brought it in for
repair over the past 12 months.
c) all the customers who have used a videocassette recorder over the past 12 months.
d) all the customers who have ever bought a videocassette recorder made by the company.

ANSWER:
a

55. Referring to Table 1-1, if a customer survey questionnaire is included in all the videocassette recorders made
and sold by the company over the next 12 months, this method of collecting data will most likely suffer from
a) nonresponse error.
b) measurement error.
c) coverage error.
d) nonprobability sampling.

ANSWER:
a
KEYWORDS: nonresponse error, survey worthiness

56. Referring to Table 1-1, the possible responses to the question "How many videocassette recorders made by
other manufacturers have you used?" are values from a
a) discrete random variable.
b) continuous random variable.
c) categorical random variable.
d) parameter.

ANSWER:
a

57. Referring to Table 1-1, the possible responses to the question "Are you happy, indifferent, or unhappy with the
performance per dollar spent on the videocassette recorder?" are values from a
a) discrete numerical random variable.
b) continuous numerical random variable.
c) categorical random variable.
d) parameter.

ANSWER:
c

58. True or False: A population is the totality of items or things under consideration.

ANSWER:
True
TYPE: TF DIFFICULTY: Easy

59. True or False: A sample is the portion of the universe that is selected for analysis.

ANSWER:
True
KEYWORDS: sample

60. True or False: Problems may arise when statistically unsophisticated users who do not understand the
assumptions behind the statistical procedures or their limitations are misled by results obtained from computer
software.

ANSWER:
True
KEYWORDS: statistical package

61. True or False: As a population becomes large, it is usually better to obtain statistical information from the entire
population.

ANSWER:
False
KEYWORDS: population, sample, reasons for samplings

62. True or False: Managers need an understanding of statistics to be able to present and describe information
accurately, draw conclusions about large populations based on small samples, improve processes, and make
reliable forecasts.

ANSWER:
True
KEYWORDS: reasons for learning statistics

63. True or False: The possible responses to the question How long have you been living at your current
residence? are values from a continuous variable.

ANSWER:
True
TYPE: TF DIFFICULTY: Moderate


64. True or False: The possible responses to the question How many times in the past three months have you
visited a city park? are values from a discrete variable.

ANSWER:
True

65. True or False: In a simple random sample, each individual has the same chance of selection on every draw.

ANSWER:
True
KEYWORDS: simple random sample, probability sample, sampling method

66. True or False: When dealing with human surveys, we are usually interested in sampling with replacement.

ANSWER:
False
KEYWORDS: sampling with replacement, sampling method, survey worthiness

67. True or False: A continuous variable may take on any value within its relevant range even though the
measurement device may not be precise enough to record it.

ANSWER:
True


68. True or False: The only reliable way a researcher can make statistical inferences from a sample to a population
is to use nonprobability sampling methods.

ANSWER:
False
KEYWORDS: nonprobability, probability sample, sampling method

69. True or False: Faculty rank (professor to lecturer) is an example of discrete numerical data.

ANSWER:
False

70. True or False: Student grades (A to F) are an example of continuous numerical data.

ANSWER:
False
KEYWORDS: categorical random variables, types of data

71. True or False: The amount of coffee consumed by an individual in a day is an example of a discrete numerical
variable.

ANSWER:
False
KEYWORDS: continuous random variables, types of data

72. True or False: A statistic is usually used to provide an estimate for a usually unobserved parameter.

ANSWER:
True
KEYWORDS: statistic, parameter, inferential statistics

73. True or False: A sample is always a good representation of the target population.

ANSWER:
False
KEYWORDS: sample, population, sampling method

74. True or False: A statistic is usually unobservable, while a parameter is usually observable.

ANSWER:
False
KEYWORDS: statistic, parameter, inferential statistic

75. True or False: There can be only one sample drawn from a population.

ANSWER:
False

KEYWORDS: sample, sampling method

76. True or False: Using different frames to generate data can lead to totally different conclusions.

ANSWER:
True
TYPE:TF DIFFICULTY: Easy
KEYWORDS: frame, sampling method

77. True or False: Sampling error can be completely eliminated by taking larger sample sizes.

ANSWER:
False
TYPE: TF DIFFICULTY: Difficult
KEYWORDS: sampling error

78. True or False: Sampling error can be reduced by taking larger sample sizes.

ANSWER:
True

79. True or False: The answer to the question What is your favorite color? is an example of an ordinal scaled
variable.

ANSWER:
False
KEYWORDS: nominal scale

80. True or False: The answer to the question How do you rate the quality of your business statistics course? is an
example of an ordinal scaled variable.

ANSWER:
True
KEYWORDS: ordinal scale


81. True or False: The answer to the question How many hours on average do you spend watching TV every
week? is an example of a ratio scaled variable.

ANSWER:
True
KEYWORDS: ratio scale

82. True or False: The answer to the question What is your sleeping bag temperature rating? is an example of a
ratio scaled variable.

ANSWER:
False
KEYWORDS: interval scale

83. True or False: Chuck sample is a type of probability sample.

ANSWER:
False
KEYWORDS: chunk sample

84. True or False: Items or individuals in a judgment sample are chosen with regard to their probability of
occurrence.

ANSWER:
False
KEYWORDS: judgment sample, nonprobability sample

85. True or False: When participants are allowed to self-select into the sample, you have a nonprobability sample.

ANSWER:
True
KEYWORDS: nonprobability sample

86. True or False: Systematic samples are less efficient than stratified samples.

ANSWER:
True
KEYWORDS: systematic sample, stratified sample


87. True or False: The professor of a business statistics class wanted to find out the average amount of time per
week her students spent studying for the class. Among the 50 students in her class, 20% were freshmen, 50%
were sophomores and 30% were juniors. She decided to draw 2 students randomly from the freshmen, 5
randomly from the sophomores and 3 randomly from the juniors. This is an example of a systematic sample.

ANSWER:
False
KEYWORDS: stratified sample

week her students spent studying for the class. She divided the students into the left, right and center groups
according to the location they sat in the class that day. One of these 3 groups was randomly selected and
everyone in the group was asked the average amount of time per week he/she spent studying for the class. This
is an example of a cluster sample.

ANSWER:
True
KEYWORDS: cluster sample

week her students spent studying for the class. She divided the fifty students on her roster into ten groups,
starting from the first student on the roster. The first student was randomly selected from the first group. Then
every tenth student was selected from the remaining students. This is an example of a cluster sample.

ANSWER:
False
KEYWORDS: systematic sample

90. True or False: Selection bias occurs more frequently in systematic samples than in simple random samples.

ANSWER:
True
TYPE: TF DIFFICULTY: easy
KEYWORDS: simple random sample, systematic sample

91. True or False: The question: Have you used any form of illicit drugs over the past 2 months? will most likely
result in measurement error.

ANSWER:
True
KEYWORDS: measurement error

92. True or False: The question: How much did you make last year, rounded to the nearest hundreds of dollars?
will most likely result in measurement error.

ANSWER:
True
KEYWORDS: measurement error


93. The Human Resources Director of a large corporation wishes to develop an employee benefits package and
decides to select 500 employees from a list of all (N = 40,000) workers in order to study their preferences for
the various components of a potential package. All the employees in the corporation constitute the _______.

ANSWER:
population
TYPE: FI DIFFICULTY: Easy

the various components of a potential package. The 500 employees who will participate in this study constitute
the _______.

ANSWER:
sample
KEYWORDS: sample

the various components of a potential package. The Director will use the data from the sample to compute
_______.

ANSWER:
statistics
KEYWORDS: statistic

the various components of a potential package. Information obtained from the sample will be used to draw
conclusions about the true population _______.

ANSWER:
parameters
KEYWORDS: parameter


the various components of a potential package. In this study, methods involving the collection, presentation, and
characterization of the data are called _______.

ANSWER:
descriptive statistics/methods

the various components of a potential package. In this study, methods that result in decisions concerning
population characteristics based only on the sample results are called _______.

ANSWER:
inferential statistics/methods

99. Mediterranean fruit flies were discovered in California a few years ago and badly damaged the oranges grown
in that state. Suppose the manager of a large farm wanted to study the impact of the fruit flies on the orange
crops on a daily basis over a 6-week period. On each day, a random sample of orange trees were selected from
within a random sample of acres. The daily average number of damaged oranges per tree and the proportion of
trees having damaged oranges were calculated. The two main measures calculated each day (i.e., average
number of damaged oranges per tree and proportion of trees having damaged oranges) are called _______.

ANSWER:
statistics
TYPE: FI DIFFICULTY: Moderate
KEYWORDS: statistic

trees having damaged oranges were calculated. The two main measures calculated each day (i.e., average
number of damaged oranges per tree and proportion of trees having damaged oranges) may be used on a daily
basis to estimate the respective true population _______.

ANSWER:
parameters
KEYWORDS: parameters


trees having damaged oranges were calculated. In this study, drawing conclusions on any one day about the true
population characteristics, based on information obtained from the sample, is called _______.

ANSWER:
inferential statistics/methods

trees having damaged oranges were calculated. In this study, the presentation and characterization of the two
main measures calculated each day (i.e., average number of damaged oranges per tree and proportion of trees
having damaged oranges) is called _______.

ANSWER:

103. The Quality Assurance Department of a large urban hospital is attempting to monitor and evaluate patient
satisfaction with hospital services. Prior to discharge, a random sample of patients is asked to fill out a
questionnaire to rate such services as medical care, nursing, therapy, laboratory, food, and cleaning. The
Quality Assurance Department prepares weekly reports that are presented at the Board of Directors meetings
and extraordinary/atypical ratings are easy to flag. Values computed from the sample results each week are
called _______.

ANSWER:
statistics
KEYWORDS: statistic


104. The Quality Assurance Department of a large urban hospital is attempting to monitor and evaluate patient
satisfaction with hospital services. Prior to discharge, a random sample of patients is asked to fill out a
questionnaire to rate such services as medical care, nursing, therapy, laboratory, food, and cleaning. The
Quality Assurance Department prepares weekly reports that are presented at the Board of Directors meetings
and extraordinary/atypical ratings are easy to flag. True population characteristics estimated from the sample
results each week are called _______.

ANSWER:
parameters
KEYWORDS: parameter

105. The Commissioner of Health in New York State wanted to study malpractice litigation in New York. A
sample of 31,000 medical records was drawn from a population of 2.7 million patients who were discharged
during the year 1997. The proportion of malpractice claims filed from the sample of 31 thousand patients is a
_______.

ANSWER:
statistic
KEYWORDS: statistic

during the year 1997. The true proportion of malpractice claims filed from the population of 2.7 million patients
is a _______.

ANSWER:
parameter
KEYWORDS: parameter

during the year 1997. Using the information obtained from the sample to predict population characteristics, with
respect to malpractice litigation, is an example of _______.

ANSWER:
inferential statistics


during the year 1997. The collection, presentation, and characterization of the data from patient medical records
are examples of _______.

ANSWER:

109. An insurance company evaluates many numerical variables about a person before deciding on an appropriate
rate for automobile insurance. The number of claims a person has made in the last 3 years is an example of a
_______ variable.

ANSWER:
discrete

rate for automobile insurance. The distance a person drives in a year is an example of a _______ variable.

ANSWER:
continuous

rate for automobile insurance. A person's age is an example of a _______ variable.

ANSWER:
continuous

rate for automobile insurance. How long a person has been a licensed driver is an example of a _______
variable.

ANSWER:
continuous


rate for automobile insurance. The number of tickets a person has received in the last 3 years is an example of a
_______ variable.

ANSWER:
discrete

114. In purchasing an automobile, there are a number of variables to consider. The body style of the car (sedan,
coupe, wagon, etc.) is an example of a _______ variable.

ANSWER:
categorical

115. In purchasing an automobile, there are a number of variables to consider. The classification of the car as a
subcompact, compact, standard, or luxury size is an example of a _______ variable.

ANSWER:
categorical

116. In purchasing an automobile, there are a number of variables to consider. The color of the car is an example of
a _______ variable.

ANSWER:
categorical

117. Most colleges admit students based on their achievements in a number of different areas. Whether a student
has taken any advanced placement courses is an example of a _______ variable.

ANSWER:
categorical

118. Most colleges admit students based on their achievements in a number of different areas. The grade obtained
in senior level English (A, B, C, D, or F) is an example of a _______ variable.

ANSWER:
categorical

119. Most colleges admit students based on their achievements in a number of different areas. The total SAT score
achieved by a student is an example of a _______ numerical variable.

ANSWER:
continuous


120. The Dean of Students conducted a survey on campus. The gender of the student is an example of a _______
variable.

ANSWER:
categorical

121. The Dean of Students conducted a survey on campus. Class designation (freshman, sophomore, junior,
senior) is an example of a _______ variable.

ANSWER:
categorical

122. The Dean of Students conducted a survey on campus. Major area of study is an example of a _______
variable.

ANSWER:
categorical

123. The Dean of Students conducted a survey on campus. SAT score in mathematics is an example of a _______
numerical variable.

ANSWER:
continuous

124. The Dean of Students conducted a survey on campus. Grade point average (GPA) is an example of a _______
numerical variable.

ANSWER:
continuous


125. The Dean of Students conducted a survey on campus. Number of credits currently enrolled for is an example
of a _______ numerical variable.

ANSWER:
discrete

126. The Dean of Students conducted a survey on campus. Number of clubs, groups, teams, and organizations
affiliated with on campus is an example of a _______ numerical variable.

ANSWER:
discrete

127. A personal computer user survey was conducted. Computer brand primarily used is an example of a _______
variable.

ANSWER:
categorical

128. A personal computer user survey was conducted. Number of personal computers owned is an example of a
_______ numerical variable.

ANSWER:
discrete

129. A personal computer user survey was conducted. The number of years using a personal computer is an
example of a _______ numerical variable.

ANSWER:
continuous

130. A personal computer user survey was conducted. Hours of personal computer use per week is an example of a
_______ numerical variable.

ANSWER:
continuous


131. A personal computer user survey was conducted. Primary word processing package used is an example of a
_______ variable.

ANSWER:
categorical

132. A personal computer user survey was conducted. The number of computer magazine subscriptions is an
example of a _______ numerical variable.

ANSWER:
discrete

133. ________ results from the exclusion of certain groups of subjects from a population frame.

ANSWER:
Coverage error
TYPE: FI DIFFICULTY: Difficult
KEYWORDS: coverage error, survey worthiness

134. Coverage error results in a ________.

ANSWER:
selection bias
KEYWORDS: selection bias, survey worthiness

135. ________ results from the failure to collect data on all subjects in the sample.

ANSWER:
Nonresponse error or bias
KEYWORDS: nonresponse error, survey worthiness

136. The sampling process begins by locating appropriate data sources called ___________.

ANSWER:
frames
KEYWORDS: frames, sampling method

CHAPTER 2: PRESENTING DATA IN TABLES AND CHARTS

TABLE 2-1

An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate
for automobile insurance. A representative from a local insurance agency selected a random sample of insured
drivers and recorded X, the number of claims each made in the last 3 years, with the following results:
X f
1 14
2 18
3 12
4 5
5 1

1. Referring to Table 2-1, how many drivers are represented in the sample?
a) 5
b) 15
c) 18
d) 50

ANSWER:
d
KEYWORDS: frequency distribution

2. Referring to Table 2-1, how many total claims are represented in the sample?
a) 15
b) 50
c) 111
d) 250

ANSWER:
c
KEYWORDS: interpretation, frequency distribution


3. A type of vertical bar chart in which the categories are plotted in the descending rank order of the magnitude of
their frequencies is called a
a) contingency table.
b) Pareto diagram.
c) dot plot.
d) pie chart.

ANSWER:
b
KEYWORDS: Pareto diagram

TABLE 2-2

At a meeting of information systems officers for regional offices of a national company, a survey was taken to
determine the number of employees the officers supervise in the operation of their departments, where X is the
number of employees overseen by each information systems officer.
X f_
1 7
2 5
3 11
4 8
5 9

4. Referring to Table 2-2, how many regional offices are represented in the survey results?
a) 5
b) 11
c) 15
d) 40

ANSWER:
d

5. Referring to Table 2-2, across all of the regional offices, how many total employees were supervised by those
surveyed?
a) 15
b) 40
c) 127
d) 200

ANSWER:
c


6. The width of each bar in a histogram corresponds to the
a) differences between the boundaries of the class.
b) number of observations in each class.
c) midpoint of each class.
d) percentage of observations in each class.

ANSWER:
a

TABLE 2-3

Every spring semester, the School of Business coordinates with local business leaders a luncheon for graduating
seniors, their families, and friends. Corporate sponsorship pays for the lunches of each of the seniors, but students
have to purchase tickets to cover the cost of lunches served to the guests they bring with them. The following
histogram represents the attendance at the senior luncheon, where X is the number of guests each graduating senior
invited to the luncheon, and f is the number of graduating seniors in each category.

7. Referring to the histogram from Table 2-3, how many graduating seniors attended the luncheon?
a) 4
b) 152
c) 275
d) 388

ANSWER:
c
EXPLANATION: The number of graduating seniors is the sum of all the frequencies, f.
KEYWORDS: interpretation, histogram

17
152
85
18
3
0
0
20
40
60
80
100
120
140
160
0 1 2 3 4 5
Guests per St udent
F
r
e
q
u
e
n
c
y

8. Referring to the histogram from Table 2-3, if all the tickets purchased were used, how many guests attended the
luncheon?
a) 4
b) 152
c) 275
d) 388

ANSWER:
d
EXPLANATION: The total number of guests is
6
1
i i
i
X f
=

KEYWORDS: interpretation, histogram

9. A professor of economics at a small Texas university wanted to determine which year in school students were
taking his tough economics course. Shown below is a pie chart of the results. What percentage of the class took
the course prior to reaching their senior year?

a) 14%
b) 44%
c) 54%
d) 86%

ANSWER:
d
KEYWORDS: interpretation, pie chart

Juniors
30%
Seniors
14%
Sophomores
46%
Freshmen
10%

10. When polygons or histograms are constructed, which axis must show the true zero or "origin?"
a) the horizontal axis
b) the vertical axis
c) both the horizontal and vertical axes
d) neither the horizontal nor the vertical axis

ANSWER:
b
KEYWORDS: polygon, histogram

11. When constructing charts, the following is plotted at the class midpoints:
a) frequency histograms.
b) percentage polygons.
c) cumulative relative frequency ogives.
d) all of the above

ANSWER:
b
KEYWORDS: percentage polygon

TABLE 2-4

A survey was conducted to determine how people rated the quality of programming available on television.
Respondents were asked to rate the overall quality from 0 (no quality at all) to 100 (extremely good quality). The
stem-and-leaf display of the data is shown below.
Stem Leaves
3 24
4 03478999
5 0112345
6 12566
7 01
8
9 2

12. Referring to Table 2-4, what percentage of the respondents rated overall television quality with a rating of 80 or
above?
a) 0.00
b) 0.04
c) 0.96
d) 1.00

ANSWER:
b
KEYWORDS: stem-and-leaf display, interpretation


13. Referring to Table 2-4, what percentage of the respondents rated overall television quality with a rating of 50 or
below?
a) 0.11
b) 0.40
c) 0.44
d) 0.56

ANSWER:
c

14. Referring to Table 2-4, what percentage of the respondents rated overall television quality with a rating between
50 and 75?
a) 0.11
b) 0.40
c) 0.44
d) 0.56

ANSWER:
d

TABLE 2-5

The following are the durations (in minutes) of a sample of long-distance phone calls made within the continental
United States, reported by one long-distance carrier:

Relative
Time (in Minutes) Frequency
0 but less than 5 0.37
30 or more 0.02

15. Referring to Table 2-5, what is the width of each class?
a) 1 minute
b) 5 minutes
c) 2%
d) 100%

ANSWER:
b
KEYWORDS: class interval, relative frequency distribution
16. Referring to Table 2-5, if 1,000 calls were randomly sampled, how many calls lasted under 10 minutes?
a) 220
b) 370
c) 410
d) 590


ANSWER:
d
KEYWORDS: relative frequency distribution, interpretation

17. Referring to Table 2-5, if 100 calls were randomly sampled, how many calls lasted 15 minutes or longer?
a) 10
b) 14
c) 26
d) 74

ANSWER:
c

18. Referring to Table 2-5, if 10 calls lasted 30 minutes or more, how many calls lasted less than 5 minutes?
a) 10
b) 185
c) 295
d) 500

ANSWER:
b

19. Referring to Table 2-5, what is the cumulative relative frequency for the percentage of calls that lasted under 20
minutes?
a) 0.10
b) 0.59
c) 0.76
d) 0.84

ANSWER:
d
KEYWORDS: cumulative relative frequency


20. Referring to Table 2-5, what is the cumulative relative frequency for the percentage of calls that lasted 10
minutes or more?
a) 0.16
b) 0.24
c) 0.41
d) 0.90

ANSWER:
c
KEYWORDS: cumulative relative frequency

21. Referring to Table 2-5, if 100 calls were randomly sampled, _______ of them would have lasted between 15
minutes but less than 20 minutes.
a) 0.10
b) 0.16
c) 10
d) 16

ANSWER:
c

22. Referring to Table 2-5, if 100 calls were sampled, _______ of them would have lasted less than 15 minutes.
a) 26
b) 74
c) 10

ANSWER:
b

23. Referring to Table 2-5, if 100 calls were sampled, _______of them would have lasted 20 minutes or more.
a) 26
b) 16
c) 74

ANSWER:
b


24. Referring to Table 2-5, if 100 calls were sampled, _______ of them would have lasted less than 5 minutes, or at
least 30 minutes or more.
a) 35
b) 37
c) 39

ANSWER:
c

25. When studying the simultaneous responses to two categorical questions, we should set up a
a) contingency table.
b) frequency distribution table.
c) cumulative percentage distribution table.
d) histogram.

ANSWER:
a
KEYWORDS: contingency table

TABLE 2-6

A sample of 200 students at a Big Ten university was taken after the midterm to ask them whether they went bar
hopping the weekend before the midterm or spent the weekend studying, and whether they did well or poorly on the
midterm. The following table contains the result:

Did Well on Midterm Did Poorly on Midterm
Studying for Exam 80 20
Went Bar Hopping 30 70

26. Referring to Table 2-6, of those who went bar hopping the weekend before the midterm in the sample, _______
percent of them did well on the midterm.
a) 15
b) 27.27
c) 30
d) 55

ANSWER:
c
KEYWORDS: contingency table, interpretation


27. Referring to Table 2-6, of those who did well on the midterm in the sample, _______ percent of them went bar
hopping the weekend before the midterm.
a) 15
b) 27.27
c) 30
d) 50

ANSWER:
b

28. Referring to Table 2-6, _______ percent of the students in the sample went bar hopping the weekend before the
midterm and did well on the midterm.
a) 15
b) 27.27
c) 30
d) 50

ANSWER:
a

29. Referring to Table 2-6, _______ percent of the students in the sample spent the weekend studying and did well
on the midterm.
a) 40
b) 50
c) 72.72
d) 80

ANSWER:
a

30. Referring to Table 2-6, if the sample is a good representation of the population, we can expect _______ percent
of the students in the population to spend the weekend studying and do poorly on the midterm.
a) 10
b) 20
c) 45
d) 50

ANSWER:
a

of those who spent the weekend studying to do poorly on the midterm.
a) 10
b) 20
c) 45
d) 50


ANSWER:
b

of those who did poorly on the midterm to have spent the weekend studying.
a) 10
b) 22.22
c) 45
d) 50

ANSWER:
b

33. In a contingency table, the number of rows and columns
a) must always be the same.
b) must always be 2.
c) must add to 100%.

ANSWER:
d


34. Retailers are always interested in determining why a customer selected their store to make a purchase. A
sporting goods retailer conducted a customer survey to determine why its customers shopped at the store. The
results are shown in the bar chart below. What proportion of the customers responded that they shopped at the
store because of the merchandise or the convenience?

a) 35%
b) 50%
c) 65%
d) 85%

ANSWER:
c
KEYWORDS: bar chart, interpretation

TABLE 2-7

The stem-and-leaf display below contains data on the number of months between the date a civil suit is filed and
when the case is actually adjudicated for 50 cases heard in superior court.
Stem Leaves
1 2 3 4 4 4 7 8 9 9
2 2 2 2 2 3 4 5 5 6 7 8 8 8 9
3 0 0 1 1 1 3 5 7 7 8
4 0 2 3 4 5 5 7 9
5 1 1 2 4 6 6
6 1 5 8
35. Referring to Table 2-7, locate the first leaf, i.e., the smallest leaf with the smallest stem. This represents a wait
of ________ months.

ANSWER:
12
TYPE: FI DIFFICULTY: 1 Easy

15%
15%
50%
20%
0% 10% 20% 30% 40% 50% 60%
Other
Convenience
Merchandise
Prices
Responses

36. Referring to Table 2-7, the civil suit with the longest wait between when the suit was filed and when it was
adjudicated had a wait of ________ months.

ANSWER:
68

37. Referring to Table 2-7, the civil suit with the fourth shortest waiting time between when the suit was filed and
when it was adjudicated had a wait of ________ months.

ANSWER:
14

38. Referring to Table 2-7, ________ percent of the cases were adjudicated within the first 2 years.

ANSWER:
30

39. Referring to Table 2-7, ________ percent of the cases were not adjudicated within the first 4 years.

ANSWER:
20

40. Referring to Table 2-7, if a frequency distribution with equal sized classes was made from this data, and the first
class was "10 but less than 20," the frequency of that class would be ________.

ANSWER:
9

class was "10 but less than 20," the relative frequency of the third class would be ________.

ANSWER:
0.20 or 20% or 10/50
KEYWORDS: stem-and-leaf display, relative frequency distribution

class was "10 but less than 20," the cumulative percentage of the second class would be ________.

ANSWER:
46% or 0.46 or 23/50
KEYWORDS: stem-and-leaf display, cumulative percentage distribution

TABLE 2-8

The stem-and-leaf display represents the number of times in a year that a random sample of 100 "lifetime" members
of a health club actually visited the facility.
Stem Leaves
0 012222233333344566666667789999
1 1111222234444455669999
2 00011223455556889
3 0000446799
4 011345567
5 0077
6 8
7 67
8 3
9 0247

43. Referring to Table 2-8, the person who has the largest leaf associated with the smallest stem visited the facility
________ times.

ANSWER:
9

44. Referring to Table 2-8, the person who visited the health club less than anyone else in the sample visited the
facility ________ times.

ANSWER:
0 or no
45. Referring to Table 2-8, the person who visited the health club more than anyone else in the sample visited the
facility ________ times.

ANSWER:
97


46. Referring to Table 2-8, ________ of the 100 members visited the health club at least 52 times in a year.

ANSWER:
10

47. Referring to Table 2-8, ________ of the 100 members visited the health club no more than 12 times in a year.

ANSWER:
38

class was "0 but less than 10," the frequency of the fifth class would be ________.

ANSWER:
9
KEYWORDS: stem-and-leaf display, frequency distribution

class was "0 but less than 10," the relative frequency of the last class would be ________.

ANSWER:
4% or 0.04 or 4/100
KEYWORDS: stem-and-leaf display, relative frequency distribution

class was "0 but less than 10," the cumulative percentage of the next-to-last class would be ________.

ANSWER:
96% or 0.96 or 96/100
KEYWORDS: stem-and-leaf display, cumulative percentage distribution


class was "0 but less than 10," the class midpoint of the third class would be ________.

ANSWER:
25 or (20+30)/2
KEYWORDS: stem-and-leaf display, class midpoint

TABLE 2-9

The frequency distribution below represents the rents of 250 randomly selected federally subsidized apartments in
Minneapolis.

Rents in $ Frequency
300 but less than 400 113

52. Referring to Table 2-9, ________ apartments rented for at least $400 but less than $600.

ANSWER:
117

53. Referring to Table 2-9, ________ percent of the apartments rented for less than $600.

ANSWER:
92% or 230/250
KEYWORDS: frequency distribution, cumulative percentage distribution

54. Referring to Table 2-9, ________ percent of the apartments rented for at least $500.

ANSWER:
20.8% or 52/250

55. Referring to Table 2-9, the class midpoint of the second class is ________.

ANSWER:
450
KEYWORDS: frequency distribution, class midpoint


56. Referring to Table 2-9, the relative frequency of the second class is ________.

ANSWER:
85/250 or 17/50 or 34% or 0.34
KEYWORDS: frequency distribution, relative frequency distribution

57. Referring to Table 2-9, the percentage of apartments renting for less than $600 is ________.

ANSWER:
230/250 or 23/25 or 92% or 0.92

TABLE 2-10

The histogram below represents scores achieved by 200 job applicants on a personality profile.

58. Referring to the histogram from Table 2-10, ________ percent of the job applicants scored between 10 and 20.
ANSWER:
20%
KEYWORDS: histogram, percentage distribution

59. Referring to the histogram from Table 2-10, ________ percent of the job applicants scored below 50.

ANSWER:
80%
KEYWORDS: histogram, percentage distribution

0.10
0.20 0.20
0.10
0.20
0.10 0.10
0.00
0.10
0.20
0.30
0 10 20 30 40 50 60 70
Rel.Freq.

60. Referring to the histogram from Table 2-10, the number of job applicants who scored between 30 and 60 is
_______.

ANSWER:
80
KEYWORDS: histogram

61. Referring to the histogram from Table 2-10, the number of job applicants who scored 50 or above is _______.

ANSWER:
40
KEYWORDS: histogram

62. Referring to the histogram from Table 2-10, 90% of the job applicants scored above or equal to ________.

ANSWER:
10
KEYWORDS: histogram, cumulative percentage distribution

63. Referring to the histogram from Table 2-10, half of the job applicants scored below ________.

ANSWER:
30

64. Referring to the histogram from Table 2-10, _______ percent of the applicants scored below 20 or at least 50.

ANSWER:
50%

65. Referring to the histogram from Table 2-10, _______ percent of the applicants scored between 20 and below 50.

ANSWER:
50%


TABLE 2-11

The ordered array below resulted from taking a sample of 25 batches of 500 computer chips and determining how
many in each batch were defective.

Defects
1 2 4 4 5 5 6 7 9 9 12 12 15
17 20 21 23 23 25 26 27 27 28 29 29

66. Referring to Table 2-11, if a frequency distribution for the defects data is constructed, using "0 but less than 5"
as the first class, the frequency of the 20 but less than 25 class would be ________.

ANSWER:
4

67. Referring to Table 2-11, if a frequency distribution for the defects data is constructed, using "0 but less than 5"
as the first class, the relative frequency of the 15 but less than 20 class would be ________.

ANSWER:
0.08 or 8% or 2/25
KEYWORDS: relative frequency distribution

68. Referring to Table 2-11, construct a frequency distribution for the defects data, using "0 but less than 5" as the
first class.

ANSWER:
Defects Frequency
0 but less than 5 4
TYPE: PR DIFFICULTY: Easy


69. Referring to Table 2-11, construct a relative frequency or percentage distribution for the defects data, using "0
but less than 5" as the first class.

ANSWER:
Defects Percentage
TYPE: PR DIFFICULTY: Moderate
KEYWORDS: relative frequency distribution, percentage distribution

70. Referring to Table 2-11, construct a cumulative percentage distribution for the defects data if the corresponding
frequency distribution uses "0 but less than 5" as the first class.

ANSWER:
Defects CumPct
0 0
5 16
10 40
15 48
20 56
25 72
30 100
KEYWORDS: cumulative percentage distribution


71. Referring to Table 2-11, construct a histogram for the defects data, using "0 but less than 5" as the first class.

ANSWER:

KEYWORDS: histogram, frequency distribution

72. Referring to Table 2-11, construct a cumulative percentage polygon for the defects data if the corresponding
frequency distribution uses "0 but less than 5" as the first class.

ANSWER:

KEYWORDS: cumulative percentage polygon

4
6
2 2
4
7
0
1
2
3
4
5
6
7
0 5 10 15 20 25 30
Number of Defect s
Frequency
0
10
20
30
40
50
60
70
80
90
100
0 5 10 15 20 25 30
Number of Defect s
P
e
r
c
e
n
t
a
g
e

o
f

C
h
i
p
s

73. The point halfway between the boundaries of each class interval in a grouped frequency distribution is called
the _______.

ANSWER:
class midpoint
KEYWORDS: cumulative percentage polygon, frequency distribution

74. A _______ is a vertical bar chart in which the rectangular bars are constructed at the boundaries of each class
interval.

ANSWER:
histogram
KEYWORDS: histogram

75. It is essential that each class grouping or interval in a frequency distribution be ________.

ANSWER:
non-overlapping
KEYWORDS: frequency distribution, class interval

76. In order to compare one large batch of numerical data to another, a ________ distribution must be developed
from the frequency distribution.

ANSWER:
relative frequency or percentage
KEYWORDS: relative frequency distribution, percentage distribution

77. When comparing two or more large batches of numerical data, the distributions being developed should use the
same ________.

ANSWER:
class boundaries
KEYWORDS: class boundaries

78. It is desirable that the width of each class grouping or interval in a frequency distribution be ________.

ANSWER:
the same or equal
KEYWORDS: class interval, frequency distribution


79. In constructing a polygon, each class grouping is represented by its _______ and then these are consecutively
connected to one another.

ANSWER:
midpoint
KEYWORDS: polygon, class interval, midpoint

80. A _______ is a summary table in which numerical data are tallied into class intervals or categories.

ANSWER:
frequency distribution

81. True or False: In general, grouped frequency distributions should have between 5 and 15 class intervals.

ANSWER:
True
KEYWORDS: frequency distribution, number of classes

82. True or False: The sum of relative frequencies in a distribution always equals 1.

ANSWER:
True
KEYWORDS: relative frequency

83. True or False: The sum of cumulative frequencies in a distribution always equals 1.

ANSWER:
False
KEYWORDS: cumulative frequency distribution

84. True or False: In graphing bivariate categorical data, the side-by-side bar chart is best suited when the primary
interest is in demonstrating differences in magnitude rather than differences in percentages.

ANSWER:
True
KEYWORDS: side-by-side chart


85. True or False: When constructing a frequency distribution, classes should be selected in such a way that they are
of equal width.

ANSWER:
True

86. True or False: A research analyst was directed to arrange raw data collected on the yield of wheat, ranging from
40 to 93 bushels per acre, in a frequency distribution. He should choose 30 as the class interval width.

ANSWER:
False

87. True or False: If the values of the seventh and eighth classes in a cumulative frequency distribution are the
same, we know that there are no observations in the eighth class.

ANSWER:
True
KEYWORDS: cumulative frequency distribution

88. True or False: The bar chart is preferred to the pie chart, because the human eye can more accurately judge
length comparisons against a fixed scale (as in a bar chart) than angular measures (as in a pie chart).

ANSWER:
True
KEYWORDS: bar chart, pie chart

89. True or False: One of the advantages of a pie chart is that it clearly shows that the total of all the categories of
the pie adds to 100%.

ANSWER:
True
KEYWORDS: pie chart

90. True or False: The larger the number of observations in a numerical data set, the larger the number of class
intervals needed for a grouped frequency distribution.

ANSWER:
True
KEYWORDS: class interval, frequency distribution


91. True or False: Determining the class boundaries of a frequency distribution is highly subjective.

ANSWER:
True
KEYWORDS: class boundaries, frequency distribution

92. True or False: The original data values cannot be assessed once they are grouped into a frequency distribution
table.

ANSWER:
True

93. True or False: The percentage distribution cannot be constructed from the frequency distribution directly.

ANSWER:
False
KEYWORDS: percentage distribution, frequency distribution

94. True or False: The stem-and-leaf display is often superior to the frequency distribution in that it maintains the
original values for further analysis.

ANSWER:
True
KEYWORDS: stem-and-leaf display, frequency distribution

95. True or False: The relative frequency is the frequency in each class divided by the total number of observations.

ANSWER:
True
KEYWORDS: relative frequency distribution

96. True or False: Ogives are plotted at the midpoints of the class groupings.

ANSWER:
False
KEYWORDS: ogives, midpoint


97. True or False: Percentage polygons are plotted at the boundaries of the class groupings.

ANSWER:
False
KEYWORDS: percentage polygons

98. True or False: The main principle behind the Pareto diagram is the ability to track the "vital few" from the
"trivial many."

ANSWER:
True

99. True or False: A histogram can have gaps between the bars, whereas bar charts cannot have gaps.

ANSWER:
False
KEYWORDS: histogram, bar chart

100. True or False: Histograms are used for numerical data, while bar charts are suitable for categorical data.

ANSWER:
True
KEYWORDS: histogram, bar chart

101. True or False: A Wal-Mart store in a small town monitors customer complaints and organizes these
complaints into six distinct categories. Over the past year, the company has received 534 complaints. One
possible graphical method for representing these data would be a Pareto chart.

ANSWER:
True

102. True or False: Apple Computer, Inc. collected information on the age of their customers. The youngest
customer was 12 and the oldest was 72. To study the distribution of age among its customers, it can use a
Pareto diagram.

ANSWER:
False


customer was 12 and the oldest was 72. To study the distribution of age among its customers, it can use a pie
chart.

ANSWER:
False
KEYWORDS: pie chart

customer was 12 and the oldest was 72. To study the distribution of age among its customers, it can use a
percentage polygon.

ANSWER:
True

customer was 12 and the oldest was 72. To study the percentage of their customers who are below a certain
age, it can use an ogive.

ANSWER:
True
KEYWORDS: ogive

106. True or False: If you wish to construct a graph of a relative frequency distribution, you would most likely
construct an ogive first.

ANSWER:
False
KEYWORDS: ogive

107. True or False: An ogive is a cumulative percentage polygon.

ANSWER:
True
KEYWORDS: Ogive, cumulative percentage polygon

108. True or False: A side-by-side chart is two histograms plotted along side each other.

ANSWER:
False
KEYWORDS: side-by-side chart


109. True or False: A good choice for the number of class groups to use in constructing frequency distribution is
approximately n .

ANSWER:
True
KEYWORDS: number of classes

110. True or False: In general, a frequency distribution should have at least 8 class groups but no more than 20.

ANSWER:
False
KEYWORDS: number of classes

111. True of False: To determine the width of class interval, divide the number of class groups by the range of the
data.

ANSWER:
False
KEYWORDS: class interval

112. True or False: The percentage polygon is formed by having the lower boundary of each class represent the
data in that class and then connecting the sequence of lower boundaries at their respective class percentages.

ANSWER:
False

113. True or False: A polygon can be constructed from a histogram.

ANSWER:
True
KEYWORDS: polygon

114. To evaluate two categorical variables at the same time, a _______ should be developed.

ANSWER:
contingency or cross-classification table
KEYWORDS: contingency table, cross-classification table


115. Relationships in a contingency table can be examined more fully if the frequencies are converted into
_______ .

ANSWER:
percentages or proportions

TABLE 2-12

The table below contains the opinions of a sample of 200 people broken down by gender about the latest
congressional plan to eliminate anti-trust exemptions for professional baseball.

For Neutral Against Totals
Female 38 54 12 104
Male 12 36 48 96
Totals 50 90 60 200

116. Referring to Table 2-12, construct a table of row percentages.

ANSWER:
Female 36.54 51.92 11.54 100.00
Male 12.50 37.50 50.00 100.00
Totals 25.00 45.00 30.00 100.00
KEYWORDS: row percentages

117. Referring to Table 2-12, construct a table of column percentages.

ANSWER:
Female 76.00 60.00 20.00 52.00
Male 24.00 40.00 80.00 48.00
Totals 100.00 100.00 100.00 100.00
KEYWORDS: column percentages

118. Referring to Table 2-12, construct a table of total percentages.

ANSWER:
Female 19.00 27.00 6.00 52.00
Male 6.00 18.00 24.00 48.00
Totals 25.00 45.00 30.00 100.00
KEYWORDS: total percentages


119. Referring to Table 2-12, of those for the plan in the sample, ________ percent were females.

ANSWER:
76%
KEYWORDS: contingency table, column percentages

120. Referring to Table 2-12, of those neutral in the sample, ________ percent were males.

ANSWER:
40%

121. Referring to Table 2-12, of the males in the sample, ________ percent were for the plan.

ANSWER:
12.50%

122. Referring to Table 2-12, of the females in the sample, ________ percent were against the plan.

ANSWER:
11.54%

123. Referring to Table 2-12, of the females in the sample, ________ percent were either neutral or against the
plan.

ANSWER:
63.46% or (51.92+11.54)%

124. Referring to Table 2-12, ________ percent of the 200 were females who were against the plan.

ANSWER:
6%

125. Referring to Table 2-12, ________ percent of the 200 were males who were neutral.

ANSWER:
18%

126. Referring to Table 2-12, ________ percent of the 200 were females who were either neutral or against the
plan.

ANSWER:
33%


127. Referring to Table 2-12, _______ percent of the 200 were males who were not against the plan.

ANSWER:
24%

128. Referring to Table 2-12, _______ percent of the 200 were not neutral.

ANSWER:
55%
KEYWORDS: contingency table, row percentages

129. Referring to Table 2-12, _______ percent of the 200 were against the plan.

ANSWER:
30%

130. Referring to Table 2-12, ________ percent of the 200 were males.

ANSWER:
48%

131. Referring to Table 2-12, if the sample is a good representation of the population, we can expect _______
percent of the population will be for the plant.

ANSWER:
25%

percent of the population will be males.

ANSWER:
48%

percent of those for the plan in the population will be males.

ANSWER:
24%


percent of the males in the population will be against the plan.

ANSWER:
50%

percent of the females in the population will not be against the plan.

ANSWER:
88.46% or (36.54+51.92)


CHAPTER 3: NUMERICAL DESCRIPTIVE MEASURES

1. Which of the following statistics is NOT a measure of central tendency?
a) arithmetic mean
b) median
c) mode
d) Q3

ANSWER:
d
KEYWORDS: measure of central tendency, arithmetic mean, median, mode, quartiles

2. Which measure of central tendency can be used for both numerical and categorical variables?
a) arithmetic mean
b) median
c) mode
d) geometric mean

ANSWER:
c
KEYWORDS: measure of central tendency, mode, arithmetic mean, median, geometric mean

3. Which of the arithmetic mean, median, mode, and geometric mean are resistant measures of central tendency?
a) the arithmetic mean and median only
b) the median only
c) the mode and geometric mean only
d) the arithmetic mean and mode only

ANSWER:
b
KEYWORDS: measure of central tendency, resistant to outliers, mean, median, mode

4. In a right-skewed distribution,
a) the median equals the arithmetic mean.
b) the median is less than the arithmetic mean.
c) the median is larger than the arithmetic mean.

ANSWER:
b
KEYWORDS: shape

5. Which of the following statements about the median is not true?
a) It is more affected by extreme values than the arithmetic mean.
b) It is a measure of central tendency.
c) It is equal to Q2.
d) It is equal to the mode in bell-shaped "normal" distributions.

ANSWER:
a
KEYWORDS: median, measure of central tendency, resistant to outliers, quartile

6. In a perfectly symmetrical bell-shaped "normal" distribution
a) the arithmetic mean equals the median.
b) the median equals the mode.
c) the arithmetic mean equals the mode.
d) all of the above

ANSWER:
d
KEYWORDS: shape, normal distribution

7. In a perfectly symmetrical distribution
a) the range equals the interquartile range.
b) the interquartile range equals the arithmetic mean.
c) the median equals the arithmetic mean.
d) the variance equals the standard deviation.

ANSWER:
c
KEYWORDS: shape

8. When extreme values are present in a set of data, which of the following descriptive summary measures are
most appropriate?
a) CV and range
b) arithmetic mean and standard deviation
c) interquartile range and median
d) variance and interquartile range

ANSWER:
c
KEYWORDS: resistant to outliers, coefficient of variation, range, arithmetic mean, standard deviation, interquartile
range, median, variance


9. In general, which of the following descriptive summary measures cannot be easily approximated from a box-
and-whisker plot?
a) the variance
b) the range
c) the interquartile range
d) the median

ANSWER:
a
KEYWORDS: box-and-whisker plot, variance, range, interquartile range, median

10. The smaller the spread of scores around the arithmetic mean,
a) the smaller the interquartile range.
b) the smaller the standard deviation.
c) the smaller the coefficient of variation.
d) all of the above

ANSWER:
d
KEYWORDS: variation, arithmetic mean, interquartile range, standard deviation, coefficient of variation

11. Which descriptive summary measures are considered to be resistant statistics?
a) the arithmetic mean and standard deviation
b) the interquartile range and range
c) the mode and variance
d) the median and interquartile range

ANSWER:
d
KEYWORDS: resistant to outliers, arithmetic mean, standard deviation, interquartile range, range, mode, variance,
median

12. In right-skewed distributions, which of the following is the correct statement?
a) The distance from Q1 to Q2 is larger than the distance from Q2 to Q3.
b) The distance from Q1 to Q2 is smaller than the distance from Q2 to Q3.
c) The arithmetic mean is smaller than the median.
d) The mode is larger than the arithmetic mean.

ANSWER:
b
KEYWORDS: shape, quartiles, arithmetic mean, mode


13. In perfectly symmetrical distributions, which of the following is NOT a correct statement?
a) The distance from Q1 to Q2 equals to the distance from Q2 to Q3.
b) The distance from the smallest observation to Q1 is the same as the distance from Q3 to the largest
observation.
c) The distance from the smallest observation to Q2 is the same as the distance from Q2 to the largest
observation.
d) The distance from Q1 to Q3 is half of the distance from the smallest to the largest observation.

ANSWER:
d
KEYWORDS: shape, quartiles, five-number summary, quartiles

14. In left-skewed distributions, which of the following is the correct statement?
a) The distance from Q1 to Q2 is smaller than the distance from Q2 to Q3.
b) The distance from the smallest observation to Q1 is larger than the distance from Q3 to the largest
observation.
c) The distance from the smallest observation to Q2 is smaller than the distance from Q2 to the largest
observation.
d) The distance from Q1 to Q3 is twice the distance from the Q1 to Q2.

ANSWER:
b
KEYWORDS: shape, quartiles, five-number summary, quartiles

15. According to the empirical rule, if the data form a "bell-shaped" normal distribution, _______ percent of the
observations will be contained within 2 standard deviations around the arithmetic mean.
a) 68.26
b) 88.89
c) 93.75
d) 95.44

ANSWER:
d
KEYWORDS: empirical rule, normal distribution


observations will be contained within 1 standard deviation around the arithmetic mean.
a) 68.26
b) 75.00
c) 88.89
d) 93.75

ANSWER:
a

observations will be contained within 3 standard deviations around the arithmetic mean.
a) 68.26
b) 75.00
c) 95.0
d) 99.7

ANSWER:
d

18. Which of the following is NOT a measure of central tendency?
a) the arithmetic mean
b) the geometric mean
c) the mode
d) the interquartile range

ANSWER:
d
KEYWORDS: measure of central tendency, arithmetic mean, geometric mean, mode, interquartile range

19. Which of the following is NOT sensitive to extreme values?
a) the range
b) the standard deviation
c) the interquartile range
d) the coefficient of variation

ANSWER:
c
KEYWORDS: resistant to outliers, range, standard deviation, interquartile range, coefficient of variation


20. Which of the following is sensitive to extreme values?
a) the median
b) the interquartile range
c) the arithmetic mean
d) the 1
st
quartile

ANSWER:
c
KEYWORDS: resistant to outliers, median, interquartile range, arithmetic mean, quartiles

21. Which of the following is the easiest to compute?
a) the arithmetic mean
b) the median
c) the mode
d) the geometric mean

ANSWER:
c
KEYWORDS: mode, arithmetic mean, median, geometric mean

22. According to the Bienayme-Chebyshev rule, at least 75% of all observations in any data set are contained within
a distance of how many standard deviations around the mean?
a) 1
b) 2
c) 3
d) 4

ANSWER:
b
KEYWORDS: Bienayme-Chebyshev rule

23. According to the Bienayme-Chebyshev rule, at least 93.75% of all observations in any data set are contained
within a distance of how many standard deviations around the mean?
a) 1
b) 2
c) 3
d) 4

ANSWER:
d


24. According to the Bienayme-Chebyshev rule, at least what percentage of the observations in any data set are
contained within a distance of 3 standard deviations around the mean?
a) 67%
b) 75%
c) 88.89%
d) 99.7%

ANSWER:
c

25. According to the Bienayme-Chebyshev rule, at least what percentage of the observations in any data set are
contained within a distance of 2 standard deviations around the mean?
a) 67%
b) 75%
c) 88.89%
d) 95%

ANSWER:
b

TABLE 3-1

Health care issues are receiving much attention in both academic and political arenas. A sociologist recently
conducted a survey of citizens over 60 years of age whose net worth is too high to qualify for Medicaid and have no
private health insurance. The ages of 25 uninsured senior citizens were as follows:
60 61 62 63 64 65 66 68 68 69 70 73 73
74 75 76 76 81 81 82 86 87 89 90 92

26. Referring to Table 3-1, calculate the arithmetic mean age of the uninsured senior citizens to the nearest
hundredth of a year.

ANSWER:
74.04 years
KEYWORDS: arithmetic mean

27. Referring to Table 3-1, identify the median age of the uninsured senior citizens.

ANSWER:
73 years
KEYWORDS: median

28. Referring to Table 3-1, identify the first quartile of the ages of the uninsured senior citizens.

ANSWER:
65 years
KEYWORDS: quartiles

29. Referring to Table 3-1, identify the third quartile of the ages of the uninsured senior citizens.

ANSWER:
81 years
KEYWORDS: quartiles

30. Referring to Table 3-1, identify the interquartile range of the ages of the uninsured senior citizens.

ANSWER:
16 years
KEYWORDS: interquartile range

31. Referring to Table 3-1, identify which of the following is the correct statement.
a) One fourth of the senior citizens sampled are below 65.5 years of age.
b) The middle 50% of the senior citizens sampled are between 65.5 and 73.0 years of age.
c) The average age of senior citizens sampled is 73.5 years of age.
d) All of the above are correct.

ANSWER:
a
KEYWORDS: quartiles, arithmetic mean

32. Referring to Table 3-1, identify which of the following is the correct statement.
a) One fourth of the senior citizens sampled are below 64 years of age.
b) The middle 50% of the senior citizens sampled are between 65.5 and 73.0 years of age.
c) 25% of the senior citizens sampled are older than 81 years of age.

ANSWER:
c
KEYWORDS: quartiles

33. Referring to Table 3-1, what type of shape does the distribution of the sample appear to have?

ANSWER:
Slightly positive or right-skewed.
KEYWORDS: shape

34. Referring to Table 3-1, calculate the variance of the ages of the uninsured senior citizens correct to the nearest
hundredth of a year squared.

ANSWER:
94.96 years
2


KEYWORDS: variance

35. Referring to Table 3-1, calculate the standard deviation of the ages of the uninsured senior citizens correct to the
nearest hundredth of a year.

ANSWER:
9.74 years
KEYWORDS: standard deviation

36. Referring to Table 3-1, calculate the coefficient of variation of the ages of the uninsured senior citizens.

ANSWER:
13.16%
KEYWORDS: coefficient of variation

37. True or False: The median of the values 3.4, 4.7, 1.9, 7.6, and 6.5 is 1.9.

ANSWER:
False
KEYWORDS: median

38. True or False: The median of the values 3.4, 4.7, 1.9, 7.6, and 6.5 is 4.05.

ANSWER:
False
KEYWORDS: median

39. True or False: In a set of numerical data, the value for Q3 can never be smaller than the value for Q1.

ANSWER:
True
KEYWORDS: quartiles


40. True or False: In a set of numerical data, the value for Q2 is always halfway between Q1 and Q3.

ANSWER:
False
KEYWORDS: quartiles

41. True or False: If the distribution of a data set were perfectly symmetrical, the distance from Q1 to the median
would always equal the distance from Q3 to the median in a box-and-whisker plot.

ANSWER:
True
KEYWORDS: box-and-whisker plot, quartiles, shape

42. True or False: In right-skewed distributions, the distance from Q3 to the largest observation exceeds the
distance from the smallest observation to Q1.

ANSWER:
True
KEYWORDS: quartiles, shape

43. True or False: In left-skewed distributions, the distance from the smallest observation to Q1 exceeds the
distance from Q3 to the largest observation.

ANSWER:
True
KEYWORDS: quartiles, shape

44. True or False: A box-and-whisker plot is a graphical representation of a 5-number summary.

ANSWER:
True
KEYWORDS: box-and-whisker plot, five-number summary

45. True or False: The 5-number summary consists of the smallest observation, the first quartile, the median, the
third quartile, and the largest observation.

ANSWER:
True
KEYWORDS: five-number summary


46. True or False: In a box-and-whisker plot, the box portion represents the data between the first and third quartile
values.

ANSWER:
True
KEYWORDS: box-and-whisker plot

47. True or False: The line drawn within the box of the box-and-whisker plot always represents the arithmetic
mean.

ANSWER:
False
KEYWORDS: box-and-whisker plot, arithmetic mean

48. True or False: The line drawn within the box of the box-and-whisker plot always represents the median.

ANSWER:
True
KEYWORDS: box-and-whisker plot, median

49. True or False: In a sample of size 40, the sample mean is 15. In this case, the sum of all observations in the
sample is X
i
= 600.

ANSWER:
True

50. True or False: A population with 200 elements has an arithmetic mean of 10. From this information, it can be
shown that the population standard deviation is 15.

ANSWER:
False
KEYWORDS: arithmetic mean, standard deviation

51. True or False: In exploratory data analysis, a box-and-whisker plot can be used to illustrate the median,
quartiles, and extreme values.

ANSWER:
True
KEYWORDS: box-and-whisker plot, five-number summary


52. True or False: An economics professor bases his final grade on homework, two midterm examinations, and a
final examination. The homework counts 10% toward the final grade, while each midterm examination counts
25%. The remaining portion consists of the final examination. If a student scored 95% in homework, 70% on
the first midterm examination, 96% on the second midterm examination, and 72% on the final, his final average
is 79.8%.

ANSWER:
True

53. True or False: The median of a data set with 20 items would be the average of the 10th and 11th items in the
ordered array.

ANSWER:
True
KEYWORDS: median, arithmetic mean

54. True or False: The coefficient of variation measures variability in a data set relative to the size of the arithmetic
mean.

ANSWER:
True

55. True or False: The coefficient of variation is expressed as a percentage.

ANSWER:
True

56. True or False: The coefficient of variation is a measure of central tendency in the data.

ANSWER:
False
KEYWORDS: coefficient of variation, measure of variation

57. True or False: The interquartile range is a measure of variation or dispersion in a set of data.

ANSWER:
True
KEYWORDS: interquartile range, measure of variation


58. True or False: The interquartile range is a measure of central tendency in a set of data.

ANSWER:
False
KEYWORDS: interquartile range, measure of variation

59. True or False: The geometric mean is a measure of variation or dispersion in a set of data.

ANSWER:
False
KEYWORDS: geometric mean, measure of central tendency

60. True or False: The geometric mean is useful in measuring the rate of change of a variable over time.

ANSWER:
True
KEYWORDS: geometric mean

61. True or False: If a set of data is perfectly symmetrical, the arithmetic mean must be identical to the median.

ANSWER:
True
KEYWORDS: shape, arithmetic mean, median

62. True or False: The coefficient of variation is a measure of relative variation.
ANSWER:
True

63. True or False: If the data set is approximately bell-shaped, the empirical rule will more accurately reflect the
greater concentration of data close to the mean, as compared to the Bienayme-Chebyshev rule.

ANSWER:
True
KEYWORDS: empirical rule, Bienayme-Chebyshev rule, normal distribution


64. If the arithmetic mean of a numerical data set exceeds the median, the data are considered to be _______
skewed.

ANSWER:
positive or right
KEYWORDS: shape, arithmetic mean, median

TABLE 3-2

The data below represent the amount of grams of carbohydrates in a serving of breakfast cereal.

11 15 23 29 19 22 21 20 15 25 17

65. Referring to Table 3-2, the arithmetic mean carbohydrates in this sample is ________ grams.

ANSWER:
217/11 = 19.73

66. Referring to Table 3-2, the median carbohydrate amount in the cereal is ________ grams.

ANSWER:
20
KEYWORDS: median

67. Referring to Table 3-2, the first quartile of the carbohydrate amounts is ________ grams.

ANSWER:
15
KEYWORDS: quartiles

68. Referring to Table 3-2, the third quartile of the carbohydrate amounts is ________ grams.

ANSWER:
23
KEYWORDS: quartiles

69. Referring to Table 3-2, the range in the carbohydrate amounts is ________ grams.

ANSWER:
18
KEYWORDS: range


70. Referring to Table 3-2, the interquartile range in the carbohydrate amounts is ________ grams.

ANSWER:
8

71. Referring to Table 3-2, the variance of the carbohydrate amounts is ________ (grams squared).

ANSWER:
26.02
KEYWORDS: variance

72. Referring to Table 3-2, the standard deviation of the carbohydrate amounts is ________ grams.

ANSWER:
5.10

73. Referring to Table 3-2, the coefficient of variation of the carbohydrate amounts is ________ percent.

ANSWER:
25.86%

74. Referring to Table 3-2, the five-number summary of the carbohydrate amounts consists of ________, ________,
________, ________, ________.

ANSWER:
11, 15, 20, 23, 29


75. Referring to Table 3-2, construct a box-and-whisker plot for the carbohydrate amounts.

ANSWER:


ANSWER:
Slightly positive or right-skewed
KEYWORDS: shape

TABLE 3-3

The stem-and-leaf display below represents the number of vitamin supplements sold by a health food store in a
sample of 16 days.
Stem Leaves
1 99
2 0023567
3 034568
4 1

Note: For this sample, the sum of the observations is 448, the sum of the squares of the observations is
13,356, and the sum of the squared differences between each observation and the mean is 812.

77. Referring to Table 3-3, the arithmetic mean of the number of vitamin supplements sold in this sample is
________.

ANSWER:
28

Box-and-whisker Plot

10 15 20 25 30

78. Referring to Table 3-3, the first quartile of the number of vitamin supplements sold in this sample is ________.

ANSWER:
20
KEYWORDS: quartiles

79. Referring to Table 3-3, the third quartile of the number of vitamin supplements sold in this sample is ________.

ANSWER:
35
KEYWORDS: quartiles

80. Referring to Table 3-3, the median number of vitamin supplements sold in this sample is ________.

ANSWER:
26.5
KEYWORDS: median

81. Referring to Table 3-3, the range of the number of vitamin supplements sold in this sample is ________.

ANSWER:
22
KEYWORDS: range

82. Referring to Table 3-3, the interquartile range of the number of vitamin supplements sold in this sample is
________.

ANSWER:
15

83. Referring to Table 3-3, the variance of the number of vitamin supplements sold in this sample is ________.

ANSWER:
54.1
KEYWORDS: variance


84. Referring to Table 3-3, the standard deviation of the number of vitamin supplements sold in this sample is
________.

ANSWER:
7.4

85. Referring to Table 3-3, the coefficient of variation of the number of vitamin supplements sold in this sample is
________ percent.

ANSWER:
26.3

86. Referring to Table 3-3, the five-number summary of the data in this sample consists of ________, ________,
________, ________, ________.

ANSWER:
19, 20, 26.5, 35, 41

87. Referring to Table 3-3, construct a box-and-whisker plot for the data in this sample.

ANSWER:



10 20 30 40


ANSWER:
Slightly positive or right-skewed.
KEYWORDS: shape

TABLE 3-4

The stem-and-leaf display below represents the number of cargo manifests approved by customs inspectors of the
Port of New York in a sample of 35 days.
Stem Leaves
1 67889
2 00111222233334445566678899
3 1122

Note: For this sample, the sum of the observations is 838, the sum of the squares of the observations is
20,684, and the sum of the squared differences between each observation and the mean is 619.89.

89. Referring to Table 3-4, the arithmetic mean of the customs data is ________.

ANSWER:
23.9

90. Referring to Table 3-4, the median of the customs data is ________.

ANSWER:
23
KEYWORDS: median

91. Referring to Table 3-4, the first quartile of the customs data is ________.

ANSWER:
21
KEYWORDS: quartiles

92. Referring to Table 3-4, the third quartile of the customs data is ________.

ANSWER:
27
KEYWORDS: quartiles


93. Referring to Table 3-4, the range of the customs data is ________.

ANSWER:
16
KEYWORDS: range

94. Referring to Table 3-4, the interquartile range of the customs data is ________.

ANSWER:
6

95. Referring to Table 3-4, the variance of the customs data is ________.

ANSWER:
18.2
KEYWORDS: variance

96. Referring to Table 3-4, the standard deviation of the customs data is ________.

ANSWER:
4.3

97. Referring to Table 3-4, the coefficient of variation of the customs data is ________ percent.

ANSWER:
17.8

98. Referring to Table 3-4, the five-number summary for the data in the customs sample consists of ________,
________, ________, ________, ________.

ANSWER:
16, 21, 23, 27, 32


99. Referring to Table 3-4, construct a box-and-whisker plot of this sample.

ANSWER:

TABLE 3-5

The rates of return of a Fortune 500 company over the last 5 years are: 3.17%, 4.43%, 5.93%, 5.43%, 7.29%,
8.21%, 6.23%, 5.23%, 4.34%, 6.68%, 7.14%, -5.56%, -5.23%, -5.73%, -10.34%.

100. Referring to Table 3-5, compute the arithmetic mean rate of return.

ANSWER:
2.48%

101. Referring to Table 3-5, compute the geometric mean rate of return.

ANSWER:
2.31%
TYPE: PR DIFFICULTY: moderate
KEYWORDS: geometric mean rate of return

102. Referring to Table 3-5, what is the range of the rate of return?

ANSWER:
18.55%
KEYWORDS: range


10 15 20 25 30 35

103. Referring to Table 3-5, construct a box-and-whisker plot for the rate of return.

ANSWER:

104. Referring to Table 3-5, what is the shape of the distribution for the rate of return?

ANSWER:
Left-skewed
KEYWORDS: shape

TABLE 3-6

The rates of return of an Internet Service Provider over a 10 year period are: 10.25%, 12.64%, 8.37%, 9.29%,
6.23%, 42.53%, 29.23%, 15.25%, 21.52%, -2.35%.

105. Referring to Table 3-6, compute the arithmetic mean rate of return.

ANSWER:
15.30%

106. Referring to Table 3-6, compute the geometric mean rate of return.

ANSWER:
14.68%
KEYWORDS: geometric mean rate of return


-0.15 -0.1 -0.05 0 0.05 0.1

107. Referring to Table 3-6, construct a box-and-whisker plot for the rate of return.

ANSWER:

108. Referring to Table 3-6, what is the shape of the distribution for the rate of return?

ANSWER:
Right-skewed
KEYWORDS: shape

-0.1 0 0.1 0.2 0.3 0.4 0.5

CHAPTER 4: BASIC PROBABILITY

1. If two events are collectively exhaustive, what is the probability that one or the other occurs?
a) 0
b) 0.50
c) 1.00
d) Cannot be determined from the information given.

ANSWER:
c
KEYWORDS: collectively exhaustive

2. If two events are collectively exhaustive, what is the probability that both occur at the same time?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
KEYWORDS: collectively exhaustive, mutually exclusive
EXPLANATION: We do not know if they are mutually exclusive.

3. If two events are mutually exclusive, what is the probability that one or the other occurs?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
TYPE: MC DIFFICULTY: moderate
EXPLANATION: We do not know if they are collectively exhaustive.

4. If two events are mutually exclusive, what is the probability that both occur at the same time?
a) 0
b) 0.50
c) 1.00

ANSWER:
a
KEYWORDS: mutually exclusive

5. If two events are mutually exclusive and collectively exhaustive, what is the probability that both occur?
a) 0
b) 0.50
c) 1.00

ANSWER:
a
KEYWORDS: collective exhaustive, mutually exclusive

6. If two events are mutually exclusive and collectively exhaustive, what is the probability that one or the other
occurs?
a) 0
b) 0.50
c) 1.00
a) Cannot be determined from the information given.

ANSWER:
c

7. If events A and B are mutually exclusive and collectively exhaustive, what is the probability that event A
occurs?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
EXPLANATION: We do not know if they are equally likely events.

8. If two equally likely events A and B are mutually exclusive and collectively exhaustive, what is the probability
that event A occurs?
a) 0
b) 0.50
c) 1.00

ANSWER:
b
TYPE: MC DIFFICULTY: easy


9. If two equally likely events A and B are mutually exclusive, what is the probability that event A occurs?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
EXPLANATION: We do not know if they are collectively exhaustive.

10. If two equally likely events A and B are collectively exhaustive, what is the probability that event A occurs?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
EXPLANATION: We do not know if they are mutually exclusive.

11. Selection of raffle tickets from a large bowl is an example of
a) sampling with replacement.
b) sampling without replacement.
c) subjective probability.

ANSWER:
b
KEYWORDS: sampling with replacement, sampling without replacement

12. If two events are independent, what is the probability that they both occur?
a) 0
b) 0.50
c) 1.00

ANSWER:
d
KEYWORDS: statistical independence


13. If the outcome of event A is not affected by event B, then events A and B are said to be
a) mutually exclusive.
b) statistically independent.
c) collectively exhaustive.

ANSWER:
b
KEYWORDS: statistical independence

14. If event A and event B cannot occur at the same time, then events A and B are said to be

ANSWER:
a

15. If either event A or event B must occur, then events A and B are said to be

ANSWER:
c
KEYWORDS: collectively exhaustive

16. The collection of all possible events is called
a) a simple probability.
b) a sample space.
c) a joint probability.
d) the null set.

ANSWER:
b
KEYWORDS: sample space


17. All the events in the sample space that are not part of the specified event are called
a) simple events.
b) joint events.
c) the sample space.
d) the complement of the event.

ANSWER:
d
KEYWORDS: sample space, complement

18. Simple probability is also called
a) marginal probability.
b) joint probability.
c) conditional probability.
d) Bayes' theorem.

ANSWER:
a
KEYWORDS: marginal probability

19. When using the general multiplication rule, P(A and B) is equal to
a) P(A|B)P(B).
b) P(A)P(B).
c) P(B)/P(A).
d) P(A)/P(B).

ANSWER:
a
KEYWORDS: multiplication rule

20. A business venture can result in the following outcomes (with their corresponding chance of occurring in
parentheses): Highly Successful (10%), Successful (25%), Break Even (25%), Disappointing (20%), and Highly
Disappointing (?). If these are the only outcomes possible for the business venture, what is the chance that the
business venture will be considered Highly Disappointing?
a) 10%
b) 15%
c) 20%
d) 25%

ANSWER:
c


21. A recent survey of banks revealed the following distribution for the interest rate being charged on a home loan
(based on a 30-year mortgage with a 10% down payment).

Interest Rate 7.0% 7.5% 8.0% 8.5% > 8.5%
Probability 0.12 0.23 0.24 0.35 0.06

If a bank is selected at random from this distribution, what is the chance that the interest rate charged on a home
loan will exceed 8.0%?
a) 0.06
b) 0.41
c) 0.59
d) 1.00

ANSWER:
b
KEYWORDS: marginal probability, addition rule

22. The employees of a company were surveyed on questions regarding their educational background and marital
status. Of the 600 employees, 400 had college degrees, 100 were single, and 60 were single college graduates.
The probability that an employee of the company is single or has a college degree is:
a) 0.10.
b) 0.25.
c) 0.667.
d) 0.733.

ANSWER:
d
KEYWORDS: addition rule

The probability that an employee of the company is married and has a college degree is:
a) 40/600.
b) 340/600.
c) 400/600.
d) 500/600.

ANSWER:
b
KEYWORDS: joint probability


The probability that an employee of the company does not have a college degree is:
a) 0.10.
b) 0.33.
c) 0.67.
d) 0.75.

ANSWER:
b
KEYWORDS: complement

25. The probability that house sales will increase in the next 6 months is estimated to be 0.25. The probability that
the interest rates on housing loans will go up in the same period is estimated to be 0.74. The probability that
house sales or interest rates will go up during the next 6 months is estimated to be 0.89. The probability that
both house sales and interest rates will increase during the next 6 months is:
a) 0.10.
b) 0.185.
c) 0.705.
d) 0.90.

ANSWER:
a
KEYWORDS: joint probability

neither house sales nor interest rates will increase during the next 6 months is:
a) 0.11.
b) 0.195.
c) 0.89.
d) 0.90.

ANSWER:
a
KEYWORDS: joint probability, complement


house sales will increase but interest rates will not during the next 6 months is:
a) 0.065.
b) 0.15.
c) 0.51.
d) 0.89.

ANSWER:
b
KEYWORDS: joint probability, complement

house sales or interest rates will go up during the next 6 months is estimated to be 0.89. The events of increase
in house sales and increase in interest rates in the next 6 months are
a) statistically independent.
b) mutually exclusive.

ANSWER:
d
KEYWORDS: joint probability, statistical independence
EXPLANATION: They are not statistically independent.

house sales or interest rates will go up during the next 6 months is estimated to be 0.89. The events of increase
in house sales and no increase in house sales in the next 6 months are
a) statistically independent.
d) (b) and (c)

ANSWER:
d
KEYWORDS: mutually exclusive, collectively exhaustive, complement


30. The probability that a new advertising campaign will increase sales is assessed as being 0.80. The probability
that the cost of developing the new ad campaign can be kept within the original budget allocation is 0.40.
Assuming that the two events are independent, the probability that the cost is kept within budget and the
campaign will increase sales is:
a) 0.20.
b) 0.32.
c) 0.40.
d) 0.88.

ANSWER:
b
KEYWORDS: statistical independence, joint probability, multiplication rule

Assuming that the two events are independent, the probability that the cost is kept within budget or the
a) 0.20.
b) 0.32.
c) 0.68.
d) 0.88.

ANSWER:
d
KEYWORDS: statistical independence, multiplication rule, addition rule

Assuming that the two events are independent, the probability that the cost is not kept within budget or the
campaign will not increase sales is:
a) 0.12.
b) 0.32.
c) 0.68.
d) 0.88.

ANSWER:
c
KEYWORDS: statistical independence, multiplication rule, addition rule, complement


Assuming that the two events are independent, the probability that neither the cost is kept within budget nor the
a) 0.12.
b) 0.32.
c) 0.68.
d) 0.88.

ANSWER:
a
KEYWORDS: statistical independence, multiplication rule, joint probability, complement

34. According to a survey of American households, the probability that the residents own 2 cars if annual household
income is over $25,000 is 80%. Of the households surveyed, 60% had incomes over $25,000 and 70% had 2
cars. The probability that the residents of a household own 2 cars and have an income over $25,000 a year is:
a) 0.12.
b) 0.18.
c) 0.22.
d) 0.48.

ANSWER:
d
KEYWORDS: joint probability, conditional probability

cars. The probability that the residents of a household do not own 2 cars and have an income over $25,000 a
year is:
a) 0.12.
b) 0.18.
c) 0.22.
d) 0.48.

ANSWER:
a
KEYWORDS: joint probability, complement, multiplication rule, conditional probability


cars. The probability that the residents of a household own 2 cars and have an income less than or equal to
$25,000 a year is:
a) 0.12.
b) 0.18.
c) 0.22.
d) 0.48.

ANSWER:
c
KEYWORDS: joint probability, complement, multiplication rule, conditional probability

cars. The probability that annual household income is over $25,000 if the residents of a household own 2 cars is:
a) 0.42.
b) 0.48.
c) 0.50.
d) 0.69.

ANSWER:
d
KEYWORDS: conditional probability, Bayes theorem

cars. The probability that annual household income is over $25,000 if the residents of a household do not own 2
cars is:
a) 0.12.
b) 0.18.
c) 0.40.
d) 0.70.

ANSWER:
c
KEYWORDS: conditional probability, complement, Bayes theorem


cars. The probability that the residents do not own 2 cars if annual household income is not over $25,000 is:
a) 0.12.
b) 0.18.
c) 0.45.
d) 0.70.

ANSWER:
c
KEYWORDS: conditional probability, complement

40. A company has 2 machines that produce widgets. An older machine produces 23% defective widgets, while the
new machine produces only 8% defective widgets. In addition, the new machine produces 3 times as many
widgets as the older machine does. Given that a widget was produced by the new machine, what is the
probability it is not defective?
a) 0.06
b) 0.50
c) 0.92
d) 0.94

ANSWER:
c
KEYWORDS: conditional probability, complement

widgets as the older machine does. What is the probability that a randomly chosen widget produced by the
company is defective?
a) 0.078
b) 0.1175
c) 0.156
d) 0.310

ANSWER:
b


widgets as the older machine does. Given that a randomly chosen widget was tested and found to be defective,
what is the probability it was produced by the new machine?

a) 0.08
b) 0.15
c) 0.489
d) 0.511

ANSWER:
d

TABLE 4-1

Mothers Against Drunk Driving is a very visible group whose main focus is to educate the public about the harm
caused by drunk drivers. A study was recently done that emphasized the problem we all face with drinking and
driving. Four hundred accidents that occurred on a Saturday night were analyzed. Two items noted were the
number of vehicles involved and whether alcohol played a role in the accident. The numbers are shown below:

Number of Vehicles
Involved

Did alcohol play a role? 1 2 3 Totals
Yes 50 100 20 170
No 25 175 30 230
Totals 75 275 50 400

43. Referring to Table 4-1, what proportion of accidents involved more than one vehicle?
a) 50/400
b) 75/400
c) 275/400
d) 325/400

ANSWER:
d
KEYWORDS: contingency table, empirical classical probability, addition rule


44. Referring to Table 4-1, what proportion of accidents involved alcohol and a single vehicle?
a) 25/400
b) 50/400
c) 195/400
d) 245/400

ANSWER:
b
KEYWORDS: contingency table, empirical classical probability, joint probability

45. Referring to Table 4-1, what proportion of accidents involved alcohol or a single vehicle?
a) 25/400
b) 50/400
c) 195/400
d) 245/400

ANSWER:
c

46. Referring to Table 4-1, given alcohol was involved, what proportion of accidents involved a single vehicle?
a) 50/75
b) 50/170
c) 120/170
d) 120/400

ANSWER:
b
KEYWORDS: contingency table, empirical classical probability, marginal probability

47. Referring to Table 4-1, given that multiple vehicles were involved, what proportion of accidents involved
alcohol?
a) 120/170
b) 120/230
c) 120/325
d) 120/400

ANSWER:
c
KEYWORDS: contingency table, empirical classical probability, conditional probability, addition rule


48. Referring to Table 4-1, given that 3 vehicles were involved, what proportion of accidents involved alcohol?
a) 20/30
b) 20/50
c) 20/170
d) 20/400

ANSWER:
b
KEYWORDS: contingency table, empirical classical probability, conditional probability

49. Referring to Table 4-1, given that alcohol was not involved, what proportion of the accidents were single
vehicle?
a) 50/75
b) 25/230
c) 50/170
d) 25/75

ANSWER:
b
KEYWORDS: contingency table, empirical classical probability, conditional probability, complement

50. Referring to Table 4-1, given that alcohol was not involved, what proportion of the accidents were multiple
vehicle?
a) 50/170
b) 120/170
c) 205/230
d) 25/230

ANSWER:
c
KEYWORDS: contingency table, empirical classical probability, conditional probability, complement


TABLE 4-2

An alcohol awareness task force at a Big Ten university sampled 200 students after the midterm to ask them
whether they went bar hopping the weekend before the midterm or spent the weekend studying, and whether they
did well or poorly on the midterm. The following result was obtained.

Did Well on Midterm Did Poorly on Midterm
Studying for Exam 80 20
Went Bar Hopping 30 70

51. Referring to Table 4-2, what is the probability that a randomly selected student who went bar hopping will do
well on the midterm?
a. 30/100
b. 30/110
c. 30/200
d. (100/200)*(110/200)

ANSWER:
a
KEYWORDS: contingency table, empirical classical probability, conditional probability

52. Referring to Table 4-2, what is the probability that a randomly selected student did well on the midterm or went
bar hopping the weekend before the midterm?
a) 30/200
b) (80+30)/200
c) (30+70)/200
d) (80+30+70)/200

ANSWER:
d

53. Referring to Table 4-2, what is the probability that a randomly selected student did well on the midterm and also
went bar hopping the weekend before the midterm?
a) 30/200
b) (80+30)/200
c) (30+70)/200
d) (80+30+70)/200

ANSWER:
a
KEYWORDS: contingency table, empirical classical probability, joint probability


54. Referring to Table 4-2, the events "Did Well on Midterm" and "Studying for Exam" are
a) statistically dependent.
c) collective exhaustive.

ANSWER:
a
KEYWORDS: contingency table, empirical classical probability, statistical independence, joint probability

55. Referring to Table 4-2, the events "Did Well on Midterm" and "Studying for Exam" are
a) not statistically dependent.
b) not mutually exclusive.

ANSWER:
b
KEYWORDS: contingency table, empirical classical probability, mutually exclusive, joint probability

56. Referring to Table 4-2, the events "Did Well on Midterm" and "Did Poorly on Midterm" are
a) statistically dependent.
d) all of the above

ANSWER:
d
KEYWORDS: contingency table, empirical classical probability, statistical independence, mutually exclusive,
collective exhaustive, joint probability

57. True or False: When A and B are mutually exclusive, P(A or B) can be found by adding P(A) and P(B).

ANSWER:
True
KEYWORDS: mutually exclusive, addition rule

58. True or False: The collection of all the possible events is called a sample space.

ANSWER:
True
KEYWORDS: sample space

59. True or False: If A and B cannot occur at the same time, they are called mutually exclusive.

ANSWER:
True


60. True or False: If either A or B must occur, they are called mutually exclusive.

ANSWER:
False
KEYWORDS: mutually exclusive, collective exhaustive

61. True or False: If either A or B must occur, they are called collectively exhaustive.

ANSWER:
True
KEYWORDS: collective exhaustive

62. True or False: If P(A) = 0.4 and P(B) = 0.6, then A and B must be collectively exhaustive.

ANSWER:
False
KEYWORDS: collective exhaustive, mutually exclusive

63. True or False: If P(A) = 0.4 and P(B) = 0.6, then A and B must be mutually exclusive.

ANSWER:
False

64. True or False: If P(A or B) = 1.0, then A and B must be mutually exclusive.

ANSWER:
False

65. True or False: If P(A or B) = 1.0, then A and B must be collectively exhaustive.

ANSWER:
True


66. True or False: If P(A and B) = 0, then A and B must be mutually exclusive.

ANSWER:
True

67. True or False: If P(A and B) = 0, then A and B must be collectively exhaustive.

ANSWER:
False

68. True or False: If P(A and B) = 1, then A and B must be collectively exhaustive.

ANSWER:
True

69. True or False: If P(A and B) = 1, then A and B must be mutually exclusive.

ANSWER:
False

70. Suppose A and B are independent events where P(A) = 0.4 and P(B) = 0.5. Then P(A and B) = __________.

ANSWER:
0.2
KEYWORDS: statistical independence, multiplication rule

71. Suppose A and B are mutually exclusive events where P(A) = 0.4 and P(B) = 0.5. Then P(A and B) =
__________.

ANSWER:
0
KEYWORDS: mutually exclusive, joint probability, multiplication rule


72. Suppose A and B are mutually exclusive events where P(A) = 0.4 and P(B) = 0.5. Then P(A or B) =
__________.

ANSWER:
0.9
KEYWORDS: mutually exclusive, addition rule

73. Suppose A and B are independent events where P(A) = 0.4 and P(B) = 0.5. Then P(A or B) = __________.

ANSWER:
0.7
KEYWORDS: statistical independence, addition rule

74. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P(A and B) = 0.1. Then P(A or B) =
__________.

ANSWER:
0.8

75. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P(A and B) = 0.1. Then P(A|B) = __________.

ANSWER:
0.2
KEYWORDS: conditional probability

76. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P(A and B) = 0.1. Then P(B|A) = __________.

ANSWER:
0.25


TABLE 4-3

A survey is taken among customers of a fast-food restaurant to determine preference for hamburger or chicken. Of
200 respondents selected, 75 were children and 125 were adults. 120 preferred hamburger and 80 preferred chicken.
55 of the children preferred hamburger.

77. Referring to Table 4-3, the probability that a randomly selected individual is an adult is __________.

ANSWER:
125/200
KEYWORDS: empirical classical probability, conditional probability, marginal probability

78. Referring to Table 4-3, the probability that a randomly selected individual is an adult or a child is __________.

ANSWER:
200/200
KEYWORDS: empirical classical probability, addition rule

79. Referring to Table 4-3, the probability that a randomly selected individual is a child and prefers chicken is
__________.

ANSWER:
20/200
KEYWORDS: empirical classical probability, joint probability, multiplication rule

80. Referring to Table 4-3, the probability that a randomly selected individual is an adult and prefers chicken is
__________.

ANSWER:
60/200
KEYWORDS: empirical classical probability, joint probability, multiplication rule

81. Referring to Table 4-3, the probability that a randomly selected individual is a child or prefers hamburger is
__________.

ANSWER:
140/200
KEYWORDS: empirical classical probability, addition rule


82. Referring to Table 4-3, assume we know the person is a child. The probability that this individual prefers
hamburger is __________.

ANSWER:
55/75
KEYWORDS: empirical classical probability, conditional probability

83. Referring to Table 4-3, assume we know that a person has ordered chicken. The probability that this individual
is an adult is __________.

ANSWER:
60/80
KEYWORDS: empirical classical probability, conditional probability, Bayes theorem

84. Referring to Table 4-3, assume we know that a person has ordered hamburger. The probability that this
individual is a child is __________.

ANSWER:
55/120
KEYWORDS: empirical classical probability, conditional probability, Bayes theorem

TABLE 4-4

Suppose that patrons of a restaurant were asked whether they preferred beer or whether they preferred wine. 70%
said that they preferred beer. 60% of the patrons were male. 80% of the males preferred beer.

85. Referring to Table 4-4, the probability that a randomly selected patron prefers wine is __________.

ANSWER:
0.30
KEYWORDS: addition rule, multiplication rule, marginal probability

86. Referring to Table 4-4, the probability that a randomly selected patron is a female is __________.

ANSWER:
0.40
KEYWORDS: addition rule, multiplication rule, marginal probability


87. Referring to Table 4-4, the probability that a randomly selected patron is a female who prefers wine is
__________.

ANSWER:
0.18
KEYWORDS: addition rule, multiplication rule, joint probability

88. Referring to Table 4-4, the probability that a randomly selected patron is a female who prefers beer is
__________.

ANSWER:
0.22
KEYWORDS: addition rule, multiplication rule, joint probability

89. Referring to Table 4-4, suppose a randomly selected patron prefers wine. The probability that the patron is a
male is __________.

ANSWER:
0.40
KEYWORDS: addition rule, multiplication rule, conditional probability

90. Referring to Table 4-4, suppose a randomly selected patron prefers beer. The probability that the patron is a
male is __________.

ANSWER:
0.69

91. Referring to Table 4-4, suppose a randomly selected patron is a female. The probability that the patron prefers
beer is __________.

ANSWER:
0.55

92. True or False: Referring to Table 4-4, the two events "liking" beer and "liking" wine are statistically
independent.

ANSWER:
False
KEYWORDS: addition rule, multiplication rule, statistical independence


93. True or False: Referring to Table 4-4, the two events "liking" beer and being a male are statistically
independent.

ANSWER:
False
KEYWORDS: addition rule, multiplication rule, statistical independence

TABLE 4-5

In a meat packaging plant, Machine A accounts for 60% of the plant's output, while Machine B accounts for 40% of
the plant's output. In total, 4% of the packages are improperly sealed. Also, 3% of the packages are from Machine
A and are improperly sealed.

94. Referring to Table 4-5, if a package is selected at random, the probability that it will be properly sealed is
________.

ANSWER:
0.96
KEYWORDS: addition rule, marginal probability

95. Referring to Table 4-5, if a package selected at random is improperly sealed, the probability that it came from
Machine A is ________.

ANSWER:
0.75

96. Referring to Table 4-5, if a package selected at random came from Machine A, the probability that it is
improperly sealed is ________.

ANSWER:
0.05

97. Referring to Table 4-5, if a package selected at random came from Machine B, the probability that it is properly
sealed is ________.

ANSWER:
0.975
KEYWORDS: conditional probability, complement, addition rule


98. Referring to Table 4-5, if a package selected at random came from Machine B, the probability that it is
improperly sealed is ________.

ANSWER:
0.025
KEYWORDS: conditional probability, complement, addition rule

TABLE 4-6

At a Texas college, 60% of the students are from the southern part of the state, 30% are from the northern part of the
state, and the remaining 10% are from out of state. All students must take and pass an Entry Level Math (ELM) test.
60% of the southerners have passed the ELM, 70% of the northerners have passed the ELM, and 90% of the out-of-
staters have passed the ELM.

99. Referring to Table 4-6, the probability that a randomly selected student is someone from northern Texas who
has not passed the ELM is ________.

ANSWER:
0.09
KEYWORDS: joint probability, multiplication rule

100. Referring to Table 4-6, the probability that a randomly selected student has passed the ELM is ________.

ANSWER:
0.66
KEYWORDS: marginal probability, multiplication rule, addition rule

101. Referring to Table 4-6, if a randomly selected student has passed the ELM, the probability that the student is
from out of state is ________.

ANSWER:
0.136

102. Referring to Table 4-6, if a randomly selected student has not passed the ELM, the probability that the student
is from southern Texas is ________.

ANSWER:
0.706
KEYWORDS: conditional probability, complement, Bayes theorem


103. Referring to Table 4-6, the probability that a randomly selected student is not from southern Texas and has
not passed the ELM is ________.

ANSWER:
0.10
KEYWORDS: joint probability, complement, multiplication rule, addition

104. Referring to Table 4-6, if a randomly selected student has not passed the ELM, the probability that the student
is not from northern Texas is ________.

ANSWER:
0.735
KEYWORDS: conditional probability, complement, addition rule, multiplication rule, Bayes theorem

105. Referring to Table 4-6, if a randomly selected student is not from southern Texas, the probability that the
student has not passed the ELM is ________.

ANSWER:
0.25

106. Referring to Table 4-6, if a randomly selected student is not from out of state, the probability that the student
has passed the ELM is ________.

ANSWER:
0.633


TABLE 4-7

The next state lottery will have the following payoffs possible with their associated probabilities.
Payoff Probability
$2.00 0.0500
$25.00 0.0100
$100.00 0.0050
$500.00 0.0010
$5,000.00 0.0005
$10,000.00 0.0001
You buy a single ticket.

107. Referring to Table 4-7, the probability that you win any money is ________.

ANSWER:
0.0666

108. Referring to Table 4-7, the probability that you win at least $100.00 is ________.

ANSWER:
0.0066

109. Referring to Table 4-7, if you have a winning ticket, the probability that you win at least $100.00 is
________.

ANSWER:
0.1
KEYWORDS: conditional probability, addition rule

110. A new model car from Ford Motor Company offers a keyless entry system that utilizes a four-letter code.
How many different possible combinations are there for the code?

ANSWER:
456976
KEYWORDS: counting rule

111. At the International Pancakes Hut, there are 4 different ways to have an egg cooked, 7 different choices of
pancakes, 5 different types of syrups and 8 different beverages. How many different ways are there to order an
egg, a pancake with a choice of syrup, and a beverage?

ANSWER:
1120
KEYWORDS: counting rule

112. There are 10 finalists at a national dog show. How many different orders of finishing can there be for all the
10 finalists?

ANSWER:

3628800
KEYWORDS: counting rule, permutation

113. Eleven freshmen are to be assigned to eleven empty rooms in a student dormitory. Each room is considered
unique, so that it matters who is being assigned to which room. How many different ways can those eleven
freshmen be allocated?

ANSWER:
39916800

114. There are only 4 empty rooms available in a student dormitory for eleven new freshmen. Each room is
considered unique, so that it matters who is being assigned to which room. How many different ways can those
4 empty rooms be filled?

ANSWER:
7920

115. There are only 4 empty rooms available in a student dormitory for eleven new freshmen. All the rooms are
considered homogenous, so that it does not matter who is being assigned to which room. How many different
ways can those 4 empty rooms be filled?

ANSWER:
330
KEYWORDS: counting rule, combination

116. Four freshmen are to be assigned to eleven empty rooms in a student dormitory. All the rooms are considered
homogenous, so that it does not matter who is being assigned to which room. How many different ways can
those 4 freshmen be assigned?

ANSWER:
330


117. There are 47 contestants at a national dog show. How many different top three finishes can there be?

ANSWER:
97290

118. Seven passengers are on a waiting list for an overbooked flight. As a result of cancellations, 3 seats become
available. How many different ways can those 3 available seats be filled, regardless of the order?

ANSWER:
35

119. A high school debate team of 4 is to be chosen from a class of 35. How many possible ways can the team be
formed?

ANSWER:
52360

120. A debate team of 4 is to be chosen from a class of 35. There are two twin brothers in the class. How many
possible ways can the team be formed which will include only one of the twin brothers?

ANSWER:
10912

possible ways can the team be formed which will not include either of the twin brothers?

ANSWER:
40920

possible ways can the team be formed which will include both of the twin brothers?

ANSWER:
528

123. An exploration team of 2 women and 3 men is to be chosen from a candidate pool of 6 women and 7 men.
How many different ways can this team of 5 be formed?

ANSWER:
525


124. Twelve students in a Business Statistics class are to be formed into three teams of four. How many different
ways can this be done?

ANSWER:
5775
TYPE: PR DIFFICULTY: Difficult
EXPLANATION: ( ) ( ) ( ) ( ) ( )
12!/ 4!8! 8!/ 4!4! / 3!

CHAPTER 5: SOME IMPORTANT DISCRETE PROBABILITY
DISTRIBUTIONS

125. Thirty-six of the staff of 80 teachers at a local intermediate school are certified in Cardio-Pulmonary
Resuscitation (CPR). In 180 days of school, about how many days can we expect that the teacher on bus duty
will likely be certified in CPR?
a) 5 days
b) 45 days
c) 65 days
d) 81 days

ANSWER:
d
KEYWORDS: binomial distribution, mean

126. A campus program evenly enrolls undergraduate and graduate students. If a random sample of 4
students is selected from the program to be interviewed about the introduction of a new fast food outlet on the
ground floor of the campus building, what is the probability that all 4 students selected are undergraduate
students?
a) 0.0256
b) 0.0625
c) 0.16
d) 1.00

ANSWER:
b
KEYWORDS: binomial distribution

127. A probability distribution is an equation that
a) associates a particular probability of occurrence with each outcome in the sample space.
b) measures outcomes and assigns values of X to the simple events.
c) assigns a value to the variability in the sample space.
d) assigns a value to the center of the sample space.

ANSWER:
a
KEYWORDS: probability distribution


128. The connotation "expected value" or "expected gain" from playing roulette at a casino means
a) the amount you expect to "gain" on a single play.
b) the amount you expect to "gain" in the long run over many plays.
c) the amount you need to "break even" over many plays.
d) the amount you should expect to gain if you are lucky.

ANSWER:
b
KEYWORDS: expected value

129. Which of the following about the binomial distribution is not a true statement?
a) The probability of success must be constant from trial to trial.
b) Each outcome is independent of the other.
c) Each outcome may be classified as either "success" or "failure."
d) The random variable of interest is continuous.

ANSWER:
d
KEYWORDS: binomial distribution, properties

130. In a binomial distribution
a) the random variable X is continuous.
b) the probability of success p is stable from trial to trial.
c) the number of trials n must be at least 30.
d) the results of one trial are dependent on the results of the other trials.

ANSWER:
b

131. Whenever p = 0.5, the binomial distribution will
a) always be symmetric.
b) be symmetric only if n is large.
c) be right-skewed.
d) be left-skewed.

ANSWER:
a


132. Whenever p = 0.1 and n is small, the binomial distribution will be
a) symmetric.
b) right-skewed.
c) left-skewed.
d) None of the above.

ANSWER:
b

133. If n = 10 and p = 0.70, then the mean of the binomial distribution is
a) 0.07
b) 1.45.
c) 7.00
d) 14.29

ANSWER:
c

134. If n = 10 and p = 0.70, then the standard deviation of the binomial distribution is
a) 0.07
b) 1.45
c) 7.00
d) 14.29

ANSWER:
b
KEYWORDS: binomial distribution, standard deviation

135. If the outcomes of a random variable follow a Poisson distribution, then their
a) mean equals the standard deviation.
b) median equals the standard deviation.
c) mean equals the variance.
d) median equals the variance.

ANSWER:
c
KEYWORDS: Poisson distribution, mean, standard deviation, properties


136. What type of probability distribution will the consulting firm most likely employ to analyze the
insurance claims in the following problem?
An insurance company has called a consulting firm to determine if the company has an unusually high
number of false insurance claims. It is known that the industry proportion for false claims is 3%. The
consulting firm has decided to randomly and independently sample 100 of the companys insurance claims.
They believe the number of these 100 that are false will yield the information the company desires.
a) binomial distribution.
b) Poisson distribution.
c) hypergeometric distribution.
d) none of the above.

ANSWER:
a

137. The covariance
a) must be between -1 and +1.
b) must be positive.
c) can be positive or negative.
d) must be less than +1.

ANSWER:
c
KEYWORDS: covariance, properties

138. What type of probability distribution will most likely be used to analyze warranty repair needs on new
cars in the following problem?
The service manager for a new automobile dealership reviewed dealership records of the past 20 sales of
new cars to determine the number of warranty repairs he will be called on to perform in the next 90 days.
Corporate reports indicate that the probability any one of their new cars needs a warranty repair in the first
90 days is 0.05. The manager assumes that calls for warranty repair are independent of one another and is
interested in predicting the number of warranty repairs he will be called on to perform in the next 90 days
for this batch of 20 new cars sold.

ANSWER:
a


139. What type of probability distribution will most likely be used to analyze the number of chocolate chip
parts per cookie in the following problem?
The quality control manager of Marilyns Cookies is inspecting a batch of chocolate chip cookies. When the
production process is in control, the average number of chocolate chip parts per cookie is 6.0. The manager
is interested in analyzing the probability that any particular cookie being inspected has fewer than 5.0 chip
parts.

ANSWER:
b
KEYWORDS: Poisson distribution, properties

140. What type of probability distribution will most likely be used to analyze the number of cars with
defective radios in the following problem?
From an inventory of 48 new cars being shipped to local dealerships, corporate reports indicate that 12 have
defective radios installed. The sales manager of one dealership wants to predict the probability out of the 8
new cars it just received that, when each is tested, no more than 2 of the cars have defective radios.

ANSWER:
c
KEYWORDS: hypergeometric distribution, properties

141. A stock analyst was provided with a list of 25 stocks. He was expected to pick 3 stocks from the list
whose prices are expected to rise by more than 20% after 30 days. In reality, the prices of only 5 stocks would
rise by more than 20% after 30 days. If he randomly selected 3 stocks from the list, he would use what type of
probability distribution to compute the probability that all of the chosen stocks would appreciate more than 20%
after 30 days?

ANSWER:
c


142. A professor receives, on average, 24.7 e-mails from students the day before the midterm exam. To
compute the probability of receiving at least 10 e-mails on such a day, he will use what type of probability
distribution?

ANSWER:
b

143. A company has 125 personal computers. The probability that any one of them will require repair on a
given day is 0.025. To find the probability that exactly 20 of the computers will require repair on a given day,
one will use what type of probability distribution?

ANSWER:
a

144. The portfolio expected return of two investments
a) will be higher when the covariance is zero.
b) will be higher when the covariance is negative.
c) will be higher when the covariance is positive.
d) does not depend on the covariance.

ANSWER:
d
KEYWORDS: portfolio, mean

145. A financial analysis is presented with information on the past records of 60 start-up companies and told
that in fact only 3 of them have managed to become highly successful. He selected 3 companies from this
group as the candidates for success. To analyze his ability to spot the companies that will eventually become
highly successful, he will use what type of probability distribution?

ANSWER:
c

146. On the average, 1.8 customers per minute arrive at any one of the checkout counters of a grocery store.
What type of probability distribution can be used to find out the probability that there will be no customer
arriving at a checkout counter?


ANSWER:
b

147. A multiple-choice test has 30 questions. There are 4 choices for each question. A student who has not
studied for the test decides to answer all questions randomly. What type of probability distribution can be used
to figure out his chance of getting at least 20 questions right?

ANSWER:
a

148. A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts.
Suppose the mean cost of rats used in lab experiments turned out to be $13.00 per week. Interpret this value.
a) Most of the weeks resulted in rat costs of $13.00.
b) The median cost for the distribution of rat costs is $13.00.
c) The expected or average cost for all weekly rat purchases is $13.00.
d) The rat cost that occurs more often than any other is $13.00.

ANSWER:
c
KEYWORDS: mean

149. A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts.
Prices for 100 rats follow the following distribution:
Price: $10.00 $12.50 $15.00
Probability: 0.35 0.40 0.25
How much should the lab budget for next years rat orders be, assuming this distribution does not change?
a) $520
b) $637
c) $650
d) $780

ANSWER:
b
KEYWORDS: mean

150. The local police department must write, on average, 5 tickets a day to keep department revenues at
budgeted levels. Suppose the number of tickets written per day follows a Poisson distribution with a mean of 6.5
tickets per day. Interpret the value of the mean.
a) The number of tickets that is written most often is 6.5 tickets per day.
b) Half of the days have less than 6.5 tickets written and half of the days have more than 6.5 tickets
written.
c) If we sampled all days, the arithmetic average or expected number of tickets written would be 6.5
tickets per day.
d) The mean has no interpretation since 0.5 ticket can never be written.

ANSWER:
c
KEYWORDS: mean, Poisson distribution

151. True or False: The Poisson distribution can be used to model a continuous random variable.

ANSWER:
False

152. True or False: Another name for the mean of a probability distribution is its expected value.

ANSWER:
True
KEYWORDS: mean


153. True or False: The number of customers arriving at a department store in a 5-minute period has a
binomial distribution.

ANSWER:
False

154. True or False: The number of customers arriving at a department store in a 5-minute period has a
Poisson distribution.

ANSWER:
True

155. True or False: The number of males selected in a sample of 5 students taken without replacement from a
class of 9 females and 18 males has a binomial distribution.

ANSWER:
False

156. True or False: The number of males selected in a sample of 5 students taken without replacement from a
class of 9 females and 18 males has a hypergeometric distribution.

ANSWER:
True

157. True or False: The diameters of 10 randomly selected bolts have a binomial distribution.

ANSWER:
False

158. True or False: The largest value that a Poisson random variable X can have is n.

ANSWER:
False


159. True or False: In a Poisson distribution, the mean and standard deviation are equal.

ANSWER:
False

160. True or False: In a Poisson distribution, the mean and variance are equal.

ANSWER:
True

161. True or False: If p remains constant in a binomial distribution, an increase in n will increase the
variance.

ANSWER:
True

162. True or False: If p remains constant in a binomial distribution, an increase in n will not change the
mean.

ANSWER:
False

163. True or False: Suppose that a judges decisions follow a binomial distribution and that his verdict is
correct 90% of the time. In his next 10 decisions, the probability that he makes fewer than 2 incorrect verdicts is
0.736.

ANSWER:
True
KEYWORDS: binomial distribution, probability

164. True or False: Suppose that the number of airplanes arriving at an airport per minute is a Poisson
process. The average number of airplanes arriving per minute is 3. The probability that exactly 6 planes arrive in
the next minute is 0.0504.

ANSWER:
True
KEYWORDS: Poisson distribution, probability


165. True or False: The covariance between two investments is equal to the sum of the variances of the
investments.

ANSWER:
False
KEYWORDS: covariance, variance

166. True or False: If the covariance between two investments is zero, the variance of the sum of the two
investments will be equal to the sum of the variances of the investments.

ANSWER:
True

167. True or False: The expected return of the sum of two investments will be equal to the sum of the expected
returns of the two investments plus twice the covariance between the investments.

ANSWER:
False
KEYWORDS: mean, portfolio

168. True or False: The variance of the sum of two investments will be equal to the sum of the variances of the two
investments plus twice the covariance between the investments.

ANSWER:
True

169. True or False: The variance of the sum of two investments will be equal to the sum of the variances of the two
investments when the covariance between the investments is zero.

ANSWER:
True

170. True or False: The expected return of a two-asset portfolio is equal to the product of the weight assigned to the
first asset and the expected return of the first asset plus the product of the weight assigned to the second asset
and the expected return of the second asset.

ANSWER:
True
KEYWORDS: mean, portfolio


TABLE 5-1

The probability that a particular type of smoke alarm will function properly and sound an alarm in the presence of
smoke is 0.8. You have 2 such alarms in your home and they operate independently.

171. Referring to Table 5-1, the probability that both sound an alarm in the presence of smoke is ________.

ANSWER:
0.64

172. Referring to Table 5-1, the probability that neither sound an alarm in the presence of smoke is
________.

ANSWER:
0.04

173. Referring to Table 5-1, the probability that at least one sounds an alarm in the presence of smoke is
________.

ANSWER:
0.96

TABLE 5-2

A certain type of new business succeeds 60% of the time. Suppose that 3 such businesses open (where they do not
compete with each other, so it is reasonable to believe that their relative successes would be independent).

174. Referring to Table 5-2, the probability that all 3 businesses succeed is ________.

ANSWER:
0.216

175. Referring to Table 5-2, the probability that all 3 businesses fail is ________.

ANSWER:
0.064


176. Referring to Table 5-2, the probability that at least 1 business succeeds is ________.

ANSWER:
0.936

177. Referring to Table 5-2, the probability that exactly 1 business succeeds is ________.

ANSWER:
0.288

178. If X has a binomial distribution with n = 4 and p = 0.3, then P(X = 1) = ________ .

ANSWER:
0.4116

179. If X has a binomial distribution with n = 4 and p = 0.3, then P(X > 1) = ________ .

ANSWER:
0.3483

180. If X has a binomial distribution with n = 5 and p = 0.1, then P(X = 2) = ________ .

ANSWER:
0.0729

181. Suppose that past history shows that 60% of college students prefer Brand C cola. A sample of 5
students is to be selected. The probability that exactly 1 prefers brand C is ________.

ANSWER:
0.0768

students is to be selected. The probability that at least 1 prefers brand C is ________.

ANSWER:
0.9898

students is to be selected. The probability that exactly 3 prefer brand C is ________.


ANSWER:
0.3456

students is to be selected. The probability that exactly 4 prefer brand C is ________.

ANSWER:
0.2592

students is to be selected. The probability that at most 2 prefer brand C is ________.

ANSWER:
0.3174

students is to be selected. The probability that more than 3 prefer brand C is ________.

ANSWER:
0.3370

students is to be selected. The probability that less than 2 prefer brand C is ________.

ANSWER:
0.0870

students is to be selected. The average number that you would expect to prefer brand C is ________.

ANSWER:
3


students is to be selected. The variance of the number that prefer brand C is ________.

ANSWER:
1.2
KEYWORDS: binomial distribution, variance

TABLE 5-3

The following table contains the probability distribution for X = the number of retransmissions necessary to
successfully transmit a 1024K data package through a double satellite media.
X 0 1 2 3
P(X
)
0.35 0.35 0.25 0.05

190. Referring to Table 5-3, the probability of no retransmissions is ________.

ANSWER:
0.35

191. Referring to Table 5-3, the probability of at least one retransmission is ________.

ANSWER:
0.65

192. Referring to Table 5-3, the mean or expected value for the number of retransmissions is ________.

ANSWER:
1.0
KEYWORDS: probability distribution, mean

193. Referring to Table 5-3, the variance for the number of retransmissions is ________.

ANSWER:
0.80
KEYWORDS: probability distribution, variance


194. Referring to Table 5-3, the standard deviation of the number of retransmissions is ________.

ANSWER:
0.894
KEYWORDS: probability distribution, standard deviation
195. In a game called Taxation and Evasion, a player rolls a pair of dice. If on any turn the sum is 7, 11, or
12, the player gets audited. Otherwise, she avoids taxes. Suppose a player takes 5 turns at rolling the dice. The
probability that she does not get audited is ________.

ANSWER:
0.2373

probability that she gets audited once is ________.

ANSWER:
0.3955

probability that she gets audited at least once is ________.

ANSWER:
0.7627

probability that she gets audited no more than 2 times is ________.

ANSWER:
0.8965

expected number of times she will be audited is ________.

ANSWER:
1.25

variance of the number of times she will be audited is ________.

ANSWER:
0.9375
KEYWORDS: binomial distribution, variance

standard deviation of the number of times she will be audited is ________.

ANSWER:
0.968
KEYWORDS: binomial distribution, standard deviation

TABLE 5-4

The following table contains the probability distribution for X = the number of traffic accidents reported in a day in
Corvallis, Oregon.
X 0 1 2 3 4 5
P(X) 0.10 0.20 0.45 0.15 0.05 0.05

202. Referring to Table 5-4, the probability of 3 accidents is ________.

ANSWER:
0.15

203. Referring to Table 5-4, the probability of at least 1 accident is ________.

ANSWER:
0.90

204. Referring to Table 5-4, the mean or expected value of the number of accidents is ________.

ANSWER:
2.0
KEYWORDS: probability distribution, mean,


205. Referring to Table 5-4, the variance of the number of accidents is ________.

ANSWER:
1.4
KEYWORDS: probability distribution, variance

206. Referring to Table 5-4, the standard deviation of the number of accidents is ________.

ANSWER:
1.18
KEYWORDS: probability distribution, standard deviation

207. The number of power outages at a nuclear power plant has a Poisson distribution with a mean of 6
outages per year. The probability that there will be exactly 3 power outages in a year is ____________.

ANSWER:
0.0892
KEYWORDS: Poisson distribution
outages per year. The probability that there will be at least 3 power outages in a year is ____________.

ANSWER:
0.9380

outages per year. The probability that there will be at least 1 power outage in a year is ____________.

ANSWER:
0.9975

outages per year. The probability that there will be no more than 1 power outage in a year is ____________.

ANSWER:
0.0174

outages per year. The probability that there will be between 1 and 3 power outages in a year is ____________.

ANSWER:
0.1487


outages per year. The variance of the number of power outages is ____________.

ANSWER:
6

213. The number of 911 calls in Butte, Montana, has a Poisson distribution with a mean of 10 calls a day.
The probability of seven 911 calls in a day is ____________.

ANSWER:
0.0901

The probability of seven or eight 911 calls in a day is ____________.

ANSWER:
0.2027

The probability of 2 or more 911 calls in a day is ____________.

ANSWER:
0.9995

216. The number of 911 calls in Butte, Montana, has a Poisson distribution with a mean of 10.0 calls a day.
The standard deviation of the number of 911 calls in a day is ____________ .

ANSWER:
3.16


217. An Undergraduate Study Committee of 6 members at a major university is to be formed from a pool of
faculty of 18 men and 6 women. If the committee members are chosen randomly, what is the probability that
precisely half of the members will be women?

ANSWER:
0.1213
KEYWORDS: hypergeometric distribution

218. An Undergraduate Study Committee of 6 members at a major university is to be formed from a pool of
faculty of 18 men and 6 women. If the committee members are chosen randomly, what is the probability that all
of the members will be men?

ANSWER:
0.1379

219. A debate team of 4 members for a high school will be chosen randomly from a potential group of 15
students. Ten of the 15 students have no prior competition experience while the others have some degree of
experience. What is the probability that none of the members chosen for the team have any competition
experience?

ANSWER:
0.1538

220. A debate team of 4 members for a high school will be chosen randomly from a potential group of 15
students. Ten of the 15 students have no prior competition experience while the others have some degree of
experience. What is the probability that at least 1 of the members chosen for the team have some prior
competition experience?

ANSWER:
0.8462

221. A debate team of 4 members for a high school will be chosen randomly from a potential group of 15 students.
Ten of the 15 students have no prior competition experience while the others have some degree of experience.
What is the probability that at most 1 of the members chosen for the team have some prior competition
experience?

ANSWER:
0.5934


222. A debate team of 4 members for a high school will be chosen randomly from a potential group of 15 students.
Ten of the 15 students have no prior competition experience while the others have some degree of experience.
What is the probability that exactly half of the members chosen for the team have some prior competition
experience?

ANSWER:
0.3297

223. The Department of Commerce in a particular state has determined that the number of small businesses that
declare bankruptcy per month is approximately a Poisson distribution with a mean of 6.4. Find the probability
that more than 3 bankruptcies occur next month.

ANSWER:
0.881

224. The Department of Commerce in a particular state has determined that the number of small businesses that
declare bankruptcy per month is approximately a Poisson distribution with a mean of 6.4. Find the probability
that exactly 5 bankruptcies occur next month.

ANSWER:
0.149

225. The on-line access computer service industry is growing at an extraordinary rate. Current estimates suggest
that only 20% of the home-based computers have access to on-line services. This number is expected to grow
quickly over the next 5 years. Suppose 25 people with home-based computers were randomly and independently
sampled. Find the probability that fewer than 10 of those sampled currently have access to on-line services.

ANSWER:
0.983

226. The on-line access computer service industry is growing at an extraordinary rate. Current estimates suggest
that only 20% of the home-based computers have access to on-line services. This number is expected to grow
quickly over the next 5 years. Suppose 25 people with home-based computers were randomly and independently
sampled. Find the probability that more than 20 of those sampled currently do not have access to on-line
services.

ANSWER:
0.421


227. A national trend predicts that women will account for half of all business travelers in the next 3 years. To
attract these women business travelers, hotels are providing more amenities that women particularly like. A
recent survey of American hotels found that 70% offer hairdryers in the bathrooms. Consider a random and
independent sample of 20 hotels. Find the probability all of the hotels in the sample offered hairdryers in the
bathrooms.

ANSWER:
0.0008

independent sample of 20 hotels. Find the probability that more than 7 but less than 13 of the hotels in the
sample offered hairdryers in the bathrooms.

ANSWER:
0.2264

independent sample of 20 hotels. Find the probability that at least 9 of the hotels in the sample do not offer
hairdryers in the bathrooms.

ANSWER:
0.1133

230. The local police department must write, on average, 5 tickets a day to keep department revenues at budgeted
levels. Suppose the number of tickets written per day follows a Poisson distribution with a mean of 6.4 tickets
per day. Find the probability that less than 6 tickets are written on a randomly selected day from this population.

ANSWER:
0.384


231. The local police department must write, on average, 5 tickets a day to keep department revenues at budgeted
levels. Suppose the number of tickets written per day follows a Poisson distribution with a mean of 6.4 tickets
per day. Find the probability that exactly 6 tickets are written on a randomly selected day from this population.

ANSWER:
0.159

TABLE 5-5

From an inventory of 48 new cars being shipped to local dealerships, corporate reports indicate that 12 have
defective radios installed.

232. Referring to Table 5-5, what is the probability out of the 8 new cars it just received that, when each is tested,
no more than 2 of the cars have defective radios?

ANSWER:
0.6863

exactly half of the cars have defective radios?

ANSWER:
0.0773

none of the cars have defective radios?

ANSWER:
0.08019

at least half of the cars have defective radios?

ANSWER:
0.09388


no more than half of the cars have defective radios?

ANSWER:
0.9834

at most 2 of the cars have defective radios?

ANSWER:
0.6863

exactly two of the cars have non-defective radios?

ANSWER:
0.001543

at most three of the cars have non-defective radios?

ANSWER:
0.01661

no more than half of the cars have non-defective radios?

ANSWER:
0.09388


TABLE 5-6

The quality control manager of Marilyns Cookies is inspecting a batch of chocolate chip cookies. When the
production process is in control, the average number of chocolate chip parts per cookie is 6.0.

241. Referring to Table 5-6, what is the probability that any particular cookie being inspected has 4.0 chip parts.

ANSWER:
0.1339

242. Referring to Table 5-6, what is the probability that any particular cookie being inspected has fewer than 5.0
chip parts.

ANSWER:
0.2851

243. Referring to Table 5-6, what is the probability that any particular cookie being inspected has at least 6.0 chip
parts.

ANSWER:
0.5543

244. Referring to Table 5-6, what is the probability that any particular cookie being inspected has between 5.0 and
8.0 chip parts.

ANSWER:
0.5622

245. Referring to Table 5-6, what is the probability that any particular cookie being inspected has less than 5.0 or
more than 8.0 chip parts.

ANSWER:
0.4378

CHAPTER 6: THE NORMAL DISTRIBUTION AND OTHER
CONTINUOUS DISTRIBUTIONS

1. In its standardized form, the normal distribution
a) has a mean of 0 and a standard deviation of 1.
b) has a mean of 1 and a variance of 0.
c) has an area equal to 0.5.
d) cannot be used to approximate discrete probability distributions.

ANSWER:
a
KEYWORDS: standardized normal distribution, properties

2. Which of the following about the normal distribution is NOT true?
a) Theoretically, the mean, median, and mode are the same.
b) About 2/3 of the observations fall within 1 standard deviation from the mean.
c) It is a discrete probability distribution.
d) Its parameters are the mean, , and standard deviation, o .

ANSWER:
c
KEYWORDS: normal distribution, properties

3. If a particular batch of data is approximately normally distributed, we would find that approximately
a) 2 of every 3 observations would fall between 1 standard deviation around the mean.
b) 4 of every 5 observations would fall between 1.28 standard deviations around the mean.
c) 19 of every 20 observations would fall between 2 standard deviations around the mean.
d) all of the above

ANSWER:
d


4. For some positive value of Z, the probability that a standardized normal variable is between 0 and Z is 0.3770.
The value of Z is
a) 0.18.
b) 0.81.
c) 1.16.
d) 1.47.

ANSWER:
c
KEYWORDS: standardized normal distribution, value

5. For some value of Z, the probability that a standardized normal variable is below Z is 0.2090. The value of Z is
a) 0.81.
b) 0.31.
c) 0.31.
d) 1.96.

ANSWER:
a

6. For some positive value of Z, the probability that a standardized normal variable is between 0 and Z is 0.3340.
The value of Z is
a) 0.07.
b) 0.37.
c) 0.97.
d) 1.06.

ANSWER:
c

7. For some positive value of X, the probability that a standardized normal variable is between 0 and +2X is
0.1255. The value of X is
a) 0.99.
b) 0.40.
c) 0.32.
d) 0.16.

ANSWER:
d
KEYWORDS: normal distribution, value


8. For some positive value of X, the probability that a standardized normal variable is between 0 and +1.5X is
0.4332. The value of X is
a) 0.10.
b) 0.50.
c) 1.00.
d) 1.50.

ANSWER:
c

9. Given that X is a normally distributed random variable with a mean of 50 and a standard deviation of 2, find the
probability that X is between 47 and 54.

ANSWER:
0.9104
KEYWORDS: normal distribution, probability

10. A company that sells annuities must base the annual payout on the probability distribution of the length of life
of the participants in the plan. Suppose the probability distribution of the lifetimes of the participants is
approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years. What
proportion of the plan recipients would receive payments beyond age 75?

ANSWER:
0.0228

approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years. What
proportion of the plan recipients die before they reach the standard retirement age of 65?

ANSWER:
0.1957


approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years. Find the age
at which payments have ceased for approximately 86% of the plan participants.

ANSWER:
71.78 years old

13. A catalog company that receives the majority of its orders by telephone conducted a study to determine how
long customers were willing to wait on hold before ordering a product. The length of time was found to be a
random variable best approximated by an exponential distribution with a mean equal to 3 minutes. What
proportion of customers having to hold more than 4.5 minutes will hang up before placing an order?
a) 0.22313
b) 0.48658
c) 0.51342
d) 0.77687

ANSWER:
a
KEYWORDS: exponential distribution, probability

random variable best approximated by an exponential distribution with a mean equal to 3 minutes. What
proportion of customers having to hold more than 1.5 minutes will hang up before placing an order?
a) 0.86466
b) 0.60653
c) 0.39347
d) 0.13534

ANSWER:
b


random variable best approximated by an exponential distribution with a mean equal to 3 minutes. Find the
waiting time at which only 10% of the customers will continue to hold.
a) 2.3 minutes
b) 3.3 minutes
c) 6.9 minutes
d) 13.8 minutes

ANSWER:
c
KEYWORDS: exponential distribution, value

random variable best approximated by an exponential distribution with a mean equal to 2.8 minutes. What
proportion of callers is put on hold longer than 2.8 minutes?
a) 0.60810
b) 0.367879
c) 0.50
d) 0.632121

ANSWER:
b

random variable best approximated by an exponential distribution with a mean equal to 2.8 minutes. What is the
probability that a randomly selected caller is placed on hold fewer than 7 minutes?
a) 0.0009119
b) 0.082085
c) 0.917915
d) 0.9990881

ANSWER:
c


18. If we know that the length of time it takes a college student to find a parking spot in the library parking lot
follows a normal distribution with a mean of 3.5 minutes and a standard deviation of 1 minute, find the
probability that a randomly selected college student will find a parking spot in the library parking lot in less than
3 minutes.
a) 0.3551
b) 0.3085
c) 0.2674
d) 0.1915

ANSWER:
b

follows a normal distribution with a mean of 3.5 minutes and a standard deviation of 1 minute, find the
probability that a randomly selected college student will take between 2 and 4.5 minutes to find a parking spot
in the library parking lot.
a) 0.0919
b) 0.2255
c) 0.4938
d) 0.7745

ANSWER:
d

follows a normal distribution with a mean of 3.5 minutes and a standard deviation of 1 minute, find the point in
the distribution that 75.8% of the college students exceed when trying to find a parking spot in the library
parking lot.
a) 2.8 minutes
b) 3.2 minutes
c) 3.4 minutes
d) 4.2 minutes

ANSWER:
a


21. Let X represent the amount of time it takes a student to park in the library parking lot at the university. If we
know that the distribution of parking times can be modeled using an exponential distribution with a mean of 4
minutes, find the probability that it will take a randomly selected student more than 10 minutes to park in the
library lot.
a) 0.917915
b) 0.670320
c) 0.329680
d) 0.082085

ANSWER:
d

22. Let X represent the amount of time it takes a student to park in the library parking lot at the university. If we
know that the distribution of parking times can be modeled using an exponential distribution with a mean of 4
minutes, find the probability that it will take a randomly selected student between 2 and 12 minutes to park in
the library lot.
a) 0.049787
b) 0.556744
c) 0.606531
d) 0.656318

ANSWER:
b

23. The owner of a fish market determined that the average weight for a catfish is 3.2 pounds with a standard
deviation of 0.8 pounds. Assuming the weights of catfish are normally distributed, the probability that a
randomly selected catfish will weigh more than 4.4 pounds is _______.

ANSWER:
0.0668

randomly selected catfish will weigh between 3 and 5 pounds is _______.

ANSWER:
0.5865


deviation of 0.8 pounds. A citation catfish should be one of the top 2% in weight. Assuming the weights of
catfish are normally distributed, at what weight (in pounds) should the citation designation be established?
a) 1.56 pounds
b) 4.84 pounds
c) 5.20 pounds
d) 7.36 pounds

ANSWER:
b

deviation of 0.8 pounds. Assuming the weights of catfish are normally distributed, above what weight (in
pounds) do 89.80% of the weights occur?

ANSWER:
2.184 pounds

randomly selected catfish will weigh less than 2.2 pounds is _______.

ANSWER:
0.1056

28. The Tampa International Airport (TIA) has been criticized for the waiting times associated with departing
flights. While the critics acknowledge that many flights have little or no waiting times, their complaints deal
more specifically with the longer waits attributed to some flights. The critics are interested in showing,
mathematically, exactly what the problems are. Which type of distribution would best model the waiting times
of the departing flights at TIA?
a) uniform distribution
b) binomial distribution
c) normal distribution
d) exponential distribution

ANSWER:
d
KEYWORDS: exponential distribution, properties


29. Scientists in the Amazon are trying to find a cure for a deadly disease that is attacking the rain forests there. One
of the variables that the scientists have been measuring involves the diameter of the trunk of the trees that have
been affected by the disease. Scientists have calculated that the average diameter of the diseased trees is 42
centimeters. They also know that approximately 95% of the diameters fall between 32 and 52 centimeters, and
almost all of the diseased trees have diameters between 27 and 57 centimeters. When modeling the diameters of
diseased trees, which distribution should the scientists use?

ANSWER:
c

30. In the game Wheel of Fortune, which of the following distributions can best be used to compute the probability
of winning the special vacation package in a single spin?

ANSWER:
a
KEYWORDS: uniform distribution, properties

31. A food processor packages orange juice in small jars. The weights of the filled jars are approximately normally
distributed with a mean of 10.5 ounces and a standard deviation of 0.3 ounces. Find the proportion of all jars
packaged by this process that have weights that fall below 10.875 ounces.

ANSWER:
0.8944

32. A food processor packages orange juice in small jars. The weights of the filled jars are approximately normally
distributed with a mean of 10.5 ounces and a standard deviation of 0.3 ounces. Find the proportion of all jars
packaged by this process that have weights that fall above 10.95 ounces.

ANSWER:
0.0668

33. True or False: The probability that a standardized normal random variable, Z, falls between 1.50 and 0.81 is
0.7242.

ANSWER:
True
KEYWORDS: standardized normal distribution, probability


34. True or False: The probability that a standardized normal random variable, Z, falls between 1.50 and 2.10 is the
same as the probability that Z is between 2.10 and 1.50.

ANSWER:
True

35. True or False: The probability that a standardized normal random variable, Z, is below 1.96 is 0.4750.

ANSWER:
False

36. True or False: The probability that a standardized normal random variable, Z, is between 1.00 and 3.00 is
0.1574.

ANSWER:
True

37. True or False: The probability that a standardized normal random variable, Z, falls between 2.00 and 0.44 is
0.6472.

ANSWER:
False

38. True or False: The probability that a standardized normal random variable, Z, is less than 50 is approximately 0.

ANSWER:
False


39. True or False: A worker earns $15 per hour at a plant and is told that only 2.5% of all workers make a higher
wage. If the wage is assumed to be normally distributed and the standard deviation of wage rates is $5 per hour,
the average wage for the plant is $7.50 per hour.

ANSWER:
False
KEYWORDS: normal distribution, mean

40. True or False: Theoretically, the mean, median, and the mode are all equal for a normal distribution.

ANSWER:
True

41. True or False: Any set of normally distributed data can be transformed to its standardized form.

ANSWER:
True

42. True or False: The "middle spread," that is, the middle 50% of the normal distribution, is equal to one standard
deviation.

ANSWER:
False
KEYWORDS: normal distribution, probability, value

43. True or False: A normal probability plot may be used to assess the assumption of normality for a particular
batch of data.

ANSWER:
True
KEYWORDS: normal probability plot

44. True or False: If a data batch is approximately normally distributed, its normal probability plot would be S-
shaped.

ANSWER:
False


45. The probability that a standardized normal variable Z is positive is ________.

ANSWER:
0.50
KEYWORDS: standardized normal distribution

46. The amount of pyridoxine (in grams) in a multiple vitamin is normally distributed with = 110 grams and o
= 25 grams. What is the probability that a randomly selected vitamin will contain between 100 and 110 grams
of pyridoxine?

ANSWER:
0.1554

= 25 grams. What is the probability that a randomly selected vitamin will contain between 82 and 100 grams of
pyridoxine?

ANSWER:
0.2132

= 25 grams. What is the probability that a randomly selected vitamin will contain at least 100 grams of
pyridoxine?

ANSWER:
0.6554

= 25 grams. What is the probability that a randomly selected vitamin will contain between 100 and 120 grams
of pyridoxine?

ANSWER:
0.3108


= 25 grams. What is the probability that a randomly selected vitamin will contain less than 100 grams of
pyridoxine?

ANSWER:
0.3446

= 25 grams. What is the probability that a randomly selected vitamin will contain less than 100 grams or more
than 120 grams of pyridoxine?

ANSWER:
0.6892

= 25 grams. Approximately 83% of the vitamins will have at least how many grams of pyridoxine?

ANSWER:
86.15

53. The true length of boards cut at a mill with a listed length of 10 feet is normally distributed with a mean of 123
inches and a standard deviation of 1 inch. What proportion of the boards will be between 121 and 124 inches?

ANSWER:
0.8186

inches and a standard deviation of 1 inch. What proportion of the boards will be over 125 inches in length?

ANSWER:
0.0228


inches and a standard deviation of 1 inch. What proportion of the boards will be less than 124 inches?

ANSWER:
0.8413

56. Suppose Z has a standardized normal distribution with a mean of 0 and a standard deviation of 1. The
probability that Z is less than 1.15 is __________.

ANSWER:
0.8749

probability that Z is more than 0.77 is __________.

ANSWER:
0.2207

probability that Z is less than -2.20 is __________.

ANSWER:
0.0139

probability that Z is more than -0.98 is __________.

ANSWER:
0.8365

probability that Z is between -2.33 and 2.33 is __________.

ANSWER:
0.9802

probability that Z is between -2.89 and -1.03 is __________.

ANSWER:
0.1496


probability that Z is between -0.88 and 2.29 is __________.

ANSWER:
0.7996

probability that Z values are larger than __________ is 0.3483.

ANSWER:
0.39

probability that Z values are larger than __________ is 0.6985.

ANSWER:
-0.52

65. Suppose Z has a standardized normal distribution with a mean of 0 and a standard deviation of 1. So, 27% of the
possible Z values are smaller than __________.

ANSWER:
-0.61

possible Z values are smaller than __________.

ANSWER:
1.04


possible Z values are between __________ and __________ (symmetrically distributed about the mean).

ANSWER:
-2.05 and 2.05

possible Z values are between __________ and __________ (symmetrically distributed about the mean).

ANSWER:
-0.67 and 0.67

69. The amount of time necessary for assembly line workers to complete a product is a normal random variable
with a mean of 15 minutes and a standard deviation of 2 minutes. The probability is __________ that a product
is assembled in less than 12 minutes.

ANSWER:
0.0668

is assembled in between 14 and 16 minutes.

ANSWER:
0.3829


ANSWER:
0.0606



ANSWER:
0.49865


ANSWER:
0.30719

is assembled in more than 11 minutes.

ANSWER:
0.97725

is assembled in more than 19 minutes.

ANSWER:
0.0228

is assembled in less than 20 minutes.

ANSWER:
0.9938


with a mean of 15 minutes and a standard deviation of 2 minutes. So, 15% of the products require more than
__________ minutes for assembly.

ANSWER:
17.0729

with a mean of 15 minutes and a standard deviation of 2 minutes. So, 90% of the products require more than
__________ minutes for assembly.

ANSWER:
12.44

with a mean of 15 minutes and a standard deviation of 2 minutes. So, 60% of the products would be assembled
within __________ and __________ minutes (symmetrically distributed about the mean).

ANSWER:
13.32 and 16.68

within __________ minutes.

ANSWER:
13.1

within __________ minutes.

ANSWER:
16.0488


TABLE 6-1

The manager of a surveying company believes that the average number of phone surveys completed per hour by her
employees has a normal distribution. She takes a sample of 15 days output from her employees and determines the
average number of surveys per hour on these days. The ordered array for this data is: 10.0, 10.1, 10.3, 10.5, 10.7,
11.2, 11.4, 11.5, 11.7, 11.8, 11.8, 12.0, 12.2, 12.2, 12.5.

82. Referring to Table 6-1, the first standardized normal quantile is ________.

ANSWER:
-1.53
KEYWORDS: standardized normal quantile, normal probability plot

83. Referring to Table 6-1, the fourth standardized normal quantile is ________.

ANSWER:
-0.67

84. Referring to Table 6-1, the ninth standardized normal quantile is ________.

ANSWER:
+0.16

85. Referring to Table 6-1, the fourteenth standardized normal quantile is ________.

ANSWER:
+1.15

86. Referring to Table 6-1, the last standardized normal quantile is ________.

ANSWER:
+1.53


87. Referring to Table 6-1, construct a normal probability plot for the data.

ANSWER:


88. True or False: Referring to Table 6-1, the data appear reasonably normal but not perfectly normal.

ANSWER:
True

TABLE 6-2

The city manager of a large city believes that the number of reported accidents on any weekend has a normal
distribution. She takes a sample of nine weekends and determines the number of reported accidents during each.
The ordered array for this data is: 15, 46, 53, 54, 55, 76, 82, 256, 407.

89. Referring to Table 6-2, the first standardized normal quantile is ________.

ANSWER:
-1.28

10
11
12
13
-2 -1.5 -1 -0.5 0 0.5 1 1.5 2
Z -Score
Surveys

90. Referring to Table 6-2, the fifth standardized normal quantile is ________.

ANSWER:
0

91. Referring to Table 6-2, the sixth standardized normal quantile is ________.

ANSWER:
+0.25

92. Referring to Table 6-2, the second standardized normal quantile is ________.

ANSWER:
-0.84

93. Referring to Table 6-2, the seventh standardized normal quantile is ________.

ANSWER:
+0.52


94. Referring to Table 6-2, construct a normal probability plot.

ANSWER:


95. True or False: Referring to Table 6-2, the data appear normal.

ANSWER:
False

96. Times spent watching TV every week by first graders follow an exponential distribution with mean 10 hours.
The probability that a given first grader spends less than 20 hours watching TV is ______.

ANSWER:
0.8647

97. Times spent watching TV every week by first graders follow an exponential distribution with a mean of 10
hours. The probability that a given first grader spends more than 5 hours watching TV is ______.

ANSWER:
0.6065

98. Times spent watching TV every week by first graders follow an exponential distribution with a mean of 10
hours. The probability that a given first grader spends between 10 and 15 hours watching TV is ______.

ANSWER:
0.1447
0
50
100
150
200
250
300
350
400
450
-1.5 -1 -0.5 0 0.5 1 1.5
Z -Scores
Accidents

99. Patients arriving at an outpatient clinic follow an exponential distribution with a mean of 15 minutes. What is
the average number of arrivals per minute?

ANSWER:
0.06667
KEYWORDS: exponential distribution, mean

the probability that a randomly chosen arrival would be more than 18 minutes?

ANSWER:
0.3012

the probability that a randomly chosen arrival would be less than 15 minutes?

ANSWER:
0.6321

102. Patients arriving at an outpatient clinic follow an exponential distribution at a rate of 15 patients per hour.
What is the probability that a randomly chosen arrival would be less than 15 minutes?

ANSWER:
0.9765

What is the probability that a randomly chosen arrival would be more than 5 minutes?

ANSWER:
0.2865

What is the probability that a randomly chosen arrival would be between 5 minutes and 15 minutes?

ANSWER:
0.2630

105. Patients arriving at an outpatient clinic follow an exponential distribution at a rate of 1 patient per hour. What
is the probability that a randomly chosen arrival would be more than 1 hour?

ANSWER:
0.3679


is the probability that a randomly chosen arrival would be more than 2.5 hours?

ANSWER:
0.0821

is the probability that a randomly chosen arrival would be less than 20 minutes?

ANSWER:
0.2835

108. Patients arriving at an outpatient clinic follow an exponential distribution at a rate of 1.5 patients per hour.
What is the probability that a randomly chosen arrival would be less than 10 minutes?

ANSWER:
0.2212


109. Patients arriving at an outpatient clinic follow an exponential distribution at a rate of 1.5 patients per hour.
What is the probability that a randomly chosen arrival would be between 10 and 15 minutes?

ANSWER:
0.0915

TABLE 6-3

The number of column inches of classified advertisements appearing on Mondays in a certain daily newspaper is
normally distributed with a population mean of 320 and a population standard deviation of 20 inches.

110. Referring to Table 6-3, for a randomly chosen Monday, what is the probability there will be less than 340
column inches of classified advertisements?

ANSWER:
0.8413

111. Referring to Table 6-3, for a randomly chosen Monday, what is the probability there will be between 280 and
360 column inches of classified advertisements?

ANSWER:
0.9545

112. Referring to Table 6-3, for a randomly chosen Monday, the probability is 0.1 that there will be less than how
many column inches of classified advertisements?

ANSWER:
294.4

113. Referring to Table 6-3, a single Monday is chosen at random. State in which of the following ranges the
number of column inches of classified advertisements is most likely to be:
a) 300-320
b) 310-330
c) 320-340
d) 330-350

ANSWER:
b

TABLE 6-4

John has two jobs. For daytime work at a jewelry store, he is paid $200 per month, plus a commission. His
monthly commission is normally distributed with a mean of $600 and a standard deviation of $40. At night he

works as a waiter, for which his monthly income is normally distributed with a mean of $100 and a standard
deviation of $30. John's income levels from these two sources are independent of each other.

114. Referring to Table 6-4, for a given month, what is the probability that John's commission from the jewelry
store is less than $640?

ANSWER:
0.8413

115. Referring to Table 6-4, for a given month, what is the probability that John's income as a waiter is between
$70 and $160?

ANSWER:
0.8186

116. Referring to Table 6-4, the probability is 0.9 that John's income as a waiter is less than how much in a given
month?

ANSWER:
$138.45

117. Referring to Table 6-4, find the mean and standard deviation of John's total income from these two jobs for a
given month.

ANSWER:
$900; $50
EXPLANATION: Total mean = $200 + $600 + $100 = $900; Total variance = 40
2
+ 30
2
= 2,500
KEYWORDS: normal distribution, mean, standard deviation

118. Referring to Table 6-4, for a given month, what is the probability that John's total income from these two jobs
is less than $825?

ANSWER:
0.0668
EXPLANATION: Total mean = $900, Total standard deviation = $50

119. Referring to Table 6-4, the probability is 0.2 that John's total income from these two jobs in a given month is
less than how much?

ANSWER:
$857.92

TABLE 6-5

Suppose the time interval between two consecutive defective light bulbs from a production line has a uniform
distribution over an interval from 0 to 90 minutes.

120. Referring to Table 6-5, what is the mean of the time interval?

ANSWER:
45
KEYWORDS: uniform distribution, mean

121. Referring to Table 6-5, what is the variance of the time interval?

ANSWER:
675
KEYWORDS: uniform distribution, variance

122. Referring to Table 6-5, what is the standard deviation of the time interval?

ANSWER:
25.9808
KEYWORDS: uniform distribution, standard deviation

123. Referring to Table 6-5, what is the probability that the time interval between two consecutive defective light
bulbs will be exactly 10 minutes?

ANSWER:
0.0
KEYWORDS: uniform distribution, probability

bulbs will be less than 10 minutes?

ANSWER:
0.1111

bulbs will be between 10 and 20 minutes?

ANSWER:
0.1111

bulbs will be between 10 and 35 minutes?

ANSWER:
0.2778


bulbs will be at least 50 minutes?

ANSWER:
0.4444


ANSWER:
0.1111


ANSWER:
0.0

130. Referring to Table 6-5, the probability is 50% that the time interval between two consecutive defective light
bulbs will fall between which two values that are the same distance from the mean?

ANSWER:
22.5 and 67.5
KEYWORDS: uniform distribution, value



ANSWER:
11.25 and 78.75


ANSWER:
4.5 and 85.5

TABLE 6-6

The interval between consecutive hits at a web site is assumed to follow an exponential distribution with an average
of 40 hits per minute.

133. Referring to Table 6-6, what is the average time between consecutive hits?

ANSWER:
0.025 minutes
KEYWORDS: exponential distribution, mean

134. Referring to Table 6-6, what is the probability that the next hit at the web site will occur within 10 seconds
after just being hit by a visitor?

ANSWER:
0.9987

135. Referring to Table 6-6, what is the probability that the next hit at the web site will occur within no sooner than
5 seconds after just being hit by a visitor?

ANSWER:
0.0357


136. Referring to Table 6-6, what is the probability that the next hit at the web site will occur between the next 1.2
and 1.5 seconds after just being hit by a visitor?

ANSWER:
0.08145


CHAPTER 7: SAMPLING DISTRIBUTIONS

1. Sampling distributions describe the distribution of
a) parameters.
b) statistics.
c) both parameters and statistics.
d) neither parameters nor statistics.

ANSWER:
b
KEYWORDS: statistics, sampling distribution

2. The standard error of the mean
a) is never larger than the standard deviation of the population.
b) decreases as the sample size increases.
c) measures the variability of the mean from sample to sample.
d) all of the above

ANSWER:
d
KEYWORDS: standard error, mean

3. The Central Limit Theorem is important in statistics because
a) for a large n, it says the population is approximately normal.
b) for any population, it says the sampling distribution of the sample mean is approximately normal,
regardless of the sample size.
c) for a large n, it says the sampling distribution of the sample mean is approximately normal, regardless
of the shape of the population.
d) for any sized sample, it says the sampling distribution of the sample mean is approximately normal.

ANSWER:
c
KEYWORDS: central limit theorem

4. If the expectation of a sampling distribution is located at the parameter it is estimating, then we call that statistic
a) unbiased.
b) minimum variance.
c) biased.
d) random.

ANSWER:
a
KEYWORDS: unbiased

5. For air travelers, one of the biggest complaints involves the waiting time between when the airplane taxis away
from the terminal until the flight takes off. This waiting time is known to have a skewed-right distribution with a
mean of 10 minutes and a standard deviation of 8 minutes. Suppose 100 flights have been randomly sampled.
Describe the sampling distribution of the mean waiting time between when the airplane taxis away from the
terminal until the flight takes off for these 100 flights.
a) Distribution is skewed-right with mean = 10 minutes and standard error = 0.8 minutes.
b) Distribution is skewed-right with mean = 10 minutes and standard error = 8 minutes.
c) Distribution is approximately normal with mean = 10 minutes and standard error = 0.8 minutes.
d) Distribution is approximately normal with mean = 10 minutes and standard error = 8 minutes.

ANSWER:
c

6. Which of the following statements about the sampling distribution of the sample mean is incorrect?
a) The sampling distribution of the sample mean is approximately normal whenever the sample size is
sufficiently large ( n > 30).
b) The sampling distribution of the sample mean is generated by repeatedly taking samples of size n and
computing the sample means.
c) The mean of the sampling distribution of the sample mean is equal to .
d) The standard deviation of the sampling distribution of the sample mean is equal to o.

ANSWER:
d
KEYWORDS: sampling distribution, properties

7. Which of the following is true about the sampling distribution of the sample mean?
a) The mean of the sampling distribution is always .
b) The standard deviation of the sampling distribution is always o.
c) The shape of the sampling distribution is always approximately normal.
d) All of the above are true.

ANSWER:
a
KEYWORDS: sampling distribution, properties


8. True or False: The amount of time it takes to complete an examination has a skewed-left distribution with a
mean of 65 minutes and a standard deviation of 8 minutes. If 64 students were randomly sampled, the
probability that the sample mean of the sampled students exceeds 71 minutes is approximately 0.

ANSWER:
True
KEYWORDS: sampling distribution, central limit theorem

9. Suppose the ages of students in Statistics 101 follow a skewed-right distribution with a mean of 23 years and a
standard deviation of 3 years. If we randomly sampled 100 students, which of the following statements about
the sampling distribution of the sample mean age is incorrect?
a) The mean of the sample mean is equal to 23 years.
b) The standard deviation of the sample mean is equal to 3 years.
c) The shape of the sampling distribution is approximately normal.
d) The standard error of the sample mean is equal to 0.3 years.

ANSWER:
b

10. Why is the Central Limit Theorem so important to the study of sampling distributions?
a) It allows us to disregard the size of the sample selected when the population is not normal.
b) It allows us to disregard the shape of the sampling distribution when the size of the population is large.
c) It allows us to disregard the size of the population we are sampling from.
d) It allows us to disregard the shape of the population when n is large.

ANSWER:
d

11. A sample that does not provide a good representation of the population from which it was collected is referred
to as a(n) sample.

ANSWER:
biased
KEYWORDS: unbiased

12. True or False: The Central Limit Theorem is considered powerful in statistics because it works for any
population distribution, provided the sample size is sufficiently large and the population mean and standard
deviation are known.

ANSWER:
True
13. Suppose a sample of n = 50 items is drawn from a population of manufactured products and the weight, X, of
each item is recorded. Prior experience has shown that the weight has a probability distribution with = 6
ounces and o = 2.5 ounces. Which of the following is true about the sampling distribution of the sample mean
if a sample of size 15 is selected?
a) The mean of the sampling distribution is 6 ounces.

b) The standard deviation of the sampling distribution is 2.5 ounces.
c) The shape of the sample distribution is approximately normal.

ANSWER:
a
KEYWORDS: sampling distribution, unbiased

14. The average score of all pro golfers for a particular course has a mean of 70 and a standard deviation of 3.0.
Suppose 36 golfers played the course today. Find the probability that the average score of the 36 golfers
exceeded 71.

ANSWER:
0.0228
KEYWORDS: sampling distribution, mean, probability, central limit theorem

15. The distribution of the number of loaves of bread sold per day by a large bakery over the past 5 years has a
mean of 7,750 and a standard deviation of 145 loaves. Suppose a random sample of n = 40 days has been
selected. What is the approximate probability that the average number of loaves sold in the sampled days
exceeds 7,895 loaves?

ANSWER:
Approximately 0

16. Sales prices of baseball cards from the 1960s are known to possess a skewed-right distribution with a mean sale
price of $5.25 and a standard deviation of $2.80. Suppose a random sample of 100 cards from the 1960s is
selected. Describe the sampling distribution for the sample mean sale price of the selected cards.
a) Skewed-right with a mean of $5.25 and a standard error of $2.80.
b) Normal with a mean of $5.25 and a standard error of $0.28.
c) Skewed-right with a mean of $5.25 and a standard error of $0.28.
d) Normal with a mean of $5.25 and a standard error of $2.80.

ANSWER:
b


17. Major league baseball salaries averaged $1.5 million with a standard deviation of $0.8 million in 1994. Suppose
a sample of 100 major league players was taken. Find the approximate probability that the average salary of the
100 players exceeded $1 million.
a) approximately 0
b) 0.2357
c) 0.7357
d) approximately 1

ANSWER:
d

18. At a computer manufacturing company, the actual size of computer chips is normally distributed with a mean of
1 centimeter and a standard deviation of 0.1 centimeters. A random sample of 12 computer chips is taken. What
is the standard error for the sample mean?
a) 0.029
b) 0.050
c) 0.091
d) 0.120

ANSWER:
a

is the probability that the sample mean will be between 0.99 and 1.01 centimeters?

ANSWER:
0.2710
KEYWORDS: sampling distribution, mean, probability

is the probability that the sample mean will be below 0.95 centimeters?

ANSWER:
0.0416


1 centimeter and a standard deviation of 0.1 centimeters. A random sample of 12 computer chips is taken.
Above what value do 2.5% of the sample means fall?

ANSWER:
1.057
KEYWORDS: sampling distribution, mean, value

22. The owner of a fish market has an assistant who has determined that the weights of catfish are normally
distributed, with mean of 3.2 pounds and a standard deviation of 0.8 pounds. If a sample of 16 fish is taken,
what would the standard error of the mean weight equal?
a) 0.003
b) 0.050
c) 0.200
d) 0.800

ANSWER:
c

distributed, with mean of 3.2 pounds and a standard deviation of 0.8 pounds. If a sample of 25 fish yields a
mean of 3.6 pounds, what is the Z-score for this observation?
a) 18.750
b) 2.500
c) 1.875
d) 0.750

ANSWER:
b
KEYWORDS: sampling distribution, mean

distributed, with mean of 3.2 pounds and a standard deviation of 0.8 pounds. If a sample of 64 fish yields a
mean of 3.4 pounds, what is probability of obtaining a sample mean this large or larger?
a) 0.0001
b) 0.0013
c) 0.0228
d) 0.4987

ANSWER:
c

distributed, with mean of 3.2 pounds and a standard deviation of 0.8 pounds. What percentage of samples of 4
fish will have sample means between 3.0 and 4.0 pounds?
a) 84%
b) 67%

c) 29%
d) 16%

ANSWER:
b

26. The use of the finite population correction factor, when sampling without replacement from finite populations,
will
a) increase the standard error of the mean.
b) not affect the standard error of the mean.
c) reduce the standard error of the mean.
d) only affect the proportion, not the mean.

ANSWER:
c
KEYWORDS: finite population correction

27. For sample size 16, the sampling distribution of the mean will be approximately normally distributed
a) regardless of the shape of the population.
b) if the shape of the population is symmetrical.
c) if the sample standard deviation is known.
d) if the sample is normally distributed.

ANSWER:
b
KEYWORDS: sampling distribution, mean, central limit theorem

28. The standard error of the mean for a sample of 100 is 30. In order to cut the standard error of the mean to 15, we
would
a) increase the sample size to 200.
b) increase the sample size to 400.
c) decrease the sample size to 50.
d) decrease the sample to 25.

ANSWER:
b


29. Which of the following is true regarding the sampling distribution of the mean for a large sample size?
a) It has the same shape, mean, and standard deviation as the population.
b) It has a normal distribution with the same mean and standard deviation as the population.
c) It has the same shape and mean as the population, but has a smaller standard deviation.
d) It has a normal distribution with the same mean as the population but with a smaller standard deviation.

ANSWER:
d

30. For sample sizes greater than 30, the sampling distribution of the mean will be approximately normally
distributed
b) only if the shape of the population is symmetrical.
c) only if the standard deviation of the samples are known.
d) only if the population is normally distributed.

ANSWER:
a

31. For sample size 1, the sampling distribution of the mean will be normally distributed
b) only if the shape of the population is symmetrical.
c) only if the population values are positive.
d) only if the population is normally distributed.

ANSWER:
d

32. The standard error of the proportion will become larger
a) as p approaches 0.
b) as p approaches 0.50.
c) as p approaches 1.00.
d) as n increases.

ANSWER:
b
KEYWORDS: standard error, proportion


33. True or False: As the sample size increases, the standard error of the mean increases.
ANSWER:
False

34. True or False: If the population distribution is symmetric, the sampling distribution of the mean can be
approximated by the normal distribution if the samples contain at least 15 observations.

ANSWER:
True
KEYWORDS: population distribution, sampling distribution, mean, central limit theorem

35. True or False: If the population distribution is unknown, in most cases the sampling distribution of the mean can
be approximated by the normal distribution if the samples contain at least 30 observations.

ANSWER:
True

36. True or False: If the amount of gasoline purchased per car at a large service station has a population mean of
$15 and a population standard deviation of $4, then 99.73% of all cars will purchase between $3 and $27.

ANSWER:
False

$15 and a population standard deviation of $4, and a random sample of 4 cars is selected, there is approximately
a 68.26% chance that the sample mean will be between $13 and $17.

ANSWER:
False
EXPLANATION: The sample is too small for the normal approximation.


$15 and a population standard deviation of $4, and it is assumed that the amount of gasoline purchased per car
is symmetric, there is approximately a 68.26% chance that a random sample of 16 cars will have a sample mean
between $14 and $16.

ANSWER:
True

$15 and a population standard deviation of $4, and a random sample of 64 cars is selected, there is
approximately a 95.44% chance that the sample mean will be between $14 and $16.

ANSWER:
True

40. True or False: As the sample size increases, the effect of an extreme value on the sample mean becomes
smaller.

ANSWER:
True
KEYWORDS: sampling distribution, law of large numbers

41. True or False: If the population distribution is skewed, in most cases the sampling distribution of the mean can
be approximated by the normal distribution if the samples contain at least 30 observations.

ANSWER:
True

42. True or False: A sampling distribution is a probability distribution for a statistic.

ANSWER:
True
KEYWORDS: sampling distribution


43. True or False: Suppose = 50 and o
2
= 100 for a population. In a sample where n = 100 is randomly taken,
95% of all possible sample means will fall between 48.04 and 51.96.

ANSWER:
True

2
95% of all possible sample means will fall above 76.71.

ANSWER:
True

2
90% of all possible sample means will fall between 49 and 51.

ANSWER:
False

46. True or False: The Central Limit Theorem ensures that the sampling distribution of the sample mean approaches
normal as the sample size increases.

ANSWER:
True

47. True or False: The standard error of the mean is also known as the standard deviation of the sampling
distribution of the sample mean.

ANSWER:
True

48. True or False: A sampling distribution is defined as the probability distribution of possible sample sizes that can
be observed from a given population.

ANSWER:
False
KEYWORDS: sampling distribution


49. True or False: As the size of the sample is increased, the standard deviation of the sampling distribution of the
sample mean for a normally distributed population will stay the same.

ANSWER:
False
KEYWORDS: standard error, properties

50. True or False: For distributions such as the normal distribution, the arithmetic mean is considered more stable
from sample to sample than other measures of central tendency.

ANSWER:
True
KEYWORDS: sampling distribution, mean

51. True or False: The fact that the sample means are less variable than the population data can be observed from
the standard error of the mean.

ANSWER:
True
KEYWORDS: sampling distribution, mean, standard error

52. The amount of pyridoxine (in grams) per multiple vitamin is normally distributed with = 110 grams and o
= 25 grams. A sample of 25 vitamins is to be selected. What is the probability that the sample mean will be
between 100 and 120 grams?

ANSWER:
0.9545

= 25 grams. A sample of 25 vitamins is to be selected. What is the probability that the sample mean will be less
than 100 grams?

ANSWER:
0.0228

= 25 grams. A sample of 25 vitamins is to be selected. What is the probability that the sample mean will be
greater than 100 grams?

ANSWER:
0.9772

= 25 grams. A sample of 25 vitamins is to be selected. So, 95% of all sample means will be greater than how
many grams?

ANSWER:
101.7757

= 25 grams. A sample of 25 vitamins is to be selected. So, the middle 70% of all sample means will fall between
what two values?

ANSWER:
104.8 and 115.2

57. The amount of time required for an oil and filter change on an automobile is normally distributed with a mean
of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. What would you
expect the standard error of the mean to be?

ANSWER:
2.5 minutes

of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. What is the
probability that the sample mean is between 45 and 52 minutes?

ANSWER:
0.4974

of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. What is the
probability that the sample mean will be between 39 and 48 minutes?

ANSWER:
0.8767


of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. So, 95% of all
sample means will fall between what two values?

ANSWER:
40.1 and 49.9 minutes

of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. So, 90% of the
sample means will be greater than what value?

ANSWER:
41.8 minutes

62. True or False: The amount of bleach a machine pours into bottles has a mean of 36 oz. with a standard deviation
of 0.15 oz. Suppose we take a random sample of 36 bottles filled by this machine. The sampling distribution of
the sample mean has a mean of 36.

ANSWER:
True
KEYWORDS: sampling distribution, mean, unbiased

the sample mean has a standard error of 0.15.

ANSWER:
False

the sample mean will be approximately normal only if the population sampled is normal.

ANSWER:
False


65. The amount of bleach a machine pours into bottles has a mean of 36 oz. with a standard deviation of 0.15 oz.
Suppose we take a random sample of 36 bottles filled by this machine. The probability that the mean of the
sample exceeds 36.01 oz. is __________.

ANSWER:
0.3446

sample is less than 36.03 is __________.

ANSWER:
0.8849

sample is between 35.94 and 36.06 oz. is __________.

ANSWER:
0.9836

sample is between 35.95 and 35.98 oz. is __________.

ANSWER:
0.1891

Suppose we take a random sample of 36 bottles filled by this machine. So, 95% of the sample means based on
samples of size 36 will be between __________ and __________.

ANSWER:
35.951 ; 36.049 ounces
KEYWORDS: sampling distribution, mean, value, central limit theorem


70. A manufacturer of power tools claims that the average amount of time required to assemble their top-of-the-line
table saw is 80 minutes with a standard deviation of 40 minutes. Suppose a random sample of 64 purchasers of
this table saw is taken. The mean of the sampling distribution of the sample mean is __________ minutes.

ANSWER:
80
KEYWORDS: sampling distribution, mean, unbiased

this table saw is taken. The standard deviation of the sampling distribution of the sample mean is __________
minutes.

ANSWER:
5

this table saw is taken. The probability that the sample mean will be less than 82 minutes is __________.

ANSWER:
0.6554

this table saw is taken. The probability that the sample mean will be between 77 and 89 minutes is __________.

ANSWER:
0.6898

this table saw is taken. The probability that the sample mean will be greater than 88 minutes is __________.

ANSWER:
0.0548

this table saw is taken. So, 95% of the sample means based on samples of size 64 will be between __________
and __________.

ANSWER:
70.2 ; 89.8 minutes

KEYWORDS: sampling distribution, mean, value, central limit theorem

76. To use the normal distribution to approximate the binomial distribution, we need ______ and ______ to be at
least 5.

ANSWER:
np ; n(1-p)
KEYWORDS: sampling distribution, proportion, central limit theorem

77. True or False: The sample mean is an unbiased estimate of the population mean.

ANSWER:
True
KEYWORDS: mean, unbiased

78. True or False: The sample proportion is an unbiased estimate of the population proportion.

ANSWER:
True
KEYWORDS: proportion, unbiased

79. True or False: The mean of the sampling distribution of a sample proportion is the population proportion, p.

ANSWER:
True
KEYWORDS: sampling distribution, proportion

80. True or False: The standard error of the sampling distribution of a sample proportion is
( ) 1
S S
p p
n
where
S
p is the sample proportion.

ANSWER:
False

81. True or False: The standard deviation of the sampling distribution of a sample proportion is
( ) 1 p p
n
where
p is the population proportion.

ANSWER:
True

82. True or False: A sample of size 25 provides a sample variance of 400. The standard error, in this case equal to
4, is best described as the estimate of the standard deviation of means calculated from samples of size 25.


ANSWER:
True
KEYWORDS: standard error

83. True or False: An unbiased estimator will have a value, on average across samples, equal to the population
parameter value.

ANSWER:
True
KEYWORDS: unbiased

84. True or False: In inferential statistics, the standard error of the sample mean assesses the uncertainty or error of
estimation.

ANSWER:
True
KEYWORDS: mean, standard error

85. Assume that house prices in a neighborhood are normally distributed with a standard deviation of $20,000. A
random sample of 16 observations is taken. What is the probability that the sample mean differs from the
population mean by more than $5,000?

ANSWER:
0.3173


TABLE 7-1

Times spent studying by students in the week before final exams follow a normal distribution with a standard
deviation of 8 hours. A random sample of 4 students was taken in order to estimate the mean study time for the
population of all students.

86. Referring to Table 7-1, what is the probability that the sample mean exceeds the population mean by more than
2 hours?

ANSWER:
0.3085

87. Referring to Table 7-1, what is the probability that the sample mean is more than 3 hours below the population
mean?

ANSWER:
0.2266

88. Referring to Table 7-1, what is the probability that the sample mean differs from the population mean by less
than 2 hours?

ANSWER:
0.3829

89. Referring to Table 7-1, what is the probability that the sample mean differs from the population mean by more
than 3 hours?

ANSWER:
0.4533

TABLE 7-2

The mean selling price of new homes in a city over a 1-year period was $115,000. The population standard
deviation was $25,000. A random sample of 100 new home sales from this city was taken.

90. Referring to Table 7-2, what is the probability that the sample mean selling price was more than $110,000?

ANSWER:
0.9772

91. Referring to Table 7-2, what is the probability that the sample mean selling price was between $113,000 and
$117,000?

ANSWER:

0.5763

92. Referring to Table 7-2, what is the probability that the sample mean selling price was between $114,000 and
$116,000?

ANSWER:
0.3108

93. Referring to Table 7-2, without doing the calculations, state in which of the following ranges the sample mean
selling price is most likely to lie.
a) $113,000-$115,000
b) $114,000-$116,000
c) $115,000-$117,000
d) $116,000-$118,000

ANSWER:
b

TABLE 7-3

The lifetimes of a certain brand of light bulbs are known to be normally distributed with a mean of 1,600 hours and
a standard deviation of 400 hours. A random sample of 64 of these light bulbs is taken.

94. Referring to Table 7-3, what is the probability that the sample mean lifetime is more than 1,550 hours?

ANSWER:
0.8413

95. Referring to Table 7-3, the probability is 0.15 that the sample mean lifetime is more than how many hours?

ANSWER:
1,651.82 hours

96. Referring to Table 7-3, the probability is 0.20 that the sample mean lifetime differs from the population mean
lifetime by at least how many hours?

ANSWER:
64.08 hours

TABLE 7-4


According to a survey, only 15% of customers who visited the web site of a major retail store made a purchase.
Random samples of size 50 are selected.

97. Referring to Table 7-4, the average of all the sample proportions of customers who will make a purchase after
visiting the web site is _______.

ANSWER:
0.15 or 15%
KEYWORDS: sampling distribution, proportion, mean

98. Referring to Table 7-4, the standard deviation of all the sample proportions of customers who will make a
purchase after visiting the web site is ________.

ANSWER:
0.05050
KEYWORDS: sampling distribution, proportion, standard error

99. True of False: Referring to Table 7-4, the requirements for using a normal distribution to approximate a
binomial distribution are fulfilled.

ANSWER:
True
KEYWORDS: sampling distribution, proportion, central limit theorem

100. Referring to Table 7-4, what proportion of the samples will have between 20% and 30% of customers who
will make a purchase after visiting the web site?

ANSWER:
0.1596
KEYWORDS: sampling distribution, proportion, probability

101. Referring to Table 7-4, what proportion of the samples will have less than 15% of customers who will make a
purchase after visiting the web site?

ANSWER:
0.5

102. Referring to Table 7-4, what is the probability that a random sample of 50 will have at least 30% of customers
who will make a purchase after visiting the web site?

ANSWER:
0.0015
103. Referring to Table 7-4, 90% of the samples will have less than what percentage of customers who will make a
purchase after visiting the web site?

ANSWER:

21.47
KEYWORDS: sampling distribution, proportion, value

104. Referring to Table 7-4, 90% of the samples will have more than what percentage of customers who will make
a purchase after visiting the web site?

ANSWER:
8.528

105. A study at a college on the west coast reveals that, historically, 45% of their students are minority students.
The expected percentage of minority students in their next batch of freshmen is _______.

ANSWER:
45%
KEYWORDS: sampling distribution, proportion, mean

106. A study at a college on the west coast reveals that, historically, 45% of their students are minority students. If
random samples of size 75 are selected, the standard error of the proportions of students in the samples who are
minority students is _________.

ANSWER:
0.05745
KEYWORDS: sampling distribution, proportion, standard error

a random sample of size 75 is selected, the probability is _______ that between 30% and 50% of the students in
the sample will be minority students.

ANSWER:
0.8034

a random sample of size 75 is selected, the probability is _______ that more than half of the students in the
sample will be minority students.

ANSWER:
0.1920

random samples of size 75 are selected, 80% of the samples will have less than ______% of minority students.

ANSWER:
49.83

random samples of size 75 are selected, 95% of the samples will have more than ______% of minority students.

ANSWER:
35.55


CHAPTER 8: CONFIDENCE INTERVAL ESTIMATION

1. The width of a confidence interval estimate for a proportion will be
a) narrower for 99% confidence than for 95% confidence.
b) wider for a sample size of 100 than for a sample size of 50.
c) narrower for 90% confidence than for 95% confidence.
d) narrower when the sample proportion is 0.50 than when the sample proportion is 0.20.

ANSWER:
c
KEYWORDS: confidence interval, proportion, properties, width

2. When determining the sample size for a proportion for a given level of confidence and sampling error, the
closer to 0.50 that p is estimated to be, the __________ the sample size required.
a) smaller
b) larger
c) The sample size is not affected.
d) The effect cannot be determined from the information given.

ANSWER:
b
KEYWORDS: confidence interval, proportion, properties

3. A 99% confidence interval estimate can be interpreted to mean that
a) if all possible samples are taken and confidence interval estimates are developed, 99% of them would
include the true population mean somewhere within their interval.
b) we have 99% confidence that we have selected a sample whose interval does include the population
mean.

ANSWER:
c
KEYWORDS: confidence interval, interpretation

4. If you were constructing a 99% confidence interval of the population mean based on a sample of n = 25, where
the standard deviation of the sample s = 0.05, the critical value of t will be
a) 2.7970.
b) 2.7874.
c) 2.4922.
d) 2.4851.

ANSWER:
a
KEYWORDS: critical value, t distribution

5. Which of the following is NOT true about the Students t distribution?
a) It has more area in the tails and less in the center than does the normal distribution.
b) It is used to construct confidence intervals for the population mean when the population standard
deviation is known.

c) It is bell shaped and symmetrical.
d) As the number of degrees of freedom increases, the t distribution approaches the normal distribution.

ANSWER:
b
KEYWORDS: t distribution, properties

6. True or False: The t distribution is used to construct confidence intervals for the population mean when the
population standard deviation is unknown.

ANSWER:
True
KEYWORDS: confidence interval, mean, standard deviation unknown

7. The t distribution
a) assumes the population is normally distributed.
b) approaches the normal distribution as the sample size increases.
c) has more area in the tails than does the normal distribution.
d) all of the above

ANSWER:
d
KEYWORDS: t distribution, properties

8. It is desired to estimate the average total compensation of CEOs in the Service industry. Data were randomly
collected from 18 CEOs and the 97% confidence interval was calculated to be ($2,181,260, $5,836,180). Which
of the following interpretations is correct?
a) 97% of the sampled total compensation values fell between $2,181,260 and $5,836,180.
b) We are 97% confident that the mean of the sampled CEOs falls in the interval $2,181,260 to
$5,836,180.
c) In the population of Service industry CEOs, 97% of them will have total compensations that fall in the
interval $2,181,260 to $5,836,180.
d) We are 97% confident that the average total compensation of all CEOs in the Service industry falls in
the interval $2,181,260 to $5,836,180.

ANSWER:
d


9. It is desired to estimate the average total compensation of CEOs in the Service industry. Data were randomly
collected from 18 CEOs and the 97% confidence interval was calculated to be ($2,181,260, $5,836,180). Based
on the interval above, do you believe the average total compensation of CEOs in the Service industry is more
than $3,000,000?
a) Yes, and I am 97% confident of it.
b) Yes, and I am 78% confident of it.
c) I am 97% confident that the average compensation is $3,000,000.
d) I cannot conclude that the average exceeds $3,000,000 at the 97% confidence level.

ANSWER:
d

10. A confidence interval was used to estimate the proportion of statistics students that are females. A random
sample of 72 statistics students generated the following 90% confidence interval: (0.438, 0.642). Based on the
interval above, is the population proportion of females equal to 0.60?
a) No, and we are 90% sure of it.
b) No. The proportion is 54.17%.
c) Maybe. 0.60 is a believable value of the population proportion based on the information above.
d) Yes, and we are 90% sure of it.

ANSWER:
c
KEYWORDS: confidence interval, proportion, testing

11. A confidence interval was used to estimate the proportion of statistics students that are female. A random
sample of 72 statistics students generated the following 90% confidence interval: (0.438, 0.642). Using the
information above, what size sample would be necessary if we wanted to estimate the true proportion to within
0.08 using 95% confidence?
a) 105
b) 150
c) 420
d) 597

ANSWER:
b
KEYWORDS: proportion, sample size determination


12. When determining the sample size necessary for estimating the true population mean, which factor is NOT
considered when sampling with replacement?
a) the population size
b) the population standard deviation
c) the level of confidence desired in the estimate
d) the allowable or tolerable sampling error

ANSWER:
a
KEYWORDS: mean, sample size determination

13. Suppose a 95% confidence interval for turns out to be (1,000, 2,100). Give a definition of what it means to
be 95% confident in an inference.
a) In repeated sampling, the population parameter would fall in the given interval 95% of the time.
b) In repeated sampling, 95% of the intervals constructed would contain the population mean.
c) 95% of the observations in the entire population fall in the given interval.
d) 95% of the observations in the sample fall in the given interval.

ANSWER:
b

14. Suppose a 95% confidence interval for turns out to be (1,000, 2,100). To make more useful inferences from
the data, it is desired to reduce the width of the confidence interval. Which of the following will result in a
reduced interval width?
a) Increase the sample size.
b) Decrease the confidence level.
c) Increase the sample size and decrease the confidence level.
d) Increase the confidence level and decrease the sample size.

ANSWER:
c
KEYWORDS: confidence interval, properties, width


15. Suppose a 95% confidence interval for has been constructed. If it is decided to take a larger sample and to
decrease the confidence level of the interval, then the resulting interval width would .
(Assume that the sample statistics gathered would not change very much for the new sample.)
a) be larger than the current interval width
b) be narrower than the current interval width
c) be the same as the current interval width
d) be unknown until actual sample sizes and reliability levels were determined

ANSWER:
b

16. In the construction of confidence intervals, if all other quantities are unchanged, an increase in the sample size
will lead to a interval.
a) narrower
b) wider
c) less significant
d) biased

ANSWER:
a

17. A major department store chain is interested in estimating the average amount its credit card customers spent on
their first visit to the chains new store in the mall. Fifteen credit card accounts were randomly sampled and
analyzed with the following results: X = $50.50 and s
2
= 400. Assuming the distribution of the amount spent
on their first visit is approximately normal, what is the shape of the sampling distribution of the sample mean
that will be used to create the desired confidence interval for ?
a) approximately normal with a mean of $50.50
b) a standard normal distribution
c) a t distribution with 15 degrees of freedom
d) a t distribution with 14 degrees of freedom

ANSWER:
d
KEYWORDS: confidence interval, mean, t distribution


18. A major department store chain is interested in estimating the average amount its credit card customers spent on
their first visit to the chains new store in the mall. Fifteen credit card accounts were randomly sampled and
analyzed with the following results: $50.50 X = and s
2
= 400. Construct a 95% confidence interval for the
average amount its credit card customers spent on their first visit to the chains new store in the mall, assuming
that the amount spent follows a normal distribution.
a) $50.50 $9.09
b) $50.50 $10.12
c) $50.50 $11.00
d) $50.50 $11.08

ANSWER:
d

19. Private colleges and universities rely on money contributed by individuals and corporations for their operating
expenses. Much of this money is put into a fund called an endowment, and the college spends only the interest
earned by the fund. A recent survey of 8 private colleges in the United States revealed the following
endowments (in millions of dollars): 60.2, 47.0, 235.1, 490.0, 122.6, 177.5, 95.4, and 220.0. What value will be
used as the point estimate for the mean endowment of all private colleges in the United States?
a) $1,447.8
b) $180.975
c) $143.042
d) $8

ANSWER:
b
KEYWORDS: point estimate, mean

20. Private colleges and universities rely on money contributed by individuals and corporations for their operating
expenses. Much of this money is put into a fund called an endowment, and the college spends only the interest
earned by the fund. A recent survey of 8 private colleges in the United States revealed the following
endowments (in millions of dollars): 60.2, 47.0, 235.1, 490.0, 122.6, 177.5, 95.4, and 220.0. Summary statistics
yield X = 180.975 and s =143.042. Calculate a 95% confidence interval for the mean endowment of all the
private colleges in the United States, assuming a normal distribution for the endowments.
a) $180.975 $94.066
b) $180.975 $99.123
c) $180.975 $116.621
d) $180.975 $119.605

ANSWER:
d


21. A university system enrolling hundreds of thousands of students is considering a change in the way students pay
for their education. Presently the students pay $55 per credit hour. The university system administrators are
contemplating charging each student a set fee of $750 per quarter, regardless of how many credit hours each
takes. To see if this proposal would be economically feasible, the administrators would like to know how many
credit hours, on the average, each student takes per quarter. A random sample of 250 students yields a mean of
14.1 credit hours per quarter and a standard deviation of 2.3 credit hours per quarter. Suppose the administration
wanted to estimate the mean to within 0.1 hours at 95% reliability and assumed that the sample standard
deviation provided a good estimate for the population standard deviation. How large a sample would they need
to take?

ANSWER:
n = 2033

22. As an aid to the establishment of personnel requirements, the director of a hospital wishes to estimate the mean
number of people who are admitted to the emergency room during a 24-hour period. The director randomly
selects 64 different 24-hour periods and determines the number of admissions for each. For this sample,
X = 19.8 and s
2
= 25. Which of the following assumptions is necessary in order for a confidence interval to be
valid?
a) The population sampled from has an approximate normal distribution.
b) The population sampled from has an approximate t distribution.
c) The mean of the sample equals the mean of the population.
d) None of these assumptions are necessary.

ANSWER:
d

X = 19.8 and s
2
= 25. Estimate the mean number of admissions per 24-hour period with a 95% confidence
interval.

ANSWER:
19.8 1.249


X = 19.8 and s
2
= 25. If the director wishes to estimate the mean number of admissions per 24-hour period to
within 1 admission with 99% reliability, what size sample should she choose?

ANSWER:
n = 166

25. A university dean is interested in determining the proportion of students who receive some sort of financial aid.
Rather than examine the records for all students, the dean randomly selects 200 students and finds that 118 of
them are receiving financial aid. Use a 90% confidence interval to estimate the true proportion of students who
receive financial aid.

ANSWER:
0.59 0.057
KEYWORDS: confidence interval, proportion

them are receiving financial aid. The 95% confidence interval for p is 0.59 0.07. Interpret this interval.
a) We are 95% confident that the true proportion of all students receiving financial aid is between 0.52 and
0.66.
b) 95% of the students get between 52% and 66% of their tuition paid for by financial aid.
c) We are 95% confident that between 52% and 66% of the sampled students receive some sort of
financial aid.
d) We are 95% confident that 59% of the students are on some sort of financial aid.

ANSWER:
a
KEYWORDS: confidence interval, proportion, interpretation


them are receiving financial aid. If the dean wanted to estimate the proportion of all students receiving financial
aid to within 3% with 99% reliability, how many students would need to be sampled?
a) n = 1,844
b) n = 1,784
c) n = 1,503
d) n = 1,435

ANSWER:
b

28. An economist is interested in studying the incomes of consumers in a particular region. The population standard
deviation is known to be $1,000. A random sample of 50 individuals resulted in an average income of $15,000.
What is the upper end point in a 99% confidence interval for the average income?
a) $15,052
b) $15,141
c) $15,330
d) $15,364

ANSWER:
d
KEYWORDS: confidence interval, mean, standardized normal distribution

What is the width of the 90% confidence interval?
a) $232.60
b) $364.30
c) $465.23
d) $728.60

ANSWER:
c
KEYWORDS: width, confidence interval, mean, standardized normal distribution

What sample size would the economist need to use for a 95% confidence interval if the width of the interval
should not be more than $100?
a) n = 1537
b) n = 385
c) n = 40
d) n = 20

ANSWER:
a

31. The head librarian at the Library of Congress has asked her assistant for an interval estimate of the mean
number of books checked out each day. The assistant provides the following interval estimate: from 740 to 920
books per day. What is an efficient, unbiased point estimate of the number of books checked out each day at the
Library of Congress?
a) 740
b) 830
c) 920
d) 1,660

ANSWER:
b

books per day. If the head librarian knows that the population standard deviation is 150 books checked out per
day, approximately how large a sample did her assistant use to determine the interval estimate?
a) 2
b) 3
c) 12
d) It cannot be determined from the information given.

ANSWER:
d

day, and she asked her assistant for a 95% confidence interval, approximately how large a sample did her
assistant use to determine the interval estimate?
a) 125
b) 13
c) 11
d) 4

ANSWER:
c

day, and she asked her assistant to use 25 days of data to construct the interval estimate, what confidence level
can she attach to the interval estimate?
a) 99.7%
b) 99.0%
c) 98.0%
d) 95.4%

ANSWER:
a

35. True or False: A race car driver tested his car for time from 0 to 60 mph, and in 20 tests obtained an average of
4.85 seconds with a standard deviation of 1.47 seconds. A 95% confidence interval for the 0 to 60 time is 4.52
seconds to 5.18 seconds.

ANSWER:
False

36. True or False: Given a sample mean of 2.1 and a sample standard deviation of 0.7, a 90% confidence interval
will have a width of 2.36.

ANSWER:
False

37. True or False: Given a sample mean of 2.1 and a population standard deviation of 0.7, a 90% confidence
interval will have a width of 2.36.

ANSWER:
False

38. True or False: A sample size of 5 provides a sample mean of 9.6. If the population variance is known to be 5
and the population distribution is assumed to be normal, the lower limit for a 92% confidence interval is 7.85.

ANSWER:
True

39. True or False: A random sample of 50 provides a sample mean of 31 with a standard deviation of s=14. The
upper bound of a 90% confidence interval estimate of the population mean is 34.32.

ANSWER:
True

40. True or False: In forming a 90% confidence interval for a population mean from a sample size of 22, the
number of degrees of freedom from the t distribution equals 22.

ANSWER:
False

41. True or False: Other things being equal, as the confidence level for a confidence interval increases, the width of
the interval increases.

ANSWER:
True
KEYWORDS: confidence interval, properties

42. True or False: The t distribution allows the calculation of confidence intervals for means when the actual
standard error is not known.

ANSWER:
True

43. True or False: The t distribution allows the calculation of confidence intervals for means for small samples
when the population variance is not known, regardless of the shape of the distribution in the population.

ANSWER:
False

44. True or False: For a t distribution with 12 degrees of freedom, the area between 2.6810 and 2.1788 is 0.980.

ANSWER:
False
KEYWORDS: t distribution

45. True or False: A sample of 100 fuses from a very large shipment is found to have 10 that are defective. The
0.95 confidence interval would indicate that, for this shipment, the proportion of defective fuses is between 0
and 0.28.

ANSWER:
False

46. True or False: The sample mean is a point estimate of the population mean.

ANSWER:
True

47. True or False: The confidence interval estimate of the population mean is constructed around the sample mean.

ANSWER:
True
KEYWORDS: confidence interval, mean

48. True or False: The confidence interval estimate of the population proportion is constructed around the sample
proportion.

ANSWER:
True


49. True or False: A point estimate consists of a single sample statistic that is used to estimate the true population
parameter.

ANSWER:
True
KEYWORDS: point estimate

50. True or False: The confidence interval obtained will always correctly estimate the population parameter.

ANSWER:
False

51. True or False: Other things being equal, the confidence interval for the mean will be wider for 95% confidence
than for 90% confidence.

ANSWER:
True

52. True or False: The t distribution is used to develop a confidence interval estimate of the population mean when
the population standard deviation is unknown.

ANSWER:
True

53. True or False: The t distribution is used to develop a confidence interval estimate of the population proportion
when the population standard deviation is unknown.

ANSWER:
False
KEYWORDS: confidence interval, proportion, t distribution

54. True or False: The standardized normal distribution is used to develop a confidence interval estimate of the
population proportion regardless of whether the population standard deviation is known.

ANSWER:
True
KEYWORDS: confidence interval, proportion, standardized normal distribution


55. True or False: The standardized normal distribution is used to develop a confidence interval estimate of the
population proportion when the sample size is sufficiently large.

ANSWER:
True
KEYWORDS: confidence interval, proportion, standardized normal distribution

56. True or False: The t distribution approaches the standardized normal distribution when the number of degrees of
freedom increases.

ANSWER:
True
KEYWORDS: t distribution, standardized normal distribution

57. True or False: In estimating the population mean with the population standard deviation unknown, if the sample
size is 12, there will be 6 degrees of freedom.

ANSWER:
False

58. True or False: The difference between the sample mean and the population mean is called the sampling error.

ANSWER:
True

59. True or False: The difference between the sample proportion and the population proportion is called the
sampling error.

ANSWER:
True

60. True or False: The difference between the sample size and the population size is called the sampling error.

ANSWER:
False


61. True or False: The difference between the upper limit of a confidence interval and the point estimate used in
constructing the confidence interval is called the sampling error.

ANSWER:
True

62. True or False: The difference between the lower limit of a confidence interval and the point estimate used in
constructing the confidence interval is called the sampling error.

ANSWER:
True

63. True or False: Sampling error equals to half the width of a confidence interval.

ANSWER:
True

64. True or False: The width of a confidence interval equals twice the sampling error.

ANSWER:
True

65. True or False: The sampling error can either be positive or negative.

ANSWER:
True

66. True or False: A population parameter is used to estimate a confidence interval.

ANSWER:
False
KEYWORDS: point estimate, confidence interval


67. True or False: For a given data set and confidence level, the confidence interval will be wider for 95%
confidence than for 90% confidence.

ANSWER:
True

TABLE 8-1

A random sample of 100 stores from a large chain of 1,000 garden supply stores was selected to determine the
average number of lawnmowers sold at an end-of-season clearance sale. The sample results indicated an average of
6 and a standard deviation of 2 lawnmowers sold. A 95% confidence interval (5.623 to 6.377) was established based
on these results.

68. True or False: Referring to Table 8-1, if the population had consisted of 10,000 stores, the confidence interval
estimate of the mean would have been wider in range.

ANSWER:
False
KEYWORDS: confidence interval, mean, properties, width

69. True or False: Referring to Table 8-1, of all possible samples of 100 stores drawn from the population of 1,000
stores, 95% of the sample means will fall between 5.623 and 6.377 lawnmowers.

ANSWER:
False
KEYWORDS: confidence interval, mean, interpretation

70. True or False: Referring to Table 8-1, of all possible samples of 100 stores taken from the population of 1,000
stores, 95% of the confidence intervals developed will contain the true population mean within the interval.

ANSWER:
True

71. True or False: Referring to Table 8-1, there are 10 possible samples of 100 stores that can be selected out of the
population of 1,000 stores.

ANSWER:
False

72. True or False: Referring to Table 8-1, 95% of the stores have sold between 5.623 and 6.377 lawnmowers.

ANSWER:
False


73. True or False: Referring to Table 8-1, we do not know for sure whether the true population mean is between
5.623 and 6.377 lawnmowers sold.

ANSWER:
True

TABLE 8-2

The managers of a company are worried about the morale of their employees. In order to determine if a problem in
this area exists, they decide to evaluate the attitudes of their employees with a standardized test. They select the
Fortunato test of job satisfaction, which has a known standard deviation of 24 points.

74. Referring to Table 8-2, they should sample ________ employees if they want to estimate the mean score of the
employees within 5 points with 90% confidence.

ANSWER:
63

75. Referring to Table 8-2, due to financial limitations, the managers decide to take a sample of 45 employees. This
yields a mean score of 88.0 points. A 90% confidence interval would go from ________ to ________.

ANSWER:
82.12 to 93.88

76. True or False: Referring to Table 8-2, this confidence interval is only valid if the scores on the Fortunato test are
normally distributed.

ANSWER:
False
EXPLANATION: With a sample size of 45, this confidence interval will still be valid if the scores are not normally
distributed, due to the central limit theorem.
KEYWORDS: confidence interval, mean, standardized normal distribution, central limit theorem


TABLE 8-3

A quality control engineer is interested in the mean length of sheet insulation being cut automatically by machine.
The desired length of the insulation is 12 feet. It is known that the standard deviation in the cutting length is 0.15
feet. A sample of 70 cut sheets yields a mean length of 12.14 feet. This sample will be used to obtain a 99%
confidence interval for the mean length cut by machine.

77. Referring to Table 8-3, the critical value to use in obtaining the confidence interval is ________.

ANSWER:
2.58

78. Referring to Table 8-3, the confidence interval goes from ________ to ________.

ANSWER:
12.09; 12.19

79. True or False: Referring to Table 8-3, the confidence interval indicates that the machine is not working
properly.

ANSWER:
True
KEYWORDS: confidence interval, mean, standardized normal distribution, interpretation

80. True or False: Referring to Table 8-3, the confidence interval is valid only if the lengths cut are normally
distributed.

ANSWER:
False
EXPLANATION: With a sample size of 70, this confidence interval will still be valid if the lengths cut are not
normally distributed, due to the central limit theorem.
KEYWORDS: confidence interval, mean, standardized normal distribution, central limit theorem

81. Referring to Table 8-3, suppose the engineer had decided to estimate the mean length to within 0.03 with 99%
confidence. Then the sample size would be ________.

ANSWER:
166


TABLE 8-4

To become an actuary, it is necessary to pass a series of 10 exams, including the most important one, an exam in
probability and statistics. An insurance company wants to estimate the mean score on this exam for actuarial
students who have enrolled in a special study program. They take a sample of 8 actuarial students in this program
and determine that their scores are: 2, 5, 8, 8, 7, 6, 5, and 7. This sample will be used to calculate a 90% confidence
interval for the mean score for actuarial students in the special study program.

82. Referring to Table 8-4, the mean of the sample is __________, while the standard deviation of the sample is
__________.

ANSWER:
6.0; 2.0
KEYWORDS: confidence interval

83. Referring to Table 8-4, the confidence interval will be based on __________ degrees of freedom.

ANSWER:
7

84. Referring to Table 8-4, the critical value used in constructing a 90% confidence interval is __________.

ANSWER:
1.8946

85. Referring to Table 8-4, a 90% confidence interval for the mean score of actuarial students in the special
program is from __________ to __________.

ANSWER:
4.66; 7.34

86. True or False: Referring to Table 8-4, for the confidence interval to be valid, it is necessary that test scores of
students in the special study program on the actuarial exam be normally distributed.

ANSWER:
True


87. True or False: Referring to Table 8-4, it is possible that the confidence interval obtained will not contain the
mean score for all actuarial students in the special class.

ANSWER:
True

88. True or False: Referring to Table 8-4, if we use the same sample information to obtain a 95% confidence
interval, the resulting interval would be narrower than the one obtained here with 90% confidence.

ANSWER:
False

89. Suppose a department store wants to estimate the average age of the customers of its contemporary apparel
department, correct to within 2 years, with level of confidence equal to 0.95. Management believes that the
standard deviation is 8 years. The sample size they should take is ________.

ANSWER:
62

TABLE 8-5

The actual voltages of power packs labeled as 12 volts are as follows: 11.77, 11.90, 11.64, 11.84, 12.13, 11.99, and
11.77.

90. Referring to Table 8-5, a confidence interval for this sample would be based on the t distribution with
__________ degrees of freedom.

ANSWER:
6

91. Referring to Table 8-5, the critical value for a 99% confidence interval for this sample is __________.

ANSWER:
3.7074


92. Referring to Table 8-5, a 99% confidence interval for the mean voltage of the power packs is from __________
to __________.

ANSWER:
11.6367; 12.0891

93. True or False: Referring to Table 8-5, a 95% confidence interval for the mean voltage of the power pack is
wider than a 99% confidence interval.

ANSWER:
False

94. True or False: Referring to Table 8-5, a 99% confidence interval will contain 99% of the voltages for all such
power packs.

ANSWER:
False

95. True or False: Referring to Table 8-5, a confidence interval estimate of the population mean would only be valid
if the distribution of voltages is normal.

ANSWER:
True

96. True or False: Referring to Table 8-5, a 90% confidence interval calculated from the same data would be
narrower than a 99% confidence interval.

ANSWER:
True

97. True or False: Referring to Table 8-5, it is possible that the 99% confidence interval calculated from the data
will not contain the mean voltage for the sample.

ANSWER:
False


will not contain the mean voltage for the entire population.

ANSWER:
True

TABLE 8-6

A sample of salary offers (in thousands of dollars) given to management majors is: 28, 31, 26, 32, 27, 28, 27, 30, 31,
and 29. Using this data to obtain a 95% confidence interval resulted in an interval from 27.5 to 30.3.

99. True or False: Referring to Table 8-6, 95% of the time, the sample mean salary offer to management majors will
fall between 27.5 and 30.3.

ANSWER:
False

100. True or False: Referring to Table 8-6, 95% of the salary offers are between 27.5 and 30.3.

ANSWER:
False

101. True or False: Referring to Table 8-6, it is possible that the mean of the population is between 27.5 and 30.3.

ANSWER:
True

102. True or False: Referring to Table 8-6, it is possible that the mean of the population is not between 27.5 and
30.3.

ANSWER:
True


103. True or False: Referring to Table 8-6, 95% of the sample means will fall between 27.5 and 30.3.

ANSWER:
False

104. True or False: Referring to Table 8-6, 95% of all confidence intervals constructed similarly to this one will
contain the mean of the population.

ANSWER:
True

105. True or False: Referring to Table 8-6, a 99% confidence interval for the mean of the population from the same
sample would be wider than 27.5 to 30.3.

ANSWER:
True

106. True or False: Referring to Table 8-6, the confidence interval obtained is valid only if the distribution of the
population of salary offers is normal.

ANSWER:
True

107. A prison official wants to estimate the proportion of cases of recidivism. Examining the records of 250
convicts, the official determines that there are 65 cases of recidivism. A confidence interval will be obtained for
the proportion of cases of recidivism. Part of this calculation includes the estimated standard error of the sample
proportion. For this sample, the estimated standard error is __________.

ANSWER:
0.028


108. A prison official wants to estimate the proportion of cases of recidivism. Examining the records of 250
convicts, the official determines that there are 65 cases of recidivism. A 99% confidence interval for the
proportion of cases of recidivism would go from __________ to __________.

ANSWER:
0.189; 0.331

TABLE 8-7

After an extensive advertising campaign, the manager of a company wants to estimate the proportion of potential
customers that recognize a new product. She samples 120 potential consumers and finds that 54 recognize this
product. She uses this sample information to obtain a 95% confidence interval that goes from 0.36 to 0.54.

109. True or False: Referring to Table 8-7, the parameter of interest to the manager is the proportion of potential
customers in this sample that recognize the new product.

ANSWER:
False
KEYWORDS: confidence interval, proportion, parameter

110. True or False: Referring to Table 8-7, the parameter of interest is 54/120 = 0.45.

ANSWER:
False

111. True or False: Referring to Table 8-7, this interval requires the use of the t distribution to obtain the
confidence coefficient.

ANSWER:
False
KEYWORDS: confidence interval, proportion, t distribution

112. True or False: Referring to Table 8-7, this interval requires the assumption that the distribution of the number
of people recognizing the product has a normal distribution.

ANSWER:
False


113. True or False: Referring to Table 8-7, 95% of the time, the proportion of people that recognize the product
will fall between 0.36 and 0.54.

ANSWER:
False

114. True or False: Referring to Table 8-7, 95% of the time, the sample proportion of people that recognize the
product will fall between 0.36 and 0.54.

ANSWER:
False

115. True or False: Referring to Table 8-7, 95% of the people will recognize the product between 36% and 54% of
the time.

ANSWER:
False

116. True or False: Referring to Table 8-7, it is possible that the true proportion of people that recognize the
product is between 0.36 and 0.54.

ANSWER:
True

117. True or False: Referring to Table 8-7, it is possible that the true proportion of people that recognize the
product is not between 0.36 and 0.54.

ANSWER:
True


118. The head of a computer science department is interested in estimating the proportion of students entering the
department who will choose the new computer engineering option. Suppose there is no information about the
proportion of students who might choose the option. What size sample should the department head take if she
wants to be 95% confident that the estimate is within 0.10 of the true proportion?

ANSWER:
97

119. The head of a computer science department is interested in estimating the proportion of students entering the
department who will choose the new computer engineering option. A preliminary sample indicates that the
proportion will be around 0.25. Therefore, what size sample should the department head take if she wants to be
95% confident that the estimate is within 0.10 of the true proportion?

ANSWER:
73

TABLE 8-8

A hotel chain wants to estimate the average number of rooms rented daily in each month. The population of rooms
rented daily is assumed to be normally distributed for each month with a standard deviation of 24 rooms.

120. Referring to Table 8-8, during January, a sample of 16 days has a sample mean of 48 rooms. This
information is used to calculate an interval estimate for the population mean to be from 40 to 56 rooms. What is
the level of confidence of this interval?

ANSWER:
81.76%

121. Referring to Table 8-8, during February, a sample of 25 days has a sample mean of 37 rooms. Use this
information to calculate a 92% confidence interval for the population mean.

ANSWER:
28.60 to 45.40


122. The county clerk wants to estimate the proportion of retired voters who will need special election facilities.
The clerk wants to find a 95% confidence interval for the population proportion which extends at most 0.07 to
either side of the sample proportion. How large a sample must be taken to assure these conditions are met?

ANSWER:
196

123. The county clerk wants to estimate the proportion of retired voters who will need special election facilities.
Suppose a sample of 400 retired voters was taken. If 150 need special election facilities, calculate an 80%
confidence interval for the population proportion.

ANSWER:
0.344 to 0.406

TABLE 8-9

A wealthy real estate investor wants to decide whether it is a good investment to build a high-end shopping complex
in a suburban county in Chicago. His main concern is the total market value of the 3,605 houses in the suburban
county. From past experience, the standard deviation of market housing prices is estimated to be $40,500. He
commissioned a statistical consulting group to take a sample of 200 houses and obtained a sample average market
price of $225,000 and a sample standard deviation of $38,700. The consulting group also found that the average
differences between market prices and appraised prices was $125,000, with a standard deviation of $3,400. Also,
the proportion of houses in the sample that were appraised for higher than the market prices was 0.24.

124. Referring to Table 8-9, if he wants a 95% confidence on estimating the true population average market price
of the houses in the suburban county to be within $10,000, how large a sample will he need?

ANSWER:
62
EXPLANATION: This is a sample size with a finite population correction factor.
KEYWORDS: mean, sample size determination, finite population correction

125. Referring to Table 8-9, what will be the 90% confidence interval for the average market price of the houses in
the suburban county constructed by the consulting group?

ANSWER:
$220,604.42 to $229,395.58
EXPLANATION: This is a confidence interval estimate for the mean with an unknown standard deviation and a
finite population correction factor.
KEYWORDS: confidence interval, mean, finite population correction

126. Referring to Table 8-9, what will be the 90% confidence interval for the total market price of the houses in the
suburban county constructed by the consulting group?

ANSWER:
$795,278,939.53 to $826,971,060.47
KEYWORDS: confidence interval, total amount, finite population correction


127. Referring to Table 8-9, what will be the 90% confidence interval for the total difference between the market
prices and appraised prices of the houses in the suburban county constructed by the consulting group?

ANSWER:
$449,232,839.65 to $452,017,160.35
KEYWORDS: confidence interval, total difference, finite population correction

128. Referring to Table 8-9, what will be the 90% confidence interval for the population proportion of houses that
will be appraised for higher than the market prices?

ANSWER:
0.1917 to 0.2883
EXPLANATION: This is a confidence interval estimate for the proportion with a finite population correction factor.
KEYWORDS: confidence interval, proportion, finite population correction

129. A quality control engineer is interested in estimating the proportion of defective items coming off a
production line. In a sample of 300 items, 27 are defective. A 90% confidence interval for the proportion of
defectives from this production line would go from __________ to __________.

ANSWER:
0.063; 0.117

TABLE 8-10

The president of a university would like to estimate the proportion of the student population who owns a personal
computer. In a sample of 500 students, 417 own a personal computer.

130. True or False: Referring to Table 8-10, the parameter of interest is the average number of students in the
population who own a personal computer.

ANSWER:
False

131. True or False: Referring to Table 8-10, the parameter of interest is the proportion of the student population
who own a personal computer.

ANSWER:
True

132. Referring to Table 8-10, the critical value for a 99% confidence interval for this sample is __________.

ANSWER:
2.5758


133. Referring to Table 8-10, a 99% confidence interval for the proportion of the student population who own a
personal computer is from __________ to __________.

ANSWER:
0.7911; 0.8769

134. Referring to Table 8-10, the sampling error of a 99% confidence interval for the proportion of the student
population who own a personal computer is __________.

ANSWER:
0.04286
KEYWORDS: confidence interval, proportion, sampling error

135. True or False: Referring to Table 8-10, a 95% confidence interval for the proportion of the student population
who own a personal computer is narrower than a 99% confidence interval.

ANSWER:
True

136. True or False: Referring to Table 8-10, a 99% confidence interval will contain 99% of the student population
who own a personal computer.

ANSWER:
False


137. True or False: Referring to Table 8-10, a confidence interval estimate of the population proportion would only
be valid if the distribution of the number of students who own a personal computer is normal.

ANSWER:
False

138. True or False: Referring to Table 8-10, a 90% confidence interval calculated from the same data would be
narrower than a 99% confidence interval.

ANSWER:
True

will not contain the sample proportion of students who own a personal computer.

ANSWER:
False

will not contain the proportion of the student population who own a personal computer.

ANSWER:
True

141. True or False: Referring to Table 8-10, we are 99% confident that the average numbers of the student
population who own a personal computer is between 0.7911 and 0.8769.

ANSWER:
False

142. True or False: Referring to Table 8-10, we are 99% confident that between 79.11% and 87.69% of the student
population own a personal computer.

ANSWER:
True

TABLE 8-11

The superintendent of a unified school district of a small town wants to make sure that no more than 5% of the
students skip more than 10 days of school in a year. A random sample of 145 students showed that 12 students
skipped more than 10 days of school last year.


143. Referring to Table 8-11, what is the critical value for the 95% one-sided confidence interval for the proportion
of students who skipped more than 10 days of school last year?

ANSWER:
1.6449
KEYWORDS: confidence interval, proportion, one-sided, critical value

144. Referring to Table 8-11, what is the upper bound of the 95% one-sided confidence interval for the proportion
of students who skipped more than 10 days of school last year?

ANSWER:
0.1204
KEYWORDS: confidence interval, proportion, one-sided

145. True or False: Referring to Table 8-11, the superintendent can conclude with a 95% level of confidence that
no more than 5% of the students in the unified school district skipped more than 10 days of school last year.

ANSWER:
False
KEYWORDS: confidence interval, proportion, one-sided, interpretation

TABLE 8-12

The president of a university is concerned that illicit drug use on campus is higher than the 1% acceptable level. A
random sample of 250 students revealed that 7 of them had used illicit drugs during the last 12 months.

146. Referring to Table 8-12, what is the critical value for the 90% one-sided confidence interval for the proportion
of students who had used illicit drugs during the last 12 months?

ANSWER:
1.2816
KEYWORDS: confidence interval, proportion, one-sided, critical value


147. Referring to Table 8-12, what is the upper bound of the 90% one-sided confidence interval for the proportion
of students who had used illicit drugs during the last 12 months?

ANSWER:
0.04137
KEYWORDS: confidence interval, proportion, one-sided

148. True or False: Referring to Table 8-12, the superintendent can be 90% confident that no more than 5% of the
students at the university had used illicit drugs during the last 12 months.

ANSWER:
True

149. True or False: Referring to Table 8-12, using the 90% one-sided confidence interval, the superintendent can
be 95% confident that no more than 5% of the students at the university had used illicit drugs during the last 12
months.

ANSWER:
False

150. True or False: Referring to Table 8-12, using the 90% one-sided confidence interval, the superintendent can
be 85% confident that no more than 5% of the students at the university had used illicit drugs during the last 12
months.

ANSWER:
True

CHAPTER 9: FUNDAMENTALS OF HYPOTHESIS TESTING: ONE-
SAMPLE TESTS

1. Which of the following would be an appropriate null hypothesis?
a) The mean of a population is equal to 55.
b) The mean of a sample is equal to 55.
c) The mean of a population is greater than 55.
d) Only (a) and (c) are true.

ANSWER:
a
KEYWORDS: form of hypothesis

2. Which of the following would be an appropriate null hypothesis?
a) The population proportion is less than 0.65.
b) The sample proportion is less than 0.65.
c) The population proportion is no less than 0.65.
d) The sample proportion is no less than 0.65.

ANSWER:
c

3. Which of the following would be an appropriate alternative hypothesis?
a) The mean of a population is equal to 55.
b) The mean of a sample is equal to 55.
c) The mean of a population is greater than 55.
d) The mean of a sample is greater than 55.

ANSWER:
c

4. Which of the following would be an appropriate alternative hypothesis?
a) The population proportion is less than 0.65.
b) The sample proportion is less than 0.65.
c) The population proportion is no less than 0.65.
d) The sample proportion is no less than 0.65.

ANSWER:
a

5. A Type II error is committed when
a) we reject a null hypothesis that is true.
b) we don't reject a null hypothesis that is true.
c) we reject a null hypothesis that is false.
d) we don't reject a null hypothesis that is false.

ANSWER:
d
KEYWORDS: type II error

6. A Type I error is committed when
a) we reject a null hypothesis that is true.
b) we don't reject a null hypothesis that is true.
c) we reject a null hypothesis that is false.
d) we don't reject a null hypothesis that is false.

ANSWER:
a
KEYWORDS: type I error

7. The power of a test is measured by its capability of
a) rejecting a null hypothesis that is true.
b) not rejecting a null hypothesis that is true.
c) rejecting a null hypothesis that is false.
d) not rejecting a null hypothesis that is false.

ANSWER:
c
KEYWORDS: power

8. If we are performing a two-tailed test of whether = 100, the probability of detecting a shift of the mean to 105
will be ________ the probability of detecting a shift of the mean to 110.
a) less than
b) greater than
c) equal to
d) not comparable to

ANSWER:
a
KEYWORDS: power


9. True or False: For a given level of significance, if the sample size is increased, the power of the test will
increase.

ANSWER:
True
KEYWORDS: power, level of significance, sample size

10. True or False: For a given level of significance, if the sample size is increased, the probability of committing a
Type I error will increase.

ANSWER:
False
KEYWORDS: level of significance, sample size, type I error

11. True or False: For a given level of significance, if the sample size is increased, the probability of committing a
Type II error will increase.

ANSWER:
False
KEYWORDS: level of significance, sample size, type II error

12. True or False: For a given sample size, the probability of committing a Type II error will increase when the
probability of committing a Type I error is reduced.

ANSWER:
True
KEYWORDS: sample size, type I error, type II error

13. If an economist wishes to determine whether there is evidence that average family income in a community
exceeds $25,000
a) either a one-tailed or two-tailed test could be used with equivalent results.
b) a one-tailed test should be utilized.
c) a two-tailed test should be utilized.

ANSWER:
b
KEYWORDS: one-tailed test


14. If an economist wishes to determine whether there is evidence that average family income in a community
equals $25,000
a) either a one-tailed or two-tailed test could be used with equivalent results.
b) a one-tailed test should be utilized.
c) a two-tailed test should be utilized.

ANSWER:
c
KEYWORDS: two-tailed test

15. If the p-value is less than o in a two-tailed test,
a) the null hypothesis should not be rejected.
b) the null hypothesis should be rejected.
c) a one-tailed test should be used.
d) no conclusion should be reached.

ANSWER:
b
KEYWORDS: p-value, level of significance

16. If a test of hypothesis has a Type I error probability ( o) of 0.01, we mean
a) if the null hypothesis is true, we don't reject it 1% of the time.
b) if the null hypothesis is true, we reject it 1% of the time.
c) if the null hypothesis is false, we don't reject it 1% of the time.
d) if the null hypothesis is false, we reject it 1% of the time.

ANSWER:
b
KEYWORDS: type I error, level of significance

17. If the Type I error ( o) for a given test is to be decreased, then for a fixed sample size n
a) the Type II error ( | ) will also decrease.
b) the Type II error ( | ) will increase.
c) the power of the test will increase.
d) a one-tailed test must be utilized.

ANSWER:
b
KEYWORDS: type I error, type II error, sample size


18. For a given sample size n, if the level of significance ( o) is decreased, the power of the test
a) will increase.
b) will decrease.
c) will remain the same.
d) cannot be determined.

ANSWER:
b
KEYWORDS: level of significance, power, sample size

19. For a given level of significance ( o), if the sample size n is increased, the probability of a Type II error ( | )
a) will decrease.
b) will increase.
c) will remain the same.
d) cannot be determined.

ANSWER:
a
KEYWORDS: level of significance, beta risk, sample size

20. If a researcher rejects a true null hypothesis, she has made a _______error.

ANSWER:
Type I
KEYWORDS: type I error

21. If a researcher accepts a true null hypothesis, she has made a _______decision.

ANSWER:
correct
KEYWORDS: decision

22. If a researcher rejects a false null hypothesis, she has made a _______decision.

ANSWER:
correct
KEYWORDS: decision

23. If a researcher accepts a false null hypothesis, she has made a _______error.

ANSWER:
Type II

24. It is possible to directly compare the results of a confidence interval estimate to the results obtained by testing a
null hypothesis if
a) a two-tailed test for is used.
b) a one-tailed test for is used.
c) Both of the previous statements are true.

d) None of the previous statements is true.

ANSWER:
a
KEYWORDS: confidence interval, two-tailed test

25. The power of a statistical test is
a) the probability of not rejecting H
0
when it is false.
b) the probability of rejecting H
0
when it is true.
c) the probability of not rejecting H
0
when it is true.
d) the probability of rejecting H
0
when it is false.

ANSWER:
d
KEYWORDS: power

26. The symbol for the power of a statistical test is
a) o.
b) 1 o.
c) | .
d) 1 | .

ANSWER:
d
KEYWORDS: power

27. Suppose we wish to test H
0
: s 47 versus H
1
: > 47. What will result if we conclude that the mean is greater
than 47 when its true value is really 52?
a) We have made a Type I error.
b) We have made a Type II error.
c) We have made a correct decision.
d) None of the above are correct.

ANSWER:
c
KEYWORDS: one-tailed test, conclusion

28. How many Kleenex should the Kimberly Clark Corporation package of tissues contain? Researchers determined
that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of 100 Kleenex
users yielded the following data on the number of tissues used during a cold: X = 52, s = 22. Give the null and
alternative hypotheses to determine if the number of tissues used during a cold is less than 60.
a) H
0
: s 60 and H
1
: > 60.
b) H
0
: > 60 and H
1
: < 60.
c) H
0
: X >60 and H
1
: X <60.
d) H
0
: X = 52 and H
1
: X = 52.

ANSWER:
b
KEYWORDS: one-tailed test, form of hypothesis, mean, t test

users yielded the following data on the number of tissues used during a cold: X = 52, s = 22. Using the sample
information provided, calculate the value of the test statistic.
a)
( ) 52 60 / 22 t =

b)
( ) ( ) 52 60 / 22/100 t =

c)
( ) ( )
2
52 60 / 22/100 t =

d)
( ) ( ) 52 60 / 22/10 t =

ANSWER:
d
KEYWORDS: one-tailed test, mean, t test

users yielded the following data on the number of tissues used during a cold: X = 52, s = 22. Suppose the
alternative we wanted to test was H
1
: < 60. State the correct rejection region for o = 0.05.
a) Reject H
0
if t > 1.6604.
b) Reject H
0
if t < 1.6604.
c) Reject H
0
if t > 1.9842 or Z < 1.9842.
d) Reject H
0
if t < 1.9842.

ANSWER:
b
KEYWORDS: one-tailed test, mean, t test, rejection region


users yielded the following data on the number of tissues used during a cold: X = 52, s = 22. Suppose the test
statistic does fall in the rejection region at o = 0.05. Which of the following decisions is correct?
a) At o = 0.05, we do not reject H
0
.
b) At o = 0.05, we reject H
0
.
c) At o = 0.05, we accept H
0
.
d) At o = 0.10, we do not reject H
0
.

ANSWER:
b
KEYWORDS: one-tailed test, mean, t test, decision

users yielded the following data on the number of tissues used during a cold: X = 52, s = 22. Suppose the test
statistic does fall in the rejection region at o = 0.05. Which of the following conclusions is correct?
a) At o = 0.05, there is not sufficient evidence to conclude that the average number of tissues used during
a cold is 60 tissues.
b) At o = 0.05, there is sufficient evidence to conclude that the average number of tissues used during a
cold is 60 tissues.
c) At o = 0.05, there is not sufficient evidence to conclude that the average number of tissues used during
a cold is not 60 tissues.
d) At o = 0.10, there is sufficient evidence to conclude that the average number of tissues used during a
cold is not 60 tissues.

ANSWER:
d
KEYWORDS: one-tailed test, mean, t test, conclusion

33. We have created a 95% confidence interval for with the result (10, 15). What decision will we make if we
test H
0
: =16 versus H
1
: = 16 at o = 0.05?
a) Reject H
0
in favor of H
1
.
b) Accept H
0
in favor of H
1
.
c) Fail to reject H
0
in favor of H
1
.
d) We cannot tell what our decision will be from the information given.

ANSWER:
a
KEYWORDS: two-tailed test, confidence interval, mean, t test, decision


test H
0
: =16 versus H
1
: = 16 at o = 0.10?
a) Reject H
0
in favor of H
1
.
b) Accept H
0
in favor of H
1
.
c) Fail to reject H
0
in favor of H
1
.

ANSWER:
a
EXPLANATION: The 90% confidence interval is narrower than (10, 15), which still does not contain 16.

test H
0
: =16 versus H
1
: = 16 at o = 0.025?
a) Reject H
0
in favor of H
1
.
b) Accept H
0
in favor of H
1
.
c) Fail to reject H
0
in favor of H
1
.

ANSWER:
d
EXPLANATION: The 97.5% confidence interval is wider than (10, 15), which could have contained 16 or not have
contained 16.

36. Suppose we want to test H
0
: > 30 versus H
1
: < 30. Which of the following possible sample results
based on a sample of size 36 gives the strongest evidence to reject H
0
in favor of H
1
?
a) X = 28, s = 6
b) X = 27, s = 4
c) X = 32, s = 2
d) X = 26, s = 9

ANSWER:
b
KEYWORDS: one-tailed test, rejection region

37. Which of the following statements is NOT true about the level of significance in a hypothesis test?
a) The larger the level of significance, the more likely you are to reject the null hypothesis.
b) The level of significance is the maximum risk we are willing to accept in making a Type I error.
c) The significance level is also called the o level.
d) The significance level is another name for Type II error.

ANSWER:
d
KEYWORDS: level of significance

38. If, as a result of a hypothesis test, we reject the null hypothesis when it is false, then we have committed
a) a Type II error.
b) a Type I error.
c) no error.
d) an acceptance error.

ANSWER:
c
KEYWORDS: decision, type I error, type II error

39. The value that separates a rejection region from a non-rejection region is called the _______.

ANSWER:
critical value
KEYWORDS: critical value, rejection region

40. A is a numerical quantity computed from the data of a sample and is used to reach a
decision on whether or not to reject the null hypothesis.
a) significance level
b) critical value
c) test statistic
d) parameter

ANSWER:
c
KEYWORDS: test statistic

41. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club. She
would now like to determine whether or not the mean age of her customers is over 30. If so, she plans to alter
the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. The appropriate
hypotheses to test are:
a) H
0
: > 30 versus H
1
: < 30.
b) H
0
: s 30 versus H
1
: > 30.
c) H
0
: X >30 versus H
1
: X <30.
d) H
0
: X s30 versus H
1
: X >30.

ANSWER:
b
KEYWORDS: one-tailed test, form of hypothesis, form of hypothesis, mean

the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. If she wants to be
99% confident in her decision, what rejection region should she use?
a) Reject H
0
if t < 2.34.
b) Reject H
0
if t < 2.55.
c) Reject H
0
if t > 2.34.
d) Reject H
0
if t > 2.58.

ANSWER:
c
KEYWORDS: one-tailed test, mean, Z test, t test, rejection region

the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. Suppose she found
that the sample mean was 30.45 years and the sample standard deviation was 5 years. If she wants to be 99%
confident in her decision, what decision should she make?
a) Reject H
0
.
b) Accept H
0
.
c) Fail to reject H
0
.
d) We cannot tell what her decision should be from the information given.

ANSWER:
c


that the sample mean was 30.45 years and the sample standard deviation was 5 years. If she wants to be 99%
confident in her decision, what conclusion can she make?
a) There is not sufficient evidence that the mean age of her customers is over 30.
b) There is sufficient evidence that the mean age of her customers is over 30.
c) There is not sufficient evidence that the mean age of her customers is not over 30.
d) There is sufficient evidence that the mean age of her customers is not over 30.

ANSWER:
a

that the sample mean was 30.45 years and the sample standard deviation was 5 years. What is the p-value
associated with the test statistic?
a) 0.3577
b) 0.1423
c) 0.0780
d) 0.02

ANSWER:
c
KEYWORDS: one-tailed test, mean, t test, p-value

46. A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this claim
against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a random
sample of 100 doctors results in 83 who indicate that they recommend aspirin. The value of the test statistic in
this problem is approximately equal to:
a) 4.12.
b) 2.33.
c) 1.86.
d) 0.07.

ANSWER:
b
KEYWORDS: one-tailed test, proportion, test statistic


sample of 100 doctors was selected. Suppose that the test statistic is 2.20. Can we conclude that H
0
should be
rejected at the (a) o = 0.10, (b) o = 0.05, and (c) o = 0.01 level of Type I error?
a) (a) yes; (b) yes; (c) yes
b) (a) no; (b) no; (c) no
c) (a) no; (b) no; (c) yes
d) (a) yes; (b) yes; (c) no

ANSWER:
d
KEYWORDS: one-tailed test, proportion, decision

sample of 100 doctors was selected. Suppose you reject the null hypothesis. What conclusion can you draw?
a) There is not sufficient evidence that the proportion of doctors who recommend aspirin is not less than
0.90.
b) There is sufficient evidence that the proportion of doctors who recommend aspirin is not less than 0.90.
c) There is not sufficient evidence that the proportion of doctors who recommend aspirin is less than 0.90.
d) There is sufficient evidence that the proportion of doctors who recommend aspirin is less than 0.90.

ANSWER:
d
KEYWORDS: one-tailed test, proportion, conclusion

49. A major videocassette rental chain is considering opening a new store in an area that currently does not have
any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the
area are equipped with videocassette recorders (VCRs). It conducts a telephone poll of 300 randomly selected
households in the area and finds that 96 have VCRs. State the test of interest to the rental chain.
a) H
0
: p s 0.32 versus H
1
: p > 0.32
b) H
0
: ps 0.25 versus H
1
: p > 0.25
c) H
0
: p s 5,000 versus H
1
: p> 5,000
d) H
0
: s 5,000 versus H
1
: > 5,000

ANSWER:
b
KEYWORDS: one-tailed test, proportion, form of hypothesis, form of hypothesis


households in the area and finds that 96 have VCRs. The value of the test statistic in this problem is
approximately equal to:
a) 2.80.
b) 2.60.
c) 1.94.
d) 1.30.

ANSWER:
a
KEYWORDS: one-tailed test, proportion, Z test, test statistic

households in the area and finds that 96 have VCRs. The p-value associated with the test statistic in this
problem is approximately equal to:
a) 0.0100.
b) 0.0051.
c) 0.0026.
d) 0.0013.
ANSWER:
c
KEYWORDS: one-tailed test, proportion, Z test, p-value

households in the area and finds that 96 have VCRs. The decision on the hypothesis test using a 3% level of
significance is:
a) to reject H
0
in favor of H
1
.
b) to accept H
0
in favor of H
1
.
c) to fail to reject H
0
in favor of H
1
.
d) We cannot tell what the decision should be from the information given.

ANSWER:
a
KEYWORDS: one-tailed test, proportion, Z test, decision


households in the area and finds that 96 have VCRs. The rental chain's conclusion from the hypothesis test
using a 3% level of significance is:
a) to open a new store.
b) not to open a new store.
c) to delay opening a new store until additional evidence is collected.
d) We cannot tell what the decision should be from the information given.

ANSWER:
a
KEYWORDS: one-tailed test, proportion, Z test, conclusion

54. An entrepreneur is considering the purchase of a coin-operated laundry. The present owner claims that over the
past 5 years, the average daily revenue was $675 with a standard deviation of $75. A sample of 30 days reveals
a daily average revenue of $625. If you were to test the null hypothesis that the daily average revenue was $675,
which test would you use?
a) Z-test of a population mean
b) Z-test of a population proportion
c) t test of a population mean
d)
2
_ -test of population variance

ANSWER:
a
KEYWORDS: two-tailed test, mean, Z test

55. An entrepreneur is considering the purchase of a coin-operated laundry. The present owner claims that over the
past 5 years, the average daily revenue was $675 with a standard deviation of $75. A sample of 30 days reveals
a daily average revenue of $625. If you were to test the null hypothesis that the daily average revenue was $675
and decide not to reject the null hypothesis, what can you conclude?
a) There is not enough evidence to conclude that the daily average revenue was $675.
b) There is not enough evidence to conclude that the daily average revenue was not $675.
c) There is enough evidence to conclude that the daily average revenue was $675.
d) There is enough evidence to conclude that the daily average revenue was not $675.

ANSWER:
b
KEYWORDS: two-tailed test, mean, Z test, conclusion


56. A manager of the credit department for an oil company would like to determine whether the average monthly
balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that
the average owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test whether the
auditor should conclude that there is evidence that the average balance is different from $75, which test would
you use?
c) t test of population mean
d) _
2
-test of population variance

ANSWER:
c
KEYWORDS: two-tailed test, mean, t test

57. A manager of the credit department for an oil company would like to determine whether the average monthly
balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that
the average owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test whether the
average balance is different from $75 and decided to reject the null hypothesis, what conclusion could you
draw?
a) There is not evidence that the average balance is $75.
b) There is not evidence that the average balance is not $75.
c) There is evidence that the average balance is $75.
d) There is evidence that the average balance is not $75.

ANSWER:
d
KEYWORDS: two-tailed test, mean, t test, conclusion

58. The marketing manager for an automobile manufacturer is interested in determining the proportion of new
compact car owners who would have purchased a passenger-side inflatable air bag if it had been available for an
additional cost of $300. The manager believes from previous information that the proportion is 0.30. Suppose
that a survey of 200 new compact car owners is selected and 79 indicate that they would have purchased the
inflatable air bag. If you were to conduct a test to determine whether there is evidence that the proportion is
different from 0.30, which test would you use?
c) t test of population mean
d) _
2
-test of population variance

ANSWER:
b
KEYWORDS: two-tailed test, proportion


59. The marketing manager for an automobile manufacturer is interested in determining the proportion of new
compact car owners who would have purchased a passenger-side inflatable air bag if it had been available for an
additional cost of $300. The manager believes from previous information that the proportion is 0.30. Suppose
that a survey of 200 new compact car owners is selected and 79 indicate that they would have purchased the
inflatable air bag. If you were to conduct a test to determine whether there is evidence that the proportion is
different from 0.30 and decided not to reject the null hypothesis, what conclusion could you draw?
a) There is sufficient evidence that the proportion is 0.30.
b) There is not sufficient evidence that the proportion is 0.30.
c) There is sufficient evidence that the proportion is 0.30.
d) There is not sufficient evidence that the proportion is not 0.30.

ANSWER:
d
KEYWORDS: two-tailed test, proportion, conclusion

TABLE 9-1

Microsoft Excel was used on a set of data involving the number of parasites found on 46 Monarch butterflies
captured in Pismo Beach State Park. A biologist wants to know if the mean number of parasites per butterfly is over
20. She will make her decision using a test with a level of 0.10. The following information was extracted from the
Microsoft Excel output for the sample of 46 Monarch butterflies:
n = 46; Arithmetic Mean = 28.00; Standard Deviation = 25.92; Standard Error = 3.82;
Null Hypothesis: H
0
: s 20.000; o = 0.10; df = 45; T Test Statistic = 2.09;
One-Tailed Test Upper Critical Value = 1.3006; p-value = 0.021; Decision = Reject.

60. Referring to Table 9-1, the parameter the biologist is interested in is:
a) the mean number of butterflies in Pismo Beach State Park.
b) the mean number of parasites on these 46 butterflies.
c) the mean number of parasites on Monarch butterflies in Pismo Beach State Park.
d) the proportion of butterflies with parasites.

ANSWER:
c
KEYWORDS: mean, t test, parameter

61. Referring to Table 9-1, state the alternative hypothesis for this study.

ANSWER:
000 . 20 :
1
> H
KEYWORDS: one-tailed test, mean, t test, form of hypothesis


62. Referring to Table 9-1, what critical value should the biologist use to determine the rejection region?
a) 1.6794
b) 1.3006
c) 1.3002
d) 1.28

ANSWER:
b
KEYWORDS: one-tailed test, mean, t test, critical value

63. True or False: Referring to Table 9-1, the null hypothesis would be rejected.

ANSWER:
True

64. True or False: Referring to Table 9-1, the null hypothesis would be rejected if a 4% probability of committing a
Type I error is allowed.

ANSWER:
True

65. True or False: Referring to Table 9-1, the null hypothesis would be rejected if a 1% probability of committing a
Type I error is allowed.

ANSWER:
False

66. Referring to Table 9-1, the lowest probability at which the null hypothesis can be rejected is ______.

ANSWER:
0.021

67. True or False: Referring to Table 9-1, this result proves beyond a doubt that the mean number of parasites on
butterflies in Pismo Beach State Park is over 20.

ANSWER:
False

68. True of False: Referring to Table 9-1, the biologist can conclude that there is sufficient evidence to show that
the average number of parasites per butterfly is over 20 using a level of significance of 0.10.

ANSWER:
True


69. True or False: Referring to Table 9-1, the same decision would have been reached if the biologist had selected a
level of significance of 0.05.

ANSWER:
True

70. True or False: Referring to Table 9-1, the same decision would have been reached if the biologist had selected a

ANSWER:
False

71. True or False: Referring to Table 9-1, the value of | is 0.90.

ANSWER:
False
KEYWORDS: one-tailed test, mean, t test, beta risk

72. True or False: Referring to Table 9-1, if these data were used to perform a two-tailed test, the p-value would be
0.042.

ANSWER:
True

73. True or False: Suppose, in testing a hypothesis about a proportion, the p-value is computed to be 0.043. The null
hypothesis should be rejected if the chosen level of significance is 0.05.

ANSWER:
True
KEYWORDS: mean, t test, p-value, level of significance, decision


74. True or False: Suppose, in testing a hypothesis about a proportion, the p-value is computed to be 0.034. The null
hypothesis should be rejected if the chosen level of significance is 0.01.

ANSWER:
False
KEYWORDS: p-value, level of significance, decision

75. True or False: Suppose, in testing a hypothesis about a proportion, the Z test statistic is computed to be 2.04.
The null hypothesis should be rejected if the chosen level of significance is 0.01 and a two-tailed test is used.

ANSWER:
False
KEYWORDS: proportion, Z test, test statistic, critical value, decision

76. True or False: In testing a hypothesis, statements for the null and alternative hypotheses, as well as the selection
of the level of significance, should precede the collection and examination of the data.

ANSWER:
True
KEYWORDS: ethical issues

77. True or False: The test statistic measures how close the computed sample statistic has come to the hypothesized
population parameter.

ANSWER:
True
KEYWORDS: test statistic

78. True or False: The statement of the null hypothesis always contains an equality.

ANSWER:
True
KEYWORDS: form of null hypothesis

79. True or False: The larger the p-value, the more likely one is to reject the null hypothesis.

ANSWER:
False
KEYWORDS: p-value


80. True or False: The smaller the p-value, the stronger the evidence against the null hypothesis.

ANSWER:
True
KEYWORDS: p-value

81. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 20, versus the alternative hypothesis that the mean of the population differs
from 20, the null hypothesis could be rejected at a level of significance of 0.05.

ANSWER:
True
KEYWORDS: confidence interval, two-tailed test, decision


ANSWER:
False


ANSWER:
True



ANSWER:
False
EXPLANATION: We are not sure if 20 will be in the wider confidence interval.

from 20, the null hypothesis could be accepted at a level of significance of 0.02.

ANSWER:
False
EXPLANATION: We are not sure if 20 will be in the wider confidence interval.

TABLE 9-2

A student claims that he can correctly identify whether a person is a business major or an agriculture major by the
way the person dresses. Suppose in actuality that he can correctly identify a business major 87% of the time, while
13% of the time, he mistakenly identifies an agriculture major as a business major. Presented with one person and
asked to identify the major of this person (who is either a business or agriculture major), he considers this to be a
hypothesis test with the null hypothesis being that the person is a business major, and the alternative being that the
person is an agriculture major.

86. Referring to Table 9-2, what would be a Type I error?
a) Saying that the person is a business major when, in fact, the person is a business major.
b) Saying that the person is a business major when, in fact, the person is an agriculture major.
c) Saying that the person is an agriculture major when, in fact, the person is a business major.
d) Saying that the person is an agriculture major when, in fact, the person is an agriculture major.

ANSWER:
c
KEYWORDS: form of hypothesis, form of hypothesis


87. Referring to Table 9-2, what would be a Type II error?
a) Saying that the person is a business major when, in fact, the person is a business major.
b) Saying that the person is a business major when, in fact, the person is an agriculture major.
c) Saying that the person is an agriculture major when, in fact, the person is a business major.
d) Saying that the person is an agriculture major when, in fact, the person is an agriculture major.

ANSWER:
b

88. Referring to Table 9-2, what is the actual level of significance of the test?
a) 0.13
b) 0.16
c) 0.84
d) 0.87

ANSWER:
a

89. Referring to Table 9-2, what is the actual confidence coefficient?
a) 0.13
b) 0.16
c) 0.84
d) 0.87

ANSWER:
d
KEYWORDS: confidence coefficient

90. Referring to Table 9-2, what is the value of o?
a) 0.13
b) 0.16
c) 0.84
d) 0.87

ANSWER:
a


91. Referring to Table 9-2, what is the value of | ?
a) 0.13
b) 0.16
c) 0.84
d) 0.87

ANSWER:
b
KEYWORDS: beta risk

92. Referring to Table 9-2, what is the power of the test?
a) 0.13
b) 0.16
c) 0.84
d) 0.87

ANSWER:
c
KEYWORDS: power

TABLE 9-3

An appliance manufacturer claims to have developed a compact microwave oven that consumes an average of no
more than 250 W. From previous studies, it is believed that power consumption for microwave ovens is normally
distributed with a standard deviation of 15 W. A consumer group has decided to try to discover if the claim appears
true. They take a sample of 20 microwave ovens and find that they consume an average of 257.3 W.

93. Referring to Table 9-3, the population of interest is
a) the power consumption in the 20 microwave ovens.
b) the power consumption in all such microwave ovens.
c) the mean power consumption in the 20 microwave ovens.
d) the mean power consumption in all such microwave ovens.

ANSWER:
b
KEYWORDS: one-tailed test, mean, Z test


94. Referring to Table 9-3, the parameter of interest is
a) the mean power consumption of the 20 microwave ovens.
b) the mean power consumption of all such microwave ovens.
c) 250.
d) 257.3.

ANSWER:
b
KEYWORDS: one-tailed test, mean, Z test, parameter

95. Referring to Table 9-3, the appropriate hypotheses to determine if the manufacturer's claim appears reasonable
are:
a) 250 : versus 250 :
1 0
= = H H
b) 250 : versus 250 :
1 0
< > H H
c) 250 : versus 250 :
1 0
> s H H
d) 3 . 257 : versus 3 . 257 :
1 0
< > H H

ANSWER:
c
KEYWORDS: one-tailed test, mean, Z test, form of hypothesis

96. Referring to Table 9-3, for a test with a level of significance of 0.05, the critical value would be ________.

ANSWER:
Z = 1.645
KEYWORDS: one-tailed test, mean, Z test, critical value

97. Referring to Table 9.3, the value of the test statistic is ________.

ANSWER:
2.18
KEYWORDS: one-tailed test, mean, Z test, test statistic

98. Referring to Table 9-3, the p-value of the test is ________.

ANSWER:
0.0148
KEYWORDS: one-tailed test, mean, Z test, p-value


99. True or False: Referring to Table 9-3, for this test to be valid, it is necessary that the power consumption for
microwave ovens has a normal distribution.

ANSWER:
True
KEYWORDS: one-tailed test, mean, Z test, assumptions

100. True or False: Referring to Table 9-3, the null hypothesis will be rejected at a 5% level of significance.

ANSWER:
True
KEYWORDS: one-tailed test, mean, Z test, decision

101. True or False: Referring to Table 9-3, the null hypothesis will be rejected at a 1% level of significance.

ANSWER:
False

102. True or False: Referring to Table 9-3, the consumer group can conclude that there is enough evidence to
prove that the manufacturers claim is not true when allowing for a 5% probability of committing a Type I error.

ANSWER:
False
KEYWORDS: one-tailed test, mean, Z test, conclusion


TABLE 9-4

A drug company is considering marketing a new local anesthetic. The effective time of the anesthetic the drug
company is currently producing has a normal distribution with an average of 7.4 minutes with a standard deviation
of 1.2 minutes. The chemistry of the new anesthetic is such that the effective time should be normal with the same
standard deviation, but the mean effective time may be lower. If it is lower, the drug company will market the new
anesthetic; otherwise, they will continue to produce the older one. A hypothesis test will be done to help make the
decision.

103. Referring to Table 9-4, the appropriate hypotheses are:
a) 4 . 7 : versus 4 . 7 :
1 0
= = H H
b) 4 . 7 : versus 4 . 7 :
1 0
> s H H
c) 4 . 7 : versus 4 . 7 :
1 0
< > H H
d) 4 . 7 : versus 4 . 7 :
1 0
s > H H

ANSWER:
c
KEYWORDS: one-tailed test, mean, Z test, form of hypothesis

104. Referring to Table 9-4, for a test with a level of significance of 0.10, the critical value would be ________.

ANSWER:
-1.28
KEYWORDS: one-tailed test, mean, Z test, critical value

105. Referring to Table 9-4, a sample of size 36 results in a sample mean of 7.1. The value of the test statistic is
________.

ANSWER:
-1.50
KEYWORDS: one-tailed test, mean, Z test, test statistic

106. Referring to Table 9-4, a sample of size 36 results in a sample mean of 7.1. The p-value of the test is
________.

ANSWER:
0.0668
KEYWORDS: one-tailed test, mean, Z test, p-value


107. True or False: Referring to Table 9-4, a sample of size 36 results in a sample mean of 7.1. The null
hypothesis will be rejected with a level of significance of 0.10.

ANSWER:
True

108. True or False: Referring to Table 9-4, a sample of size 36 results in a sample mean of 7.1. If the level of
significance had been chosen as 0.05, the null hypothesis would be rejected.

ANSWER:
False

109. True or False: Referring to Table 9-4, a sample of size 36 results in a sample mean of 7.1. If the level of
significance had been chosen as 0.05, the company would market the new anesthetic.

ANSWER:
False
KEYWORDS: one-tailed test, mean, Z test, conclusion

TABLE 9-5

A bank tests the null hypothesis that the mean age of the bank's mortgage holders is less than or equal to 45, versus
an alternative that the mean age is greater than 45. They take a sample and calculate a p-value of 0.0202.

110. True or False: Referring to Table 9-5, the null hypothesis would be rejected at a significance level of o =
0.05.

ANSWER:
True
KEYWORDS: one-tailed test, mean, decision

111. True or False: Referring to Table 9-5, the null hypothesis would be rejected at a significance level of o =
0.01.

ANSWER:
False


112. True or False: Referring to Table 9-5, the bank can conclude that the average age is greater than 45 at a
significance level of o = 0.01.

ANSWER:
False
KEYWORDS: one-tailed test, mean, conclude

113. Referring to Table 9-5, if the same sample was used to test the opposite one-tailed test, what would be this
test's p-value?
a) 0.0202
b) 0.0404
c) 0.9596
d) 0.9798

ANSWER:
d
KEYWORDS: one-tailed test, mean, p-value

TABLE 9-6

The quality control engineer for a furniture manufacturer is interested in the mean amount of force necessary to
produce cracks in stressed oak furniture. She performs a two-tailed test of the null hypothesis that the mean for the
stressed oak furniture is 650. The calculated value of the Z test statistic is a positive number that leads to a p-value
of 0.080 for the test.

114. True or False: Referring to Table 9-6, if the test is performed with a level of significance of 0.10, the null
hypothesis would be rejected.

ANSWER:
True

115. True or False: Referring to Table 9-6, if the test is performed with a level of significance of 0.10, the engineer
can conclude that the mean amount of force necessary to produce cracks in stressed oak furniture is 650.

ANSWER:
False
KEYWORDS: one-tailed test, mean, conclusion


116. True or False: Referring to Table 9-6, if the test is performed with a level of significance of 0.05, the null

ANSWER:
False

117. True or False: Referring to Table 9-6, if the test is performed with a level of significance of 0.05, the engineer
can conclude that the mean amount of force necessary to produce cracks in stressed oak furniture is 650.

ANSWER:
False
EXPLANATION: The engineer can conclude that there is insufficient evidence to show that the mean amount of
force needed is not 650, but cannot conclude that there is evidence to show that the force needed is 650.
KEYWORDS: one-tailed test, mean, conclusion

118. True or False: Referring to Table 9-6, suppose the engineer had decided that the alternative hypothesis to test
was that the mean was greater than 650. Then, if the test is performed with a level of significance of 0.10, the
null hypothesis would be rejected.

ANSWER:
True

119. Referring to Table 9-6, suppose the engineer had decided that the alternative hypothesis to test was that the
mean was greater than 650. What would be the p-value of this one-tailed test?
a) 0.040
b) 0.160
c) 0.840
d) 0.960

ANSWER:
a


120. Referring to Table 9-6, suppose the engineer had decided that the alternative hypothesis to test was that the
mean was less than 650. What would be the p-value of this one-tailed test?
a) 0.040
b) 0.160
c) 0.840
d) 0.960

ANSWER:
d

121. True or False: Referring to Table 9-6, suppose the engineer had decided that the alternative hypothesis to test
was that the mean was less than 650. Then, if the test is performed with a level of significance of 0.10, the null

ANSWER:
False

TABLE 9-7

A filling machine at a local soft drinks company is calibrated to fill the cans at an average amount of 12 fluid ounces
and a standard deviation of 0.5 ounces. The company wants to test whether the standard deviation of the amount
filled by the machine is indeed 0.5 ounces. A random sample of 15 cans filled by the machine reveals a standard
deviation of 0.67 ounces.

122. Referring to Table 9-7, the parameter of interest in the test is ________.

ANSWER:
Population standard deviation or population variance
KEYWORDS: two-tailed test, variance, parameter

123. Referring to Table 9-7, which is the appropriate test to use?
c) t test of a population mean
d)
2
_ -test of population variance

ANSWER:
d
KEYWORDS: two-tailed test, variance


124. True or False: Referring to Table 9-7, in order to perform the test, we need to assume that the amount filled by
the machine has a normal distribution.

ANSWER:
True
KEYWORDS: two-tailed test, variance, assumption

125. Referring to Table 9-7, what type of test should be performed?
a) lower-tailed test
b) upper-tailed test
c) two-tailed test

ANSWER:
c
KEYWORDS: two-tailed test, variance, form of hypothesis

126. Referring to Table 9-7, what are the lower and upper critical values of the test when allowing for 5%
probability of committing a Type I error?

ANSWER:
5.6287 and 26.1189
KEYWORDS: two-tailed test, variance, critical value

127. Referring to Table 9-7, what is the value of the test statistic?

ANSWER:
25.1384
KEYWORDS: two-tailed test, variance, test statistic

128. True or False: Referring to Table 9-7, the decision is to reject the null hypothesis when using a 5% level of
significance.

ANSWER:
False
KEYWORDS: two-tailed test, variance, decision

129. True or False: Referring to Table 9-7, there is sufficient evidence to conclude that the standard deviation of
the amount filled by the machine is not exactly 0.5 ounces when using a 5% level of significance.

ANSWER:
False
KEYWORDS: two-tailed test, variance, conclusion

130. True or False: Referring to Table 9-7, the decision is to reject the null hypothesis when using a 10% level of
significance.

ANSWER:
True

KEYWORDS: two-tailed test, variance, decision

131. True or False: Referring to Table 9-7, there is sufficient evidence to conclude that the standard deviation of
the amount filled by the machine is not exactly 0.5 ounces when using a 10% level of significance.

ANSWER:
True
KEYWORDS: two-tailed test, variance, conclusion

132. True or False: Referring to Table 9-7, the p-value of the test is somewhere between 5% and 10%.

ANSWER:
True
KEYWORDS: two-tailed test, variance, p-value

CHAPTER 10: TWO-SAMPLE TESTS
WITH NUMERICAL DATA

1. The t test for the difference between the means of 2 independent populations assumes that the respective
a) sample sizes are equal.
b) sample variances are equal.
c) populations are approximately normal.
d) all of the above

ANSWER:
c
KEYWORDS: pooled-variance t test, assumption

2. The t test for the mean difference between 2 related populations assumes that the respective
a) population sizes are equal.
b) sample variances are equal.
c) populations are approximately normal or sample sizes are large enough.
d) all of the above

ANSWER:
c
KEYWORDS: t test for mean difference, assumption

3. If we are testing for the difference between the means of 2 related populations with samples of n
1
= 20 and n
2
=
20, the number of degrees of freedom is equal to
a) 39.
b) 38.
c) 19.
d) 18.

ANSWER:
c
KEYWORDS: t test for mean difference, degrees of freedom


4. If we are testing for the difference between the means of 2 independent populations with samples of n
1
= 20 and
n
2
= 20, the number of degrees of freedom is equal to
a) 39.
b) 38.
c) 19.
d) 18.

ANSWER:
b
KEYWORDS: pooled-variance t test, degrees of freedom

5. In what type of test is the variable of interest the difference between the values of the observations rather than
the observations themselves?
a) a test for the equality of variances from 2 independent populations
b) a test for the difference between the means of 2 related populations
c) a test for the difference between the means of 2 independent populations
d) all of the above

ANSWER:
b
KEYWORDS: t test for mean difference

6. In testing for the differences between the means of 2 independent populations, where the variances in each
population are unknown but assumed equal, the degrees of freedom are
a) n 1.
b) n
1
+ n
2
1.
c) n
1
+ n
2
2.
d) n 2.

ANSWER:
c

7. In testing for differences between the means of 2 related populations, where the variance of the differences is
unknown, the degrees of freedom are
a) n 1.
b) n
1
+ n
2
1.
c) n
1
+ n
2
2.
d) n 2.

ANSWER:
a


8. In testing for differences between the means of two related populations, the null hypothesis is
a)
0
: 2
D
H = .
b)
0
: 0
D
H = .
c)
0
: 0
D
H < .
d)
0
: 0
D
H > .

ANSWER:
b
KEYWORDS: t test for mean difference, form of hypothesis

9. In testing for differences between the means of two independent populations, the null hypothesis is:
a)
0 1 2
: H = 2.
b) H
0
:
1

2
= 0.
c) H
0
:
1

2
> 0.
d) H
0
:
1

2
< 2.

ANSWER:
b
KEYWORDS: pooled-variance t test, form of hypothesis

10. In testing for differences between the median of two independent populations, the null hypothesis is
a)
0
: 0
D
H M = .
b)
0
: 0
D
H M = .
c)
0 1 2
: 0 H M M = .
d)
0 1 2
: 0 H M M = .

ANSWER:
c
KEYWORDS: Wilcoxon rank sum test, form of hypothesis


11. In testing for whether the median difference of two related populations is zero, the null hypothesis is
a)
0
: 0
D
H M = .
b)
0
: 0
D
H M = .
c)
0 1 2
: 0 H M M = .
d)
0 1 2
: 0 H M M = .

ANSWER:
a

12. When testing for the difference between 2 population variances with sample sizes of n
1
= 8 and n
2
= 10, the
number of degrees of freedom are
a) 8 and 10.
b) 7 and 9.
c) 18.
d) 16.

ANSWER:
b
KEYWORDS: F test for equality of variances, degrees of freedom

13. The statistical distribution used for testing the difference between two population variances is the ___
distribution.
a) t
b) standardized normal
c) binomial
d) F

ANSWER:
d
KEYWORDS: F test for equality of variances, degrees of freedom

14. The test for the equality of two population variances is based on
a) the difference between the 2 sample variances.
b) the ratio of the 2 sample variances.
c) the difference between the 2 population variances.
d) the difference between the sample variances divided by the difference between the sample means.

ANSWER:
b
KEYWORDS: F test for equality of variances

15. To use the Wilcoxon rank sum test as a test for location, we must assume that
a) the obtained data are either ranks or numerical measurements both within and between the 2 samples.
b) both samples are randomly and independently drawn from their respective populations.
c) both underlying populations from which the samples were drawn are equivalent in shape and
dispersion.
d) all of the above

ANSWER:
d
KEYWORDS: Wilcoxon rank sum test, assumption

16. True or False: The F test used for testing the difference in two population variances is always a one-tailed test.

ANSWER:
False
KEYWORDS: F test for equality of variances, rejection region

17. In testing for the differences between the means of two related populations, the _______ hypothesis is the
hypothesis of "no differences."

ANSWER:
null

18. In testing for the differences between the means of two related populations, we assume that the differences
follow a _______ distribution.

ANSWER:
normal
KEYWORDS: t test for mean difference, assumption

19. In testing for the differences between the means of two independent populations, we assume that the 2
populations each follow a _______ distribution.

ANSWER:
normal


20. A "robust" test procedure is one which
a) requires a sophisticated level of measurement.
b) requires a semi-circular shaped population.
c) is sensitive to slight violations in its assumptions.
d) is insensitive to slight violations in its assumptions.

ANSWER:
d
KEYWORDS: robust test

21. Which of the following is NOT a robust test procedure against the violation of distribution assumptions?
a) pooled-variance t test for difference in means
b) separate variance t test for difference in means
c) F test for difference in variances
d) Wilcoxon rank sum test for difference in medians

ANSWER:
c
KEYWORDS: robust test

22. Given the following information, calculate the degrees of freedom that should be used in the pooled-variance t
test.
s
1
2
= 4 s
2
2
= 6
n
1
= 16 n
2
= 25
a) df = 41
b) df = 39
c) df = 16
d) df = 25

ANSWER:
b

23. Given the following information, calculate s
p
2
, the pooled sample variance that should be used in the pooled-
variance t test.
s
1
2
= 4 s
2
2
= 6
n
1
= 16 n
2
= 25
a) s
p
2
= 6
b) s
p
2
= 5
c) s
p
2
= 5.23
d) s
p
2
= 4

ANSWER:
c
KEYWORDS: pooled-variance t test

TABLE 10-1


Are Japanese managers more motivated than American managers? A randomly selected group of each were
administered the Sarnoff Survey of Attitudes Toward Life (SSATL), which measures motivation for upward
mobility. The SSATL scores are summarized below.

American Japanese
Sample Size 211 100
Mean SSATL Score 65.75 79.83
Population Std. Dev. 11.07 6.41

24. Referring to Table 10-1, judging from the way the data were collected, which test would likely be most
appropriate to employ?
a) related samples t test for mean difference
b) pooled-variance t test for the difference in means
c) independent samples Z test for the difference in means
d) related samples Z test for mean difference

ANSWER:
c
KEYWORDS: Z test for difference in means

25. Referring to Table 10-1, give the null and alternative hypotheses to determine if the average SSATL score of
Japanese managers differs from the average SSATL score of American managers.
a) H
0
:
A

J
> 0 versus H
1
:
A

J
< 0
b) H
0
:
A

J
s 0 versus H
1
:
A
J
> 0
c) H
0
:
A

J
= 0 versus H
1
:
A

J
= 0
d) H
0
: X
A
X
J
= 0 versus H
1
: X
A
X
J
=0

ANSWER:
c
KEYWORDS: Z test for mean differences, form of hypothesis


26. Referring to Table 10-1, assuming the independent samples procedure was used, calculate the value of the test
statistic.

a) Z =
65.75 79.83
9.82
211
+
9.82
100

b) Z =
65.75 79.83
11.07
211
+
6.41
100

c) Z =
65.7579.83
9.82
2
211
+
9.82
2
100

d) Z =
65.7579.83
11.07
2
211
+
6.41
2
100

ANSWER:
d
KEYWORDS: Z test for mean differences, test statistic

27. Referring to Table 10-1, suppose that the test statistic is Z = 2.45. Find the p-value if we assume that the
alternative hypothesis was a two-tailed test ( 0 :
1
=
J A
H ).
a) 0.0071
b) 0.0142
c) 0.4929
d) 0.9858

ANSWER:
b
KEYWORDS: Z test for mean differences, p-value

TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning their starting
salaries. Of primary interest to the researcher was the effect of gender on starting salaries. Analysis of the mean
salaries of the females and males in the sample is given below.

Size Mean Std Dev
Females 18 48,266.7 13,577.63
Males 12 55,000 11,741.29
Std Error = 4,764.82
Means Diff = 6,733.3 Z = 1.4528 2-tailed p-value = 0.1463
t = 1.4221 2-tailed p-value = 0.1574

28. Referring to Table 10-2, the researcher was attempting to show statistically that the female MBA graduates have
a significantly lower mean starting salary than the male MBA graduates. According to the test run, which of the
following is an appropriate alternative hypothesis?
a)
1 females males
: H >
b)
1 females males
: H <
c)
1 females males
: H =
d)
1 females males
: H =

ANSWER:
b

a significantly lower mean starting salary than the male MBA graduates. From the analysis in Table 10-2, the
correct test statistic is:
a) 4,634.72.
b) 1.4221.
c) 1.4528.
d) 6,733.33.

ANSWER:
b
KEYWORDS: pooled-variance t test, test statistic


a significantly lower mean starting salary than the male MBA graduates. The proper conclusion for this test is:
a) At the o = 0.10 level, there is sufficient evidence to indicate a difference in the mean starting salaries
of male and female MBA graduates.
b) At the o = 0.10 level, there is sufficient evidence to indicate that females have a lower mean starting
salary than male MBA graduates.
c) At the o = 0.10 level, there is sufficient evidence to indicate that females have a higher mean starting
salary than male MBA graduates.
d) At the o = 0.10 level, there is insufficient evidence to indicate any difference in the mean starting
salaries of male and female MBA graduates.

ANSWER:
b
KEYWORDS: pooled-variance t test, conclusion

a significantly lower mean starting salary than the male MBA graduates. What assumptions were necessary to
conduct this hypothesis test?
a) Both populations of salaries (male and female) must have approximate normal distributions.
b) The population variances are approximately equal.
c) The samples were randomly and independently selected.
d) All of the above assumptions were necessary.

ANSWER:
d


TABLE 10-3

The use of preservatives by food processors has become a controversial issue. Suppose 2 preservatives are
extensively tested and determined safe for use in meats. A processor wants to compare the preservatives for their
effects on retarding spoilage. Suppose 15 cuts of fresh meat are treated with preservative A and 15 are treated with
preservative B, and the number of hours until spoilage begins is recorded for each of the 30 cuts of meat. The results
are summarized in the table below.
Preservative A Preservative B
X
A
= 106.4 hours X
B
= 96.54 hours
S
A
= 10.3 hours S
B
= 13.4 hours

32. Referring to Table 10-3, state the test statistic for determining if the population variances differ for preservatives
A and B.
a) F = 3.10
b) F = 0.5908
c) F = 0.7687
d) F = 0.8250

ANSWER:
b
KEYWORDS: F test for equality of variances, test statistic

33. Referring to Table 10-3, what assumptions are necessary for a comparison of the population variances to be
valid?
a) Both sampled populations are normally distributed.
b) Both samples are random and independent.
c) Neither (a) nor (b) is necessary.
d) Both (a) and (b) are necessary.

ANSWER:
d
KEYWORDS: F test for equality of variances, assumption


TABLE 10-4

A real estate company is interested in testing whether, on average, families in Gotham have been living in their
current homes for less time than the families in Metropolis have. A random sample of 100 families from Gotham
and a random sample of 150 families in Metropolis yield the following data on length of residence in current homes:
Gotham: X
G
= 35 months, s
G
2
= 900 Metropolis: X
M
= 50 months, s
M
2
= 1050

34. Referring to Table 10-4, which of the following represents the relevant hypotheses tested by the real estate
company?
a) H
0
:
G

M
> 0 versus H
1
:
G
M
< 0
b) H
0
:
G
M
s 0 versus H
1
:
G

M
> 0
c) H
0
:
G

M
= 0 versus H
1
:
G

M
= 0
d) H
0
: X
G
X
M
>0 versus H
1
: X
G
X
M
<0

ANSWER:
a

35. Referring to Table 10-4, what is the estimated standard error of the difference between the 2 sample means?
a) 4.06
b) 5.61
c) 8.01
d) 16.00

ANSWER:
a
KEYWORDS: pooled-variance t test, standard error

36. Referring to Table 10-4, what is an unbiased point estimate for the mean of the sampling distribution of the
difference between the 2 sample means?
a) 22
b) 10
c) 15
d) 0

ANSWER:
c
KEYWORDS: pooled-variance t test, unbiased, point estimate


37. Referring to Table 10-4, what is (are) the critical value(s) of the relevant hypothesis test if the level of
significance is 0.05?
a) t ~ Z = 1.645
b) t ~ Z = 1.96
c) t ~ Z = 1.96
d) t ~ Z = 2.080

ANSWER:
a
KEYWORDS: pooled-variance t test, critical value

38. Referring to Table 10-4, what is (are) the critical value(s) of the relevant hypothesis test if the level of
significance is 0.01?
a) t ~ Z = 1.96
b) t ~ Z = 1.96
c) t ~ Z = 2.080
d) t ~ Z = 2.33

ANSWER:
d

39. Referring to Table 10-4, what is the standardized value of the estimate of the mean of the sampling distribution
of the difference between sample means?
a) 8.75
b) 3.69
c) 2.33
d) 1.96

ANSWER:
b

40. Referring to Table 10-4, suppose o = 0.10. Which of the following represents the result of the relevant
hypothesis test?
a) The alternative hypothesis is rejected.
b) The null hypothesis is rejected.
c) The null hypothesis is not rejected.
d) Insufficient information exists on which to make a decision.

ANSWER:
b
KEYWORDS: pooled-variance t test, decision


hypothesis test?

ANSWER:
b

hypothesis test?

ANSWER:
b

43. Referring to Table 10-4, suppose o = 0.1. Which of the following represents the correction conclusion?
a) There is not enough evidence that, on average, families in Gotham have been living in their current
homes for less time than families in Metropolis have.
b) There is enough evidence that, on average, families in Gotham have been living in their current homes
for less time than families in Metropolis have.
c) There is not enough evidence that, on average, families in Gotham have been living in their current
homes for no less time than families in Metropolis have.
d) There is enough evidence that, on average, families in Gotham have been living in their current homes
for no less time than families in Metropolis have.
ANSWER:
b


ANSWER:
b

ANSWER:
b


TABLE 10-5

To test the effects of a business school preparation course, 8 students took a general business test before and after
the course. The results are given below.
Exam Score Exam Score
Student Before Course (1) After Course (2)
1 530 670
2 690 770
3 910 1,000
4 700 710
5 450 550
6 820 870
7 820 770
8 630 610

46. Referring to Table 10-5, the number of degrees of freedom is
a) 14.
b) 13.
c) 8.
d) 7.

ANSWER:
d
KEYWORDS: t test for mean differences, degrees of freedom

47. Referring to Table 10-5, the value of the sample mean difference is _______ if the difference scores reflect the
results of the exam after the course minus the results of the exam before the course.
a) 0
b) 50
c) 68
d) 400

ANSWER:
b
KEYWORDS: t test for mean differences, test statistic

48. Referring to Table 10-5, the value of the standard error of the difference scores is
a) 65.027.
b) 60.828.
c) 22.991.
d) 14.696.

ANSWER:
c
KEYWORDS: t test for mean differences, standard error

49. Referring to Table 10-5, what is the critical value for testing the hypothesis at the 5% level if the difference
scores reflect the results of the exam after the course minus the results of the exam before the course?
a) 2.365
b) 2.145
c) 1.761
d) 1.895

ANSWER:
d
KEYWORDS: t test for mean differences, critical value

50. Referring to Table 10-5, at the 0.05 level of significance, the decision for this hypothesis test would be:
a) reject the null hypothesis.
b) do not reject the null hypothesis.
c) reject the alternative hypothesis.
d) It cannot be determined from the information given.

ANSWER:
a
KEYWORDS: t test for mean differences, decision

51. Referring to Table 10-5, at the 0.05 level of significance, the conclusion for this hypothesis test would be:
a) the business school preparation course does improve exam scores.
b) the business school preparation course does not improve exam scores.
c) the business school preparation course has no impact on exam scores.
d) It cannot be drawn from the information given.

ANSWER:
a
KEYWORDS: t test for mean differences, conclusion

52. True or False: Referring to Table 10-5, one must assume that the population of difference scores is normally
distributed.

ANSWER:
True
KEYWORDS: t test for mean differences, assumption

53. Referring to Table 10-5, the calculated value of the test statistic is ________.

ANSWER:
2.175
KEYWORDS: t test for mean differences, test statistic

54. Referring to Table 10-5, the p-value of the test statistic is ________.

ANSWER:
0.0331
EXPLANATION: p-value obtained from Excel
KEYWORDS: t test for mean differences, p-value

55. True or False: Referring to Table 10-5, in examining the differences between related samples we are essentially
sampling from an underlying population of difference "scores."

ANSWER:
True
KEYWORDS: t test for mean differences, sampling distribution

56. A local real estate appraiser analyzed the sales prices of homes in 2 neighborhoods to the corresponding
appraised values of the homes. The goal of the analysis was to compare the distribution of sale-to-appraised
ratios from homes in the 2 neighborhoods. Random and independent samples were selected from the 2
neighborhoods from last years homes sales, 8 from each of the 2 neighborhoods. Identify the nonparametric
method that would be used to analyze the data.
a) the Wilcoxon signed ranks test, using the test statistic Z
b) the Wilcoxon signed ranks test, using the test statistic W
c) the Wilcoxon rank sum test, using the test statistic T
1

d) the Wilcoxon rank sum test, using the test statistic Z

ANSWER:
c
KEYWORDS: Wilcoxon rank sum test, test statistic

57. True or False: The sample size in each independent sample must be the same if we are to test for differences
between the means of 2 independent populations.

ANSWER:
False
KEYWORDS: pooled-variance t test, sample size

58. True or False: When we test for differences between the means of 2 independent populations, we can only use a
two-tailed test.

ANSWER:
False
KEYWORDS: pooled-variance t test, rejection region


59. True or False: When testing for differences between the means of 2 related populations, we can use either a one-
tailed or two-tailed test.

ANSWER:
True
KEYWORDS: t test for mean difference, rejection region

60. True or False: Repeated measurements from the same individuals is an example of data collected from 2 related
populations.

ANSWER:
True

61. True or False: The test for the equality of 2 population variances assumes that each of the 2 populations is
normally distributed.

ANSWER:
True
KEYWORDS: F test for equality of variances, assumption

62. True or False: For all two-sample tests, the sample sizes must be equal in the 2 groups.

ANSWER:
False
KEYWORDS: sample size

63. True or False: When the sample sizes are equal, the pooled-variance of the 2 groups is the average of the 2
sample variances.

ANSWER:
True
KEYWORDS: pooled-variance t test, sample size

64. True or False: The F distribution is symmetric.

ANSWER:
False
KEYWORDS: F distribution, properties


65. True or False: The F distribution can only have positive values.

ANSWER:
True

66. True or False: All F tests are one-tailed tests.

ANSWER:
False

67. True or False: The procedure for the Wilcoxon rank sum test requires that we rank each group separately rather
than together.

ANSWER:
False
KEYWORDS: Wilcoxon rank sum test

68. True of False: When performing a two-tailed test, the lower-tailed critical value of the F distribution with
1
1 n
degrees of freedom in the numerator and
2
1 n degrees of freedom in the denominator is exactly equivalent to
the reciprocal of the upper-tailed critical value of the F distribution with
2
1 n degrees of freedom in the
numerator and
1
1 n degrees of freedom in the denominator.

ANSWER:
True

69. Given the upper-tailed critical value of an F test, with 3 degrees of freedom in the numerator and 8 degrees of
freedom in the denominator being 4.07, the lower-tailed critical value of an F test with 8 degrees of freedom in
the numerator and 3 degrees of freedom in the denominator for the same level of significance will be
_________.

ANSWER:
0.2457
KEYWORDS: F distribution, critical value, properties

70. True or False: A researcher is curious about the effect of sleep on students test performances. He chooses 60
students and gives each 2 tests: one given after 2 hours sleep and one after 8 hours sleep. The test the
researcher should use would be a related samples test.

ANSWER:
True
KEYWORDS: t test for mean difference, Wilcoxon signed ranks test

71. When testing H
0
:
1

2
= 0 versus H
1
:
1
2
= 0 , the observed value of the Z-score was found to be
2.13. The p-value for this test would be
a) 0.0166.

b) 0.0332.
c) 0.9668.
d) 0.9834.

ANSWER:
b
KEYWORDS: Z test for difference in means, p-value

72. When testing
0 1 2
: 0 H s versus
1 1 2
: 0 H > , the observed value of the Z-score was found to be
a) 0.0166.
b) 0.0332.
c) 0.9668.
d) 0.9834.

ANSWER:
d

73. When testing
0 1 2
: 0 H > versus
1 1 2
: 0 H < , the observed value of the Z-score was found to be
a) 0.0166.
b) 0.0332.
c) 0.9668.
d) 0.9834.

ANSWER:
a

74. True or False: A statistics professor wanted to test whether the grades on a statistics test were the same for upper
and lower classmen. The professor took a random sample of size 10 from each, conducted a test, and found out
that the variances were equal. For this situation, the professor should use a t test with related samples.

ANSWER:
False


75. True or False: A statistics professor wanted to test whether the grades on a statistics test were the same for upper
and lower classmen. The professor took a random sample of size 10 from each, conducted a test and found out
that the variances were equal. For this situation, the professor should use a t test with independent samples.

ANSWER:
True

76. True or False: A Marine drill instructor recorded the time in which each of 11 recruits completed an obstacle
course both before and after basic training. To test whether any improvement occurred, the instructor would use
a t distribution with 11 degrees of freedom.

ANSWER:
False

77. True or False: A Marine drill instructor recorded the time in which each of 11 recruits completed an obstacle
course both before and after basic training. To test whether any improvement occurred, the instructor would use
a t distribution with 10 degrees of freedom.

ANSWER:
True

TABLE 10-6

Two samples, each of size 25, are taken from independent populations assumed to be normally distributed with
equal variances. The first sample has a mean of 35.5 and a standard deviation of 3.0, while the second sample has a
mean of 33.0 and a standard deviation of 4.0.

78. Referring to Table 10-6, the pooled (i.e., combined) variance is _______.

ANSWER:
12.5

79. Referring to Table 10-6, the computed t statistic is _______.

ANSWER:
2.50


80. Referring to Table 10-6, there are _______ degrees of freedom for this test.

ANSWER:
48

81. Referring to Table 10-6, the critical values for a two-tailed test of the null hypothesis of no difference in the
population means at the o = 0.05 level of significance are _______.

ANSWER:
2.0106

82. Referring to Table 10-6, a two-tailed test of the null hypothesis of no difference would _______ (be rejected/not
be rejected) at the o = 0.05 level of significance.

ANSWER:
be rejected

83. Referring to Table 10-6, the p-value for a two-tailed test whose computed t statistic is 2.50 is between _____
and _______ .

ANSWER:
0.01; 0.02
KEYWORDS: pooled-variance t test, p-value

84. Referring to Table 10-6, if we were interested in testing against the one-tailed alternative that
1
>
2
at the o
= 0.01 level of significance, the null hypothesis would (be rejected/not be rejected) _______ .

ANSWER:
be rejected

85. Referring to Table 10-6, the p-value for a one-tailed test whose computed statistic is 2.50 (in the hypothesized
direction) is between _______ and _______ .

ANSWER:
0.005; 0.01
KEYWORDS: pooled-variance t test, p-value


TABLE 10-7

A perfume manufacturer is trying to choose between 2 magazine advertising layouts. An expensive layout would
include a small package of the perfume. A cheaper layout would include a "scratch-and-sniff" sample of the
product. The manufacturer would use the more expensive layout only if there is evidence that it would lead to a
higher approval rating. The manufacturer presents the more expensive layout to 4 groups and determines the
approval rating for each group. He presents the "scratch-and-sniff" layout to 5 groups and again determines the
approval rating of the perfume for each group. The data are given below. Use this to test the appropriate
hypotheses with the Wilcoxon rank sum test with a level of significance of 0.05.

Package Scratch
52 37
68 43
43 53
48 39
47

86. Referring to Table 10-7, the hypotheses that should be used are:
a) H
0
:
1
=
2
versus H
1
:
1
=
2

b) H
0
:
1
s
2
versus H
1
:
1
>
2

c) H
0
: M
1
= M
2
versus H
1
: M
1
= M
2

d) H
0
: M
1
s M
2
versus H
1
: M
1
> M
2

ANSWER:
d

87. Referring to Table 10-7, the rank given to the last observation in the "scratch-and-sniff" group is ________.

ANSWER:
5

88. Referring to Table 10-7, the rank given to the second observation in the "scratch-and-sniff" group is ________.

ANSWER:
3.5


ANSWER:
25.5

90. Referring to Table 10-7, the critical value of the test is ________.

ANSWER:
28

KEYWORDS: Wilcoxon rank sum test, critical value

91. True or False: Referring to Table 10-7, the null hypothesis should be rejected.

ANSWER:
False
KEYWORDS: Wilcoxon rank sum test, decision

92. Referring to Table 10-7, the perfume manufacturer will
a) use the "scratch-and-sniff" layout because there is insufficient evidence to do otherwise.
b) use the package layout because there is insufficient evidence to do otherwise.
c) use the "scratch-and-sniff" layout because there is sufficient evidence to conclude that this is the best
course of action.
d) use the package layout because there is sufficient evidence to conclude that this is the best course of
action.

ANSWER:
a
KEYWORDS: Wilcoxon rank sum test, conclusion

TABLE 10-8

To investigate the efficacy of a diet, a random sample of 16 male patients is drawn from a population of adult males
using the diet. The weight of each individual in the sample is taken at the start of the diet and at a medical follow-up
4 weeks later. Assuming that the population of differences in weight before versus after the diet follow a normal
distribution, the t test for related samples can be used to determine if there was a significant decrease in mean
weight during this period. Suppose the mean decrease in weight over all 16 subjects in the study is 3.0 pounds with
the standard deviation of differences computed as 6.0 pounds.

93. Referring to Table 10-8, the t test should be _______-tailed.

ANSWER:
one
KEYWORDS: t test for mean difference, rejection region

94. Referring to Table 10-8, the computed t statistic is _______.

ANSWER:
2.00
KEYWORDS: t test for mean difference, test statistic

95. Referring to Table 10-8, there are _______ degrees of freedom for this test.

ANSWER:
15

96. Referring to Table 10-8, the critical value for a one-tailed test of the null hypothesis of no difference at the o =
0.05 level of significance is _______.

ANSWER:
1.7531
KEYWORDS: t test for mean difference, critical value

97. Referring to Table 10-8, a one-tailed test of the null hypothesis of no difference would _______ (be rejected/not
be rejected) at the o = 0.05 level of significance.

ANSWER:
be rejected
KEYWORDS: t test for mean difference, decision

98. Referring to Table 10-8, the p-value for a one-tailed test whose computed t statistic is 2.00 is between _______
and _______ .

ANSWER:
0.025; 0.05
KEYWORDS: t test for mean difference, p-value

99. Referring to Table 10-8, if we were interested in testing against the two-tailed alternative that
D
is not equal to
zero at the o = 0.05 level of significance, the null hypothesis would _______ (be rejected/not be rejected).

ANSWER:
not be rejected

100. Referring to Table 10-8, the p-value for a two-tailed test whose computed statistic is 2.00 is between ________
and _______ .

ANSWER:
0.05; 0.10


TABLE 10-9

A buyer for a manufacturing plant suspects that his primary supplier of raw materials is overcharging. In order to
determine if his suspicion is correct, he contacts a second supplier and asks for prices on various materials. He
wants to compare these prices with those of his primary supplier. The data collected is presented in the table below,
with some summary statistics presented (all of these might not be necessary to answer the questions which follow).
The buyer believes that the differences are normally distributed and will use this sample to perform an appropriate
test at a level of significance of 0.01.
Primary Secondary
Material Supplier Supplier Difference
1 $55 $45 $10
2 $48 $47 $1
3 $31 $32 $1
4 $83 $77 $6
5 $37 $37 $0
6 $55 $54 $1
Sum: $309 $292 $17
Sum of Squares: $17,573 $15,472 $139

101. Referring to Table 10-9, the hypotheses that the buyer should test are a null hypothesis that ________ versus
an alternative hypothesis that ________.

ANSWER:
0 1
: 0, : 0
D D
H H s >

102. Referring to Table 10-9, the test to perform is a
a) pooled-variance t test for differences in 2 means.
b) separate-variance t test for differences in 2 means.
c) Wilcoxon rank sum test for differences in 2 medians.
d) t test for mean difference.

ANSWER:
d

103. Referring to Table 10-9, the decision rule is to reject the null hypothesis if ________.

ANSWER:
t > 3.3649



ANSWER:
1.628
KEYWORDS: t test for mean difference, test statistic

105. Referring to Table 10-9, the p-value of the test is between ________ and ________.

ANSWER:
0.05; 0.1


ANSWER:
False

107. Referring to Table 10-9, the buyer should decide that the primary supplier is
a) overcharging because there is strong evidence that this is the case.
b) overcharging because there is insufficient evidence to prove otherwise.
c) not overcharging because there is insufficient evidence to prove otherwise.
d) not overcharging because there is strong evidence to prove otherwise.

ANSWER:
c
KEYWORDS: t test for mean difference, conclusion

108. Referring to Table 10-9, if the buyer had decided to perform a two-tailed test, the p-value would have been
between ________ and ________.

ANSWER:
0.01; 0.2


TABLE 10-10

A perfume manufacturer is trying to choose between 2 magazine advertising layouts. An expensive layout would
include a small package of the perfume. A cheaper layout would include a "scratch-and-sniff" sample of the
product. The manufacturer would use the more expensive layout only if there is evidence that it would lead to a
higher approval rating. The manufacturer presents both layouts to 5 groups and determines the approval rating from
each group on both layouts. The data are given below. Use this to test whether the median difference in approval
rating is different from zero, in favor of the more expensive layout, with a level of significance of 0.05.

Package Scratch
52 37
68 43
43 53
48 39
56 47

109. Referring to Table 10-10, what is the right test to use?
a) Wilcoxon rank sum test for difference in median
b) Wilcoxon rank sum test for median difference
c) Wilcoxon signed ranks test for difference in median
d) Wilcoxon signed ranks test for median difference

ANSWER:
d
KEYWORDS: Wilcoxon signed ranks test

110. Referring to Table 10-10, the hypotheses that should be used are:
a)
0 1
: 0 versus : 0
D D
H M H M = =
b)
0 1
: 0 versus : 0
D D
H M H M s >
c) H
0
: M
1
= M
2
versus H
1
: M
1
= M
2

d) H
0
: M
1
s M
2
versus H
1
: M
1
> M
2

ANSWER:
b
KEYWORDS: Wilcoxon signed ranks test, form of hypothesis

111. Referring to Table 10-10, what are the lower and upper critical values of the test?

ANSWER:
0, 15
KEYWORDS: Wilcoxon signed ranks test, critical value


112. Referring to Table 10-10, what is the rank of the absolute difference for the last pair of observations?

ANSWER:
1.5
KEYWORDS: Wilcoxon signed ranks test, test statistic

113. Referring to Table 10-10, which pair(s) of observations has a negative signed rank?

ANSWER:
Third, or (43, 53)


ANSWER:
12


ANSWER:
False
KEYWORDS: Wilcoxon signed ranks test, decision

116. Referring to Table 10-10, the perfume manufacturer will
a) use the "scratch-and-sniff" layout because there is insufficient evidence to do otherwise.
b) use the package layout because there is insufficient evidence to do otherwise.
c) use the "scratch-and-sniff" layout because there is sufficient evidence to conclude that this is the best
course of action.
d) use the package layout because there is sufficient evidence to conclude that this is the best course of
action.

ANSWER:
a
KEYWORDS: Wilcoxon signed ranks test, conclusion


CHAPTER 11: ANALYSIS OF VARIANCE

117. In a one-way ANOVA, if the computed F statistic exceeds the critical F value, we may
a) reject H
0
since there is evidence all the means differ.
b) reject H
0
since there is evidence of a treatment effect.
c) not reject H
0
since there is no evidence of a difference.
d) not reject H
0
because a mistake has been made.

ANSWER:
b
KEYWORDS: one-way analysis of variance, decision

118. Which of the following components in an ANOVA table are not additive?
a) sum of squares
b) degrees of freedom
c) mean squares
d) It is not possible to tell.

ANSWER:
c
KEYWORDS: one-way analysis of variance, sum of squares, properties

119. Why would you use the Tukey-Kramer procedure?
a) to test for normality
b) to test for homogeneity of variance
c) to test independence of errors
d) to test for differences in pairwise means

ANSWER:
d
KEYWORDS: Tukey-Kramer procedure

120. A completely randomized design
a) has only one factor, with several treatment groups.
b) can have more than one factor, each with several treatment groups.
c) has one factor and one block.
d) has one factor, one block, and multiple values.

ANSWER:
a
KEYWORDS: completely randomized design

121. The F test statistic in a one-way ANOVA is
a) MSW/MSA.
b) SSW/SSA.
c) MSA/MSW.
d) SSA/SSW.

ANSWER:
c
KEYWORDS: one-way analysis of variance, F test for factor

122. The degrees of freedom for the F test in a one-way ANOVA are
a) (n c) and (c 1).
b) (c 1) and (n c).
c) (c n) and (n 1).
d) (n 1) and (c n).

ANSWER:
b
KEYWORDS: degrees of freedom, F test for factor

123. In a one-way ANOVA, the null hypothesis is always
a) there is no treatment effect.
b) there is some treatment effect.
c) all the population means are different.
d) some of the population means are different.

ANSWER:
a
KEYWORDS: one-way analysis of variance, form of hypothesis

124. In a one-way ANOVA
a) an interaction term is present.
b) an interaction effect can be tested.
c) there is no interaction term.
d) the interaction term has (c 1)(n 1) degrees of freedom.

ANSWER:
c
KEYWORDS: one-way analysis of variance, properties, interaction


125. Interaction in an experimental design can be tested in
a) a completely randomized model.
b) a randomized block model.
c) a two-factor model.
d) all ANOVA models.

ANSWER:
c
KEYWORDS: two-factor analysis of variance, interaction, properties

126. In a two-way ANOVA, the degrees of freedom for the interaction term are
a) (r 1)(c 1).
b) rc(n 1).
c) (r 1).
d) rcn + 1.

ANSWER:
a
KEYWORDS: two-factor analysis of variance, interaction, degrees of freedom

127. In a two-way ANOVA, the degrees of freedom for the "error" term are
a) (r 1)(c 1).
b) rc(n 1).
c) (r 1).
d) rcn + 1.

ANSWER:
b
KEYWORDS: two-factor analysis of variance, degrees of freedom

128. Suppose there is interest in comparing the median response time for three independent groups learning a
specific task. The appropriate nonparametric procedure is the
a) Wilcoxon rank sums test.
b) Wilcoxon signed ranks test.
c) Kruskal-Wallis rank test for differences in medians.

ANSWER:
c
KEYWORDS: Kruskal-Wallis rank test


129. The Kruskal-Wallis rank test for differences in more than two medians is a nonparametric alternative to
a) Fisher's ANOVA F test for completely randomized experiments.
b) Student's t test for related samples.
c) Student's t test for independent samples.
d) Wilcoxon's rank sum test for differences in two medians.

ANSWER:
a

TABLE 11-1

Psychologists have found that people are generally reluctant to transmit bad news to their peers. This phenomenon
has been termed the MUM effect. To investigate the cause of the MUM effect, 40 undergraduates at Duke
University participated in an experiment. Each subject was asked to administer an IQ test to another student and
then provide the test taker with his or her percentile score. Unknown to the subject, the test taker was a bogus
student who was working with the researchers. The experimenters manipulated two factors: subject visibility and
success of test taker, each at two levels. Subject visibility was either visible or not visible to the test taker. Success
of the test taker was either visible or not visible to the test taker. Success of the test taker was either top 20% or
bottom 20%. Ten subjects were randomly assigned to each of the 2 x 2 = 4 experimental conditions, then the time
(in seconds) between the end of the test and the delivery of the percentile score from the subject to the test taker was
measured. (This variable is called the latency to feedback.) The data were subjected to appropriate analyses with
the following results:

Source df SS MS F PR > F
Subject visibility 1 1380.24 1380.24 4.26 0.043
Test taker success 1 1325.16 1325.16 4.09 0.050
Interaction 1 3385.80 3385.80 10.45 0.002
Error 36 11,664.00 324.00
Total 39 17,755.20

130. Referring to Table 11-1, what type of experimental design was employed in this study?
a) completely randomized design with 4 treatments
b) randomized block design with four treatments and 10 blocks
c) 2 x 2 factorial design with 10 replications

ANSWER:
c
KEYWORDS: two-factor analysis of variance, two-factor factorial design


131. Referring to Table 11-1, at the 0.01 level, what conclusions can you draw from the analyses?
a) At the 0.01 level, subject visibility and test taker success are significant predictors of latency feedback.
b) At the 0.01 level, the model is not useful for predicting latency to feedback.
c) At the 0.01 level, there is evidence to indicate that subject visibility and test taker success interact.
d) At the 0.01 level, there is no evidence of interaction between subject visibility and test taker success.

ANSWER:
c
KEYWORDS: two-factor analysis of variance, F test for interaction, decision, conclusion, interaction

132. Referring to Table 11-1, in the context of this study, interpret the statement: Subject visibility and test
taker success interact.
a) The difference between the mean feedback time for visible and nonvisible subjects depends on the
success of the test taker.
b) The difference between the mean feedback time for test takers scoring in the top 20% and bottom 20%
depends on the visibility of the subject.
c) The relationship between feedback time and subject visibility depends on the success of the test taker.
d) All of the above are correct interpretations.

ANSWER:
d
KEYWORDS: two-factor analysis of variance, interaction, conclusion

133. An airline wants to select a computer software package for its reservation system. Four software
packages (1, 2, 3, and 4) are commercially available. The airline will choose the package that bumps as few
passengers, on average, as possible during a month. An experiment is set up in which each package is used to
make reservations for 5 randomly selected weeks. (A total of 20 weeks was included in the experiment.) The
number of passengers bumped each week is given below. How should the data be analyzed?
Package 1: 12, 14, 9, 11, 16
Package 2: 2, 4, 7, 3, 1
Package 3: 10, 9, 6, 10, 12
Package 4: 7, 6, 6, 15, 12

a) F test for differences in variances
b) one-way ANOVA F test
c) t test for the differences in means
d) t test for the mean difference

ANSWER:
b
KEYWORDS: one-way analysis of variance, F test for factor


TABLE 11-2

An airline wants to select a computer software package for its reservation system. Four software packages (1, 2, 3,
and 4) are commercially available. The airline will choose the package that bumps as few passengers, on average, as
possible during a month. An experiment is set up in which each package is used to make reservations for 5
randomly selected weeks. (A total of 20 weeks was included in the experiment.) The number of passengers bumped
each week is obtained, which gives rise to the following Excel output:

ANOVA
Source of Variation SS df MS F p-value F crit
Between Groups 212.4 3 8.304985 0.001474 3.238867
Within Groups 136.4 8.525

Total 348.8

134. Referring to Table 11-2, the within groups degrees of freedom is
a) 3.
b) 4.
c) 16.
d) 19.

ANSWER:
c
KEYWORDS: one-way analysis of variance, degrees of freedom

135. Referring to Table 11-2, the total degrees of freedom is
a) 3.
b) 4.
c) 16.
d) 19.

ANSWER:
d

136. Referring to Table 11-2, the among group mean squares is
a) 8.525.
b) 70.8.
c) 212.4.
d) 637.2.

ANSWER:
b
KEYWORDS: one-way analysis of variance, mean squares

137. Referring to Table 11-2, at a significance level of 1%,
a) there is insufficient evidence to conclude that the average numbers of customers bumped by the 4
packages are not all the same.
b) there is insufficient evidence to conclude that the average numbers of customers bumped by the 4
packages are all the same.
c) there is sufficient evidence to conclude that the average numbers of customers bumped by the 4
packages are not all the same.
d) there is sufficient evidence to conclude that the average numbers of customers bumped by the 4
packages are all the same.

ANSWER:
c
KEYWORDS: one-way analysis of variance, F test for factor, decision, conclusion

TABLE 11-3

A realtor wants to compare the average sales-to-appraisal ratios of residential properties sold in four neighborhoods
(A, B, C, and D). Four properties are randomly selected from each neighborhood and the ratios are recorded for
each, as shown below.
A: 1.2, 1.1, 0.9, 0.4 C: 1.0, 1.5, 1.1, 1.3
B: 2.5, 2.1, 1.9, 1.6 D: 0.8, 1.3, 1.1, 0.7
Interpret the results of the analysis summarized in the following table:

Neighborhoods 2.97 0.990 8.31 0.0260
Error 12
Total 4.40

138. Referring to Table 11-3, the among group degrees of freedom is
a) 3.
b) 4.
c) 12.
d) 16.

ANSWER:
a

139. Referring to Table 11-3, the within group sum of squares is
a) 0.119.
b) 1.43.
c) 2.97.
d) 4.40.

ANSWER:
b
KEYWORDS: one-way analysis of variance, sum of squares

140. Referring to Table 11-3, the within group mean squares is
a) 0.119.
b) 0.990.
c) 1.109.
d) 8.31.

ANSWER:
a

141. Referring to Table 11-3,
a) at the 0.05 level of significance, the mean ratios for the 4 neighborhoods are not all the same.
b) at the 0.01 level of significance, the mean ratios for the 4 neighborhoods are not all the same.
c) at the 0.10 level of significance, the mean ratios for the 4 neighborhoods are not significantly different.
d) at the 0.05 level of significance, the mean ratios for the 4 neighborhoods are not significantly different
from 0.

ANSWER:
a
KEYWORDS: one-way analysis of variance, F test for factor, decision, conclusion

142. A campus researcher wanted to investigate the factors that affect visitor travel time in a complex,
multilevel building on campus. Specifically, he wanted to determine whether different building signs (building
maps versus wall signage) affect the total amount of time visitors require to reach their destination, and whether
that time depends on whether the starting location is inside or outside the building. Three subjects were assigned
to each of the combinations of signs and starting locations, and travel times in seconds from beginning to
destination were recorded. How should the data be analyzed?
Starting Room
Interior Exterior
Wall Signs 141, 119, 238 224, 339, 139
Map 85, 94, 126 226, 129, 130

a) completely randomized design
b) randomized block design
c) 2 x 2 factorial design
d) Kruskal-Wallis rank test

ANSWER:
c
KEYWORDS: two-factor factorial design

TABLE 11-4

A campus researcher wanted to investigate the factors that affect visitor travel time in a complex, multilevel
building on campus. Specifically, he wanted to determine whether different building signs (building maps versus
wall signage) affect the total amount of time visitors require to reach their destination, and whether that time
depends on whether the starting location is inside or outside the building. Three subjects were assigned to each of
the combinations of signs and starting locations, and travel times in seconds from beginning to destination were
recorded. An Excel output of the appropriate analysis is given below:

ANOVA
Source of Variation SS df MS F p-value F crit
Signs 14008.33 14008.33 0.11267 5.317645
Starting Location 12288 2.784395 0.13374 5.317645
Interaction 48 48 0.919506 5.317645
Within 35305.33 4413.167

Total 61649.67 11

143. Referring to Table 11-4, the degrees of freedom for the different building signs (factor A) is
a) 1.
b) 2.
c) 3.
d) 8.

ANSWER:
a

144. Referring to Table 11-4, the within (error) degrees of freedom is
a) 1.
b) 4.
c) 8.
d) 11.

ANSWER:
c


145. Referring to Table 11-4, the mean squares for starting location (factor B) is
a) 48.
b) 4,413.17.
c) 12,288.
d) 14,008.3.

ANSWER:
c
KEYWORDS: two-factor analysis of variance, mean squares

146. Referring to Table 11-4, the F test statistic for testing the main effect of types of signs is
a) 0.0109.
b) 2.7844.
c) 3.1742.
d) 5.3176.

ANSWER:
c
KEYWORDS: two-factor analysis of variance, F test for factor

147. Referring to Table 11-4, the F test statistic for testing the interaction effect between the types of signs
and the starting location is
a) 0.0109.
b) 2.7844.
c) 3.1742.
d) 5.3176.

ANSWER:
a
KEYWORDS: two-factor analysis of variance, F test for interaction, interaction

148. Referring to Table 11-4, at 1% level of significance,
a) there is insufficient evidence to conclude that the difference between the average traveling times for the
different starting locations depends on the types of signs.
b) there is insufficient evidence to conclude that the difference between the average traveling times for the
different types of signs depends on the starting locations.
c) there is insufficient evidence to conclude that the relationship between traveling times and the types of
signs depends on the starting locations.
d) all of the above

ANSWER:
d
KEYWORDS: two-factor analysis of variance, F test for factor, F test for interaction, decision, conclusion


149. Referring to Table 11-4, at 10% level of significance,
a) there is sufficient evidence to conclude that the difference between the average traveling times for the
different starting locations depends on the types of signs.
b) there is insufficient evidence to conclude that the difference between the average traveling times for the
different types of signs depends on the starting locations.
c) there is sufficient evidence to conclude that the difference between the average traveling times for the
different starting locations does not depend on the types of signs.

ANSWER:
b
KEYWORDS: two-factor analysis of variance, F test for factor, decision, conclusion

150. The Journal of Business Venturing reported on the activities of entrepreneurs during the organization
creation process. As part of a designed study, a total of 71 entrepreneurs were interviewed and divided into 3
groups: those that were successful in founding a new firm (n
1
= 34), those still actively trying to establish a firm
(n
2
= 21), and those who tried to start a new firm but eventually gave up (n
3
= 16). The total number of activities
undertaken (e.g., developed a business plan, sought funding, looked for facilities) by each group over a
specified time period during organization creation was measured. The objective is to compare the mean number
of activities of the 3 groups of entrepreneurs. Because of concerns over necessary assumption of the parametric
analysis, it was decided to use a nonparametric analysis. Identify the nonparametric method that would be used
to analyze the data.
a) Wilcoxon rank sums test
b) Wilcoxon signed ranks test
c) Kruskal-Wallis rank test for differences in medians
d) one-way ANOVA F test

ANSWER:
c


TABLE 11-5

A physician and president of a Tampa Health Maintenance Organization (HMO) are attempting to show the benefits
of managed health care to an insurance company. The physician believes that certain types of doctors are more cost-
effective than others. One theory is that Primary Specialty is an important factor in measuring the cost-effectiveness
of physicians. To investigate this, the president obtained independent random samples of 20 HMO physicians from
each of 4 primary specialties - General Practice (GP), Internal Medicine (IM), Pediatrics (PED), and Family
Physicians (FP) - and recorded the total charges per member per month for each. A second factor which the
president believes influences total charges per member per month is whether the doctor is a foreign or USA medical
school graduate. The president theorizes that foreign graduates will have higher mean charges than USA graduates.
To investigate this, the president also collected data on 20 foreign medical school graduates in each of the 4 primary
specialty types described above. So information on charges for 40 doctors (20 foreign and 20 USA medical school
graduates) was obtained for each of the 4 specialties. The results for the ANOVA are summarized in the following
table.

Specialty 3 22,855 7,618 60.94 0.0001
Med school 1 105 105 0.84 0.6744
Interaction 3 890 297 2.38 0.1348
Error 152 18,950
Total 159 42,800

151. Referring to Table 11-5, what was the total number of doctors included in the study?
a) 20
b) 40
c) 159
d) 160

ANSWER:
d
KEYWORDS: two-factor analysis of variance, properties

152. Referring to Table 11-5, what degrees of freedom should be used to determine the critical value of the F
ratio against which to test for interaction between the two factors?
a) numerator df = 1, denominator df = 159
b) numerator df = 3, denominator df = 159
c) numerator df = 1, denominator df = 152
d) numerator df = 3, denominator df = 152

ANSWER:
d
KEYWORDS: two-factor analysis of variance, F test for interaction, degrees of freedom


153. Referring to Table 11-5, interpret the test for interaction.
a) There is insufficient evidence to say at the 0.10 level of significance that the difference between the
mean charges for foreign and USA graduates depends on primary specialty.
b) There is sufficient evidence to say at the 0.10 level of significance that the difference between the mean
charges for foreign and USA graduates depends on primary specialty.
c) There is sufficient evidence at the 0.10 level of significance of a difference between the mean charges
for foreign and USA medical graduates.
d) There is sufficient evidence to say at the 0.10 level of significance that mean charges depend on both
primary specialty and medical school.

ANSWER:
a
KEYWORDS: two-factor analysis of variance, interaction, interpretation

ratio against which to test for differences in the mean charges for doctors among the four primary specialty
areas?

ANSWER:
d
KEYWORDS: two-factor analysis of variance, F test for factor, degrees of freedom

ratio against which to test for differences between the mean charges of foreign and USA medical school
graduates?

ANSWER:
c
KEYWORDS: two-factor analysis of variance, F test for factor, degrees of freedom


156. Referring to Table 11-5, is there evidence of a difference between the mean charges of foreign and USA
medical school graduates?
a) Yes, the test for the main effect for primary specialty is significant at o = 0.10.
b) No, the test for the main effect for medical school is not significant at o = 0.10.
c) No, the test for the interaction is not significant at o = 0.10.
d) Maybe, but we need information on the | -estimates to fully answer the question.

ANSWER:
b

157. Referring to Table 11-5, what assumption(s) need(s) to be made in order to conduct the test for
differences between the mean charges of foreign and USA medical school graduates?
a) There is no significant interaction effect between the area of primary specialty and the medical school
on the doctors mean charges.
b) The charges in each group of doctors sampled are drawn from normally distributed populations.
c) The charges in each group of doctors sampled are drawn from populations with equal variances.
d) All of the above are necessary assumptions.

ANSWER:
d
KEYWORDS: two-factor analysis of variance, assumptions

158. True or False: The analysis of variance (ANOVA) tests hypotheses about the population variance.

ANSWER:
False
KEYWORDS: one-way analysis of variance

159. True or False: The F test, in a completely randomized model, is just an expansion of the t test for
independent samples.

ANSWER:
True
KEYWORDS: completely randomized design, F test for factor

160. True or False: When the F test is used for ANOVA, the rejection region is always in the right tail.

ANSWER:
True
KEYWORDS: F test for factor, rejection region


161. True or False: A completely randomized design with 4 groups would have 6 possible pairwise
comparisons.

ANSWER:
True
KEYWORDS: completely randomized design, properties

162. True or False: If you are comparing the average sales among 3 different brands, you are dealing with a
three-way ANOVA design.

ANSWER:
False
KEYWORDS: one-way analysis of variance, properties

163. True or False: The MSE must always be positive.

ANSWER:
True
KEYWORDS: mean squares, properties

164. True or False: In a two-way ANOVA, it is easier to interpret main effects when the interaction
component is not significant.

ANSWER:
True
KEYWORDS: two-factor analysis of variance, interpretation

165. True or False: In a one-factor ANOVA analysis, the among sum of squares and within sum of squares
must add up to the total sum of squares.

ANSWER:
True
KEYWORDS: one-way analysis of variance, sum of squares, properties

166. True or False: In a two-factor ANOVA analysis, the sum of squares due to both factors, the interaction
sum of squares, and the within sum of squares must add up to the total sum of squares.

ANSWER:
True
KEYWORDS: two-factor analysis of variance, sum of squares, properties

TABLE 11-6

As part of an evaluation program, a sporting goods retailer wanted to compare the downhill coasting speeds of 4
brands of bicycles. She took 3 of each brand and determined their maximum downhill speeds. The results are
presented in miles per hour in the table below.
Trial Barth Tornado Reiser Shaw
1 43 37 41 43
2 46 38 45 45
3 43 39 42 46

167. Referring to Table 11-6, the sporting goods retailer decided to perform an ANOVA F test. The amount
of total variation or SST is __________.

ANSWER:
102.67
KEYWORDS: one-way analysis of variance, sum of squares, interpretation

168. Referring to Table 11-6, the among group variation or SSA is __________.

ANSWER:
81.33

169. Referring to Table 11-6, the within group variation or SSW is __________.

ANSWER:
21.33

170. Referring to Table 11-6, the value of MSA is __________, while MSW is __________.

ANSWER:
27.11; 2.67

171. Referring to Table 11-6, the null hypothesis that the average downhill coasting speeds of the 4 brands of
bicycles are equal, will be rejected at a level of significance of 0.05 if the value of the test statistic is greater
than __________.

ANSWER:
4.07
KEYWORDS: one-way analysis of variance, F test for factor, decision


172. Referring to Table 11-6, in testing the null hypothesis that the average downhill coasting speeds of the 4
brands of bicycles are equal, the value of the test statistic is __________.

ANSWER:
10.17
KEYWORDS: one-way analysis of variance, F test for factor, test statistic

173. Referring to Table 11-6, construct the ANOVA table from the sample data.

ANSWER:
Analysis of Variance
Source df SS MS F p
Bicycle Brands 3 81.33 27.11 10.17 0.004*
Error 8 21.33 2.67
Total 11 102.67
* or p < 0.005, tabular value

174. True or False: Referring to Table 11-6, the null hypothesis should be rejected at a 5% level of
significance.

ANSWER:
True
KEYWORDS: one-way analysis of variance, decision

175. True or False: Referring to Table 11-6, the decision made implies that all 4 means are significantly
different.

ANSWER:
False
KEYWORDS: one-way analysis of variance, conclusion, interpretation

176. True or False: Referring to Table 11-6, the test is valid only if the population of speeds has the same
variance for the 4 brands.

ANSWER:
True
KEYWORDS: one-way analysis of variance, assumption


177. True or False: Referring to Table 11-6, the test is less sensitive to the assumption that the population of
speeds has the same variance for the 4 brands if the sample sizes of the 4 brands are equal.

ANSWER:
True

178. True or False: Referring to Table 11-6, the test is valid only if the population of speeds is normally
distributed.

ANSWER:
True

179. True or False: Referring to Table 11-6, the test is robust to the violation of the assumption that the
population of speeds is normally distributed.

ANSWER:
True

180. Referring to Table 11-6, the sporting goods retailer decided to compare the 4 treatment means by using
the Tukey-Kramer procedure with an overall level of significance of 0.05. There are ________ pairwise
comparisons that can be made.

ANSWER:
6
KEYWORDS: one-way analysis of variance, Tukey-Kramer procedure

181. Referring to Table 11-6, using an overall level of significance of 0.05, the critical value of the
Studentized range Q used in calculating the critical range for the Tukey-Kramer procedure is ________.

ANSWER:
4.53
KEYWORDS: one-way analysis of variance, Tukey-Kramer procedure, critical value

182. Referring to Table 11-6, using an overall level of significance of 0.05, the critical range for the Tukey-
Kramer procedure is ________.

ANSWER:
4.27

183. True or False: Referring to Table 11-6, based on the Tukey-Kramer procedure with an overall level of
significance of 0.05, the retailer would decide that there is a significant difference between all pairs of mean
speeds.

ANSWER:

False
KEYWORDS: one-way analysis of variance, Tukey-Kramer procedure, decision, conclusion

significance of 0.05, the retailer would decide that there is no significant difference between any pair of mean
speeds.

ANSWER:
False

significance of 0.05, the retailer would decide that the mean speed for the Tornado brand is significantly
different from each of the mean speeds for other brands.

ANSWER:
True

significance of 0.05, the retailer would decide that the 3 means other than the mean for Tornado are not
significantly different from each other.

ANSWER:
True

187. Referring to Table 11-6, the sporting goods retailer decided to perform a Kruskal-Wallis test. The null
hypothesis of the test is ________.

ANSWER:
H
0
: M
1
= M
2
= M
3
= M
4

KEYWORDS: one-way analysis of variance, Kruskal-Wallis rank test, form of hypothesis

188. Referring to Table 11-6, the alternative hypothesis of the Kruskal-Wallis test is that ________.

ANSWER:
not all the medians are equal
KEYWORDS: one-way analysis of variance, Kruskal-Wallis rank test, form of hypothesis

189. Referring to Table 11-6, the decision rule for a level of significance of 0.05 using the Kruskal-Wallis
test is to reject the null hypothesis if the test statistic H is ________.

ANSWER:
greater than 7.815
KEYWORDS: one-way analysis of variance, Kruskal-Wallis rank test, critical value, decision


190. Referring to Table 11-6, the calculation of the Kruskal-Wallis test statistic H involves ranking the
observations. Construct a table containing these ranks.

ANSWER:
Barth Tornado Reiser Shaw
7.0 1.0 4.0 7.0
11.5 2.0 9.5 9.5
7.0 3.0 5.0 11.5
KEYWORDS: one-way analysis of variance, Kruskal-Wallis test, test statistic

191. Referring to Table 11-6, the calculation of the Kruskal-Wallis test statistic H involves obtaining the
total of the ranks for each sample. These totals are ________, ________, ________, and ________.

ANSWER:
25.5, 6.0, 18.5, 28.0
KEYWORDS: one-way analysis of variance, Kruskal-Wallis rank test, test statistic

192. Referring to Table 11-6, the calculated value of the Kruskal-Wallis test statistic H is ________.

ANSWER:
7.47
KEYWORDS: one-way analysis of variance, Kruskal-Wallis rank test, test statistic

TABLE 11-7

An agronomist wants to compare the crop yield of 3 varieties of chickpea seeds. She plants 15 fields, 5 with each
variety. She then measures the crop yield in bushels per acre. Treating this as a completely randomized design, the
results are presented in the table that follows.
Trial Smith Walsh Trevor
1 11.1 19.0 14.6
2 13.5 18.0 15.7
3 15.3 19.8 16.8
4 14.6 19.6 16.7
5 9.8 16.6 15.2

193. Referring to Table 11-7, the agronomist decided to perform an ANOVA F test. The amount of total
variation or SST is __________.

ANSWER:
114.82


ANSWER:
82.39

195. Referring to Table 11-7, the within group variation or SSW is __________.

ANSWER:
32.43

196. Referring to Table 11-7, the value of MSA is __________, while MSW is __________.

ANSWER:
41.19; 2.70

197. Referring to Table 11-7, the null hypothesis will be rejected at a level of significance of 0.01 if the
value of the test statistic is greater than __________.

ANSWER:
6.93
KEYWORDS: one-way analysis of variance, F test for factor, critical value


198. Referring to Table 11-7, the value of the test statistic is __________.

ANSWER:
15.24
KEYWORDS: one-way analysis of variance, F test for factor, test statistic

199. Referring to Table 11-7, construct the ANOVA table from the sample data.

ANSWER:
Source df SS MS F p
Seed Varieties 2 82.39 41.19 15.24 0.000508*
Error 12 32.43 2.70
Total 14 114.82
* or p < 0.005, tabular value
KEYWORDS: one-way analysis of variance, F test for factor, properties

200. Referring to Table 11-7, state the null hypothesis that can be tested.

ANSWER:
H
0
:
Smith
=
Walsh
=
Trevor

KEYWORDS: one-way analysis of variance, F test for factor, form of hypothesis

201. True or False: Referring to Table 11-7, the null hypothesis should be rejected at 0.005 level of
significance.

ANSWER:
True

202. True or False: Referring to Table 11-7, the decision made at 0.005 level of significance implies that all
3 means are significantly different.

ANSWER:
False
KEYWORDS: one-way analysis of variance, F test for factor, conclusion

203. True or False: Referring to Table 11-7, the test is valid only if the population of crop yields has the
same variance for the 3 varieties.

ANSWER:
True
KEYWORDS: one-way analysis of variance, F test for factor, assumption


204. True or False: Referring to Table 11-7, the test is valid only if the population of crop yields is normally
distributed for the 3 varieties.

ANSWER:
True
KEYWORDS: one-way analysis of variance, F test for factor, assumption

205. Referring to Table 11-7, the agronomist decided to compare the 3 treatment means by using the Tukey-
Kramer procedure with an overall level of significance of 0.01. There are ________ pairwise comparisons that
can be made.

ANSWER:
3
KEYWORDS: one-way analysis of variance, Tukey-Kramer procedure, properties

206. Referring to Table 11-7, using an overall level of significance of 0.01, the critical value of the
Studentized range Q used in calculating the critical range for the Tukey-Kramer procedure is ________.

ANSWER:
5.04

207. Referring to Table 11-7, using an overall level of significance of 0.01, the critical range for the Tukey-
Kramer procedure is ________.

ANSWER:
3.70

significance of 0.01, the agronomist would decide that there is a significant difference between the crop yield of
Smith and Walsh seeds.

ANSWER:
True

Smith and Trevor seeds.

ANSWER:
False
Walsh and Trevor seeds.


ANSWER:
False

TABLE 11-8

A hotel chain has identically sized resorts in 5 locations. The data that follow resulted from analyzing the hotel
occupancies on randomly selected days in the 5 locations.
ROW Caymen Pennkamp California Mayaguez Maui
1 28 40 21 37 22
2 33 35 21 47 19
3 41 33 27 45 25

Source df SS MS F p
Location 4 963.6 11.47 0.001
Error 10 210.0
Total

211. Referring to Table 11-8, the value of the element in the ANOVA table that always provides an estimate
of the population variance is ________.

ANSWER:
21.0

212. Referring to Table 11-8, the test ratio involves the ratio of 2 elements of the ANOVA table. Of these
elements, the value of the one that provides an estimate of the population variance only when the null
hypothesis is true is ________.

ANSWER:
240.9

213. True or False: Referring to Table 11-8, if a level of significance of 0.05 is chosen, the null hypothesis
should be rejected.

ANSWER:
True

214. True or False: Referring to Table 11-8, if a level of significance of 0.05 is chosen, the decision made
indicates that all 5 locations have different mean occupancy rates.

ANSWER:
False


215. True or False: Referring to Table 11-8, if a level of significance of 0.05 is chosen, the decision made
indicates that at least 2 of the 5 locations have different mean occupancy rates.

ANSWER:
True

216. Referring to Table 11-8, the among group variation or SSA is _________.

ANSWER:
963.6

217. Referring to Table 11-8, the within group variation or SSW is _________.

ANSWER:
210.0

218. Referring to Table 11-8, the total variation or SST is ________.

ANSWER:
1,173.6

219. Referring to Table 11-8, the value of MSA is ______ while MSW is _______.

ANSWER:
240.9; 21.0

220. Referring to Table 11-8, the numerator and denominator degrees of freedom of the test ratio are ________ and
________, respectively.

ANSWER:
4; 10
221. True or False: Referring to Table 11-8, the total mean squares is 261.90.

ANSWER:
False

TABLE 11-9

The marketing manager of a company producing a new cereal aimed for children wants to examine the effect of the
color and shape of the box's logo on the approval rating of the cereal. He combined 4 colors and 3 shapes to produce

a total of 12 designs. Each logo was presented to 2 different groups (a total of 24 groups) and the approval rating for
each was recorded and is shown below. The manager analyzed these data using the o = 0.05 level of significance
for all inferences.

COLORS
SHAPES Red Green Blue Yellow
Circle 54 67 36 45
44 61 44 41
Square 34 56 36 21
36 58 30 25
Diamond 46 60 34 31
48 60 38 33

Source df SS MS F p
Colors 3 2711.17 903.72 72.30 0.000
Shapes 2 579.00 289.50 23.16 0.000
Interaction 6 150.33 25.06 2.00 0.144
Error 12 150.00 12.50
Total 23 3590.50

222. Referring to Table 11-9, the mean square for the factor color is ________.

ANSWER:
903.72

223. Referring to Table 11-9, the mean square for the factor shape is ________.

ANSWER:
289.50


224. Referring to Table 11-9, the mean square for the interaction of color and shape is ________.

ANSWER:
25.06

225. Referring to Table 11-9, the mean square for error is ________.

ANSWER:
12.50

226. Referring to Table 11-9, the critical value of the test for significant differences between colors is ________.

ANSWER:
3.49
KEYWORDS: two-factor analysis of variance, F test for factor, critical value

227. Referring to Table 11-9, the value of the statistic used to test for significant differences between colors is
________.

ANSWER:
72.30
KEYWORDS: two-factor analysis of variance, F test for factor, test statistic

228. True or False: Referring to Table 11-9, based on the results of the hypothesis test, it appears that there is a
significant effect on the approval rating associated with the color of the logo.

ANSWER:
True

229. Referring to Table 11-9, the critical value in the test for significant differences between shapes is ________.

ANSWER:
3.89
KEYWORDS: two-factor analysis of variance, F test for factor, critical value


230. Referring to Table 11-9, the value of the statistic used to test for significant differences between shapes is
________.

ANSWER:
23.16
KEYWORDS: two-factor analysis of variance, F test for factor, test statistic

significant effect associated with the shape of the logo.

ANSWER:
True

232. Referring to Table 11-9, the critical value in the test for a significant interaction is ________.

ANSWER:
3.00
KEYWORDS: two-factor analysis of variance, F test for interaction, critical value

233. Referring to Table 11-9, the value of the statistic used to test for an interaction is ________.

ANSWER:
2.00
KEYWORDS: two-factor analysis of variance, F test for interaction, test statistic

significant interaction.

ANSWER:
False
KEYWORDS: two-factor analysis of variance, F test for interaction, decision, conclusion


TABLE 11-10

An agronomist wants to compare the crop yield of 3 varieties of chickpea seeds. She plants all 3 varieties of the
seeds on each of 5 different patches of fields. She then measures the crop yield in bushels per acre. Treating this as a
randomized block design, the results are presented in the table that follows:
Fields Smith Walsh Trevor
1 11.1 19.0 14.6
2 13.5 18.0 15.7
3 15.3 19.8 16.8
4 14.6 19.6 16.7
5 9.8 16.6 15.2

235. Referring to Table 11-10, the agronomist decided to perform a randomized block F test for the difference in
the means. The amount of total variation or SST is __________.

ANSWER:
114.82
KEYWORDS: randomized block design, sum of squares


ANSWER:
82.39

237. Referring to Table 11-10, the among block variation or SSBL is __________.

ANSWER:
24.46

238. Referring to Table 11-10, the value of MSA is __________, while MSBL is __________.

ANSWER:
41.19; 6.11
KEYWORDS: randomized block design, mean squares


239. Referring to Table 11-10, the null hypothesis for the randomized block F test for the difference in the means
is
a)
0 Field 1 Field 2 Field 3 Field 4 Field 5
: H

= = = =
b)
0 Smith Walsh Trevor
: H

= =
c)
: H M M M M M

= = = =
d)
: H M M M

= =

ANSWER:
b
KEYWORDS: randomized block design, F test for factor, form of hypothesis

240. Referring to Table 11-10, what are the degrees of freedom of the randomized block F test for the difference in
the means at a level of significance of 0.01?

ANSWER:
2 numerator and 8 denominator degrees of freedom
KEYWORDS: randomized block design, F test for factor, degrees of freedom

241. Referring to Table 11-10, what is the critical value of the randomized block F test for the difference in the
means at a level of significance of 0.01?

ANSWER:
8.65
KEYWORDS: randomized block design, F test for factor, critical value

242. Referring to Table 11-10, what is the value of the test statistic for the randomized block F test for the
difference in the means?

ANSWER:
41.32
KEYWORDS: randomized block design, F test for factor, test statistic

243. Referring to Table 11-10, what is the p-value of the test statistic for the randomized block F test for the
difference in the means?

ANSWER:
6.07E-05
KEYWORDS: randomized block design, F test for factor, p-value


244. True or False: Referring to Table 11-10, the null hypothesis for the randomized block F test for the difference
in the means should be rejected at a 0.01 level of significance.

ANSWER:
True
KEYWORDS: randomized block design, F test for factor, decision

245. True or False: Referring to Table 11-10, the decision made at a 0.01 level of significance on the randomized
block F test for the difference in means implies that all 3 means are significantly different.

ANSWER:
False
KEYWORDS: randomized block design, F test for factor, conclusion

246. True or False: Referring to Table 11-10, the randomized block F test is valid only if the population of crop
yields has the same variance for the 3 varieties.

ANSWER:
True
KEYWORDS: randomized block design, F test for factor, assumption

247. True or False: Referring to Table 11-10, the randomized block F test is valid only if the population of crop
yields is normally distributed for the 3 varieties.

ANSWER:
True

248. True or False: Referring to Table 11-10, the randomized block F test is valid only if there is no interaction
between the variety of seeds and the patches of fields.

ANSWER:
True

249. Referring to Table 11-10, the agronomist decided to compare the 3 treatment means by using the Tukey
multiple comparison procedure with an overall level of significance of 0.01. How many pairwise comparisons
can be made?

ANSWER:
3
KEYWORDS: randomized block design, Tukey procedure, properties

250. Referring to Table 11-10, using an overall level of significance of 0.01, what is the critical value of the
Studentized range Q used in calculating the critical range for the Tukey multiple comparison procedure?

ANSWER:
5.63

KEYWORDS: randomized block design, Tukey procedure, critical value

251. Referring to Table 11-10, using an overall level of significance of 0.01, what is the critical range for the
Tukey multiple comparison procedure?

ANSWER:
2.51
KEYWORDS: randomized block design, Tukey procedure, critical value

252. True or False: Referring to Table 11-10, based on the Tukey multiple comparison procedure with an overall
level of significance of 0.01, the agronomist would decide that there is a significant difference between the crop
yield of Smith and Walsh seeds.

ANSWER:
True
KEYWORDS: randomized block design, Tukey procedure, decision, conclusion

Smith and Trevor seeds.

ANSWER:
True

254. True or False: Referring to Table 11-10, based on the Tukey multiple comparison procedure with an overall
level of significance of 0.01, the agronomist would decide that there is a significant difference between the crop
yield of Walsh and Trevor seeds.

ANSWER:
True


255. Referring to Table 11-10, what is the null hypothesis for testing the block effects?
a)
: H

= = = =
b)
: H

= =
c)
: H M M M M M

= = = =
d)
: H M M M

= =

ANSWER:
a
KEYWORDS: randomized block design, F test for block effects, form of hypothesis

256. Referring to Table 11-10, what are the degrees of freedom of the F test statistic for testing the block effects?

ANSWER:
4 numerator and 8 denominator degrees of freedom
KEYWORDS: randomized block design, F test for block effects, degrees of freedom

257. Referring to Table 11-10, what is the value of the F test statistic for testing the block effects?

ANSWER:
6.13
KEYWORDS: randomized block design, F test for block effects, test statistic

258. Referring to Table 11-10, what is the critical value for testing the block effects at a 0.01 level of significance?

ANSWER:
7.01
KEYWORDS: randomized block design, F test for block effects, critical value

259. Referring to Table 11-10, what is the p-value of the F test statistic for testing the block effects?

ANSWER:
0.015 or between 0.01 and 0.025
KEYWORDS: randomized block design, F test for block effects, p-value

260. True or False: Referring to Table 11-10, the null hypothesis for the F test for the block effects should be
rejected at a 0.01 level of significance.

ANSWER:
False
KEYWORDS: randomized block design, F test for block effects, decision

261. True or False: Referring to Table 11-10, the decision made at a 0.01 level of significance on the F test for the
block effects implies that the blocking has been advantageous in reducing the experiment error.

ANSWER:
False

KEYWORDS: randomized block design, F test for block effects, conclusion

262. Referring to Table 11-10, what is the estimated relative efficiency?

ANSWER:
2.47
KEYWORDS: randomized block design, F test for block effects, relative efficiency

263. True or False: Referring to Table 11-10, the relative efficiency means that 2.47 times as many observations in
each variety group would be needed in a one-way ANOVA design, as compared to the randomized block design
in order to obtain the same precision for comparison of the variety means.

ANSWER:
True
KEYWORDS: randomized block design, F test for block effects, relative efficiency, interpretation

CHAPTER 12: TESTS FOR TWO OR MORE SAMPLES WITH
CATEGORICAL DATA

1. When testing for independence in a contingency table with 3 rows and 4 columns, there are ________ degrees
of freedom.
a) 5
b) 6
c) 7
d) 12

ANSWER:
b
KEYWORDS: chi-square test of independence, degrees of freedom

2. If we use the _
2
method of analysis to test for the differences among 4 proportions, the degrees of freedom are
equal to:
a) 3.
b) 4.
c) 5.
d) 1.

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions, degrees of freedom

3. If we wish to determine whether there is evidence that the proportion of successes is higher in group 1 than in
group 2, the appropriate test to use is
a) the Z test.
b) the _
2
test.

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions


4. If we wish to determine whether there is evidence that the proportion of successes is the same in group 1 as in
group 2, the appropriate test to use is
a) the Z test.
b) the _
2
test.

ANSWER:
c

5. In testing a hypothesis using the _
2
test, the theoretical frequencies are based on the
a) null hypothesis.
b) alternative hypothesis.
c) normal distribution.

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions, properties

TABLE 12-1

A study published in the American Journal of Public Health was conducted to determine whether the use of seat
belts in motor vehicles depends on ethnic status in San Diego County. A sample of 792 children treated for injuries
sustained from motor vehicle accidents was obtained, and each child was classified according to (1) ethnic status
(Hispanic or non-Hispanic) and (2) seat belt usage (worn or not worn) during the accident. The number of children
in each category is given in the table below.

Hispanic Non-Hispanic
Seat belts worn 31 148
Seat belts not worn 283 330

6. Referring to Table 12-1, which test would be used to properly analyze the data in this experiment?
a) test for independence.
b) test for difference between proportions.
c) ANOVA F test for interaction in a 2 x 2 factorial design.
d) test for goodness of fit.

ANSWER:
a
KEYWORDS: chi-square test of independence


7. Referring to Table 12-1, the calculated test statistic is
a) -0.9991.
b) -0.1368.
c) 48.1849.
d) 72.8063.

ANSWER:
c
KEYWORDS: chi-square test of independence, test statistic

8. Referring to Table 12-1, at 5% level of significance, the critical value of the test statistic is
a) 3.8415.
b) 5.9914.
c) 9.4877.
d) 13.2767.

ANSWER:
a
KEYWORDS: chi-square test of independence, critical value

9. Referring to Table 12-1, at 5% level of significance, there is sufficient evidence to conclude that the
a) use of seat belts in motor vehicles is related to ethnic status in San Diego County.
b) use of seat belts in motor vehicles depends on ethnic status in San Diego County.
c) use of seat belts in motor vehicles is associated with ethnic status in San Diego County.
d) all of the above

ANSWER:
d
KEYWORDS: chi-square test of independence, decision, conclusion


TABLE 12-2

Many companies use well-known celebrities as spokespersons in their TV advertisements. A study was conducted
to determine whether brand awareness of female TV viewers and the gender of the spokesperson are independent.
Each in a sample of 300 female TV viewers was asked to identify a product advertised by a celebrity spokesperson.
The gender of the spokesperson and whether or not the viewer could identify the product was recorded. The
numbers in each category are given below.

Male Celebrity Female Celebrity
Identified product 41 61
Could not identify 109 89

a) test for independence.
b) test for difference between proportions.
c) ANOVA F test for main treatment effect.
d) test for goodness of fit.

ANSWER:
a

11. Referring to Table 12-2, the calculated test statistic is
a) -0.1006.
b) 0.00.
c) 5.9418.
d) 6.1194.
ANSWER:
c

12. Referring to Table 12-2, at 5% level of significance, the critical value of the test statistic is
a) 3.8415.
b) 5.9914.
c) 9.4877.
d) 13.2767.

ANSWER:
a


13. Referring to Table 12-2, the degrees of freedom of the test statistic are
a) 1.
b) 2.
c) 4.
d) 299.

ANSWER:
a

14. Referring to Table 12-2, at 5% level of significance, the conclusion is that
a) brand awareness of female TV viewers and the gender of the spokesperson are independent.
b) brand awareness of female TV viewers and the gender of the spokesperson are not independent.
c) brand awareness of female TV viewers and the gender of the spokesperson are related.
d) both (b) and (c)

ANSWER:
d

TABLE 12-3

A computer used by a 24-hour banking service is supposed to randomly assign each transaction to one of 5 memory
locations. A check at the end of a days transactions gave the counts shown in the table to each of the 5 memory
locations, along with the number of reported errors.

Memory Location: 1 2 3 4 5
Number of Transactions: 82 100 74 92 102
Number of Reported Errors: 11 12 6 9 10

The bank manager wanted to test whether the proportion of errors in transactions assigned to each of the 5 memory
locations differ.

a) test for independence
b) test for difference between proportions
c) ANOVA F test for main treatment effect
d) test for goodness of fit

ANSWER:
b

16. Referring to Table 12-3, the degrees of freedom of the test statistic is
a) 4.
b) 8.
c) 10.
d) 448.

ANSWER:
a

17. Referring to Table 12-3, the critical value of the test statistic at 1% level of significance is
a) 7.7794.
b) 13.2767.
c) 20.0902.
d) 23.2093.

ANSWER:
b
KEYWORDS: chi-square test for difference in proportions, critical value

18. Referring to Table 12-3, the calculated value of the test statistic is
a) -0.1777.
b) -0.0185.
c) 1.4999.
d) 1.5190.

ANSWER:
c
KEYWORDS: chi-square test for difference in proportions, test statistic

19. Referring to Table 12-3, at 1% level of significance
a) there is sufficient evidence to conclude that the proportions of errors in transactions assigned to each of
the 5 memory locations are all different.
b) there is insufficient evidence to conclude that the proportions of errors in transactions assigned to each
of the 5 memory locations are all different.
c) there is sufficient evidence to conclude that the proportion of errors in transactions assigned to each of
the 5 memory locations are not all the same.
d) there is insufficient evidence to conclude that the proportion of errors in transactions assigned to each of
the 5 memory locations are not all the same.

ANSWER:
d
KEYWORDS: chi-square test for difference in proportions, decision, conclusion


20. Moving companies are required by the government to publish a Carrier Performance Report each year. One of
the descriptive statistics they must include is the annual percentage of shipments on which a $50 or greater
claim for loss or damage was filed. Suppose two companies, Econo-Move and On-the-Move, each decide to
estimate this figure by sampling their records, and they report the data shown in the following table.

Econo-Move On-the-Move

Total shipments sampled 900 750
Number of shipments with a claim > $50 162 60

The owner of On-the-Move is hoping to use these data to show that the company is superior to Econo-Move
with regard to the percentage of claims filed. Which test would be used to properly analyze the data in this
experiment?
a) test for independence
b) test for goodness of fit
d) test for the difference between proportions

ANSWER:
d
KEYWORDS: Z test for difference in two proportions

21. The Wall Street Journal recently ran an article indicating differences in the perception of sexual harassment on
the job between men and women. The article claimed that women perceived the problem to be much more
prevalent than did men. One question asked to both men and women was: Do you think sexual harassment is a
major problem in the American workplace? Some 24% of the men, compared to 62% of the women, responded
Yes. Assuming W designates womens responses and M designates mens, what hypothesis should The Wall
Street Journal test in order to show that its claim is true?
a) H
0
: p
W
p
M
> 0 versus H
1
: p
W
p
M
< 0
b) H
0
: p
W
p
M
s 0 versus H
1
: p
W
p
M
> 0
c) H
0
: p
W
p
M
= 0 versus H
1
: p
W
p
M
= 0
d) H
0
:
W

M
s 0 versus H
1
:
W

M
> 0

ANSWER:
b
KEYWORDS: Z test for difference in two proportions, form of hypothesis


22. The Wall Street Journal recently ran an article indicating differences in perception of sexual harassment on the
job between men and women. The article claimed that women perceived the problem to be much more prevalent
than did men. One question asked to both men and women was: Do you think sexual harassment is a major
problem in the American workplace? Some 24% of the men, compared to 62% of the women, responded
Yes. Suppose that 150 women and 200 men were interviewed. For a 0.01 level of significance, what is the
critical value for the rejection region?
a) 7.173
b) 7.106
c) 6.635
d) 2.33

ANSWER:
d
KEYWORDS: Z test for difference in two proportions, critical value

Yes. Suppose that 150 women and 200 men were interviewed. What is the value of the test statistic?
a) 7.173
b) 7.106
c) 6.635
d) 2.33

ANSWER:
a
KEYWORDS: Z test for difference in two proportions, test statistic

Yes. Suppose that 150 women and 200 men were interviewed. What conclusion should be reached?
a) Using a 0.01 level of significance, there is sufficient evidence to conclude that women perceive the
problem of sexual harassment on the job as being much more prevalent than do men.
b) There is insufficient evidence to conclude with at least 99% confidence that women perceive the
problem of sexual harassment on the job as being much more prevalent than do men.
c) There is no evidence of a significant difference between the men and women in their perception.
d) More information is needed to draw any conclusions from the data set.

ANSWER:
a
KEYWORDS: Z test for difference in two proportions, decision, conclusion

25. A powerful womens group has claimed that men and women differ in attitudes about sexual discrimination. A
group of 50 men (group 1) and 40 women (group 2) were asked if they thought sexual discrimination is a
problem in the United States. Of those sampled, 11 of the men and 19 of the women did believe that sexual
discrimination is a problem. Which of the following are the appropriate null and alternative hypotheses to test
the groups claim?
a) H
0
: p
W
p
M
> 0 versus H
1
: p
W
p
M
< 0
b) H
0
: p
W
p
M
s 0 versus H
1
: p
W
p
M
> 0
c) H
0
: p
W
p
M
= 0 versus H
1
: p
W
p
M
= 0
d) H
0
:
W

M
s 0 versus H
1
:
W

M
> 0

ANSWER:
c

discrimination is a problem. Find the value of the test statistic.
a) Z = 2.55
b) Z = 0.85
c) Z = 1.05
d) Z = 1.20

ANSWER:
a

discrimination is a problem. If the p value turns out to be 0.035 (which is NOT the real value in this data set),
then
a) at o = 0.05, we should fail to reject H
0
.
b) at o = 0.04, we should reject H
0
.
c) at o = 0.03, we should reject H
0
.
d) None of the above would be correct statements.

ANSWER:
b

TABLE 12-4

A few years ago, Pepsi invited consumers to take the Pepsi Challenge. Consumers were asked to decide which of
two sodas, Coke or Pepsi, they preferred in a blind taste test. Pepsi was interested in determining what factors
played a role in peoples taste preferences. One of the factors studied was the gender of the consumer. Below are the
results of analyses comparing the taste preferences of men and women, with the proportions depicting preference for
Pepsi.

Males: n = 109, p
SM
= 0.422018 Females: n = 52, p
SF
= 0.25
p
SM
p
SF
= 0.172018 Z = 2.11825

28. Referring to Table 12-4, to determine if a difference exists in the taste preferences of men and women, give the
correct alternative hypothesis that Pepsi would test.
a) H
1
:
M

F
= 0
b) H
1
:
M

F
> 0
c) H
1
: p
M
p
F
= 0
d) H
1
: p
M
p
F
= 0

ANSWER:
c

29. Referring to Table 12-4, suppose Pepsi wanted to test to determine if the males preferred Pepsi more than the
females. Using the test statistic given, compute the appropriate p-value for the test.
a) 0.0171
b) 0.0340
c) 0.2119
d) 0.4681

ANSWER:
a
KEYWORDS: Z test for difference in two proportions, p-value

30. Referring to Table 12-4, suppose Pepsi wanted to test to determine if the males preferred Pepsi less than the
females. Using the test statistic given, compute the appropriate p-value for the test.
a) 0.0170
b) 0.0340
c) 0.9660
d) 0.9830

ANSWER:
d

31. Referring to Table 12-4, suppose that the two-tailed p-value was really 0.0734. State the proper conclusion.
a) At o = 0.05, there is sufficient evidence to indicate the proportion of males preferring Pepsi differs
from the proportion of females preferring Pepsi.
b) At o = 0.10, there is sufficient evidence to indicate the proportion of males preferring Pepsi differs
c) At o = 0.05, there is sufficient evidence to indicate the proportion of males preferring Pepsi equals the
proportion of females preferring Pepsi.
d) At o = 0.08, there is insufficient evidence to indicate the proportion of males preferring Pepsi differs

ANSWER:
b


TABLE 12-5

The following Excel output contains the results of a test to determine if the proportions of satisfied guests at two
resorts are the same or different.

Hypothesized Difference 0
Level of Significance 0.05
Group 1
Number of Successes 163
Sample Size 227
Group 2
Number of Successes 154
Sample Size 262
Group 1 Proportion 0.718061674
Group 2 Proportion 0.58778626
Difference in Two Proportions 0.130275414
Average Proportion 0.648261759
Test Statistic 3.00875353
Two-Tailed Test
Lower Critical Value -1.959961082
Upper Critical Value 1.959961082
p-Value 0.002623357

32. Referring to Table 12-5, allowing for 0.75% probability of committing a Type I error, what are the decision and
conclusion on testing whether there is any difference in the proportions of satisfied guests in the two resorts?
e. Do not reject the null hypothesis; there is enough evidence to conclude that there is significant
difference in the proportions of satisfied guests at the two resorts.
f. Do not reject the null hypothesis; there is not enough evidence to conclude that there is significant
difference in the proportions of satisfied guests at the two resorts.
g. Reject the null hypothesis; there is enough evidence to conclude that there is significant difference in
the proportions of satisfied guests at the two resorts.
h. Reject the null hypothesis; there is not enough evidence to conclude that there is significant difference
in the proportions of satisfied guests at the two resorts.

ANSWER:
c


33. Referring to Table 12-5, if you want to test the claim that "Resort 1 (Group 1) has a higher proportion of
satisfied guests than Resort 2 (Group 2)," the p-value of the test will be
a) 0.00262.
b) 0.00262/2.
c) 2*(0.00262).
d) 1-(0.00262/2).

ANSWER:
b

34. Referring to Table 12-5, if you want to test the claim that "Resort 1 (Group 1) has a lower proportion of
satisfied guests than Resort 2 (Group 2)," you will use
a) a t test for the difference in two proportions.
b) a Z test for the difference in two proportions.
c) a
2
_ test for the difference in two proportions.
d) a
2
_ test for independence.

ANSWER:
b
KEYWORDS: Z test for difference in two proportions

TABLE 12-6

One criterion used to evaluate employees in the assembly section of a large factory is the number of defective pieces
per 1,000 parts produced. The quality control department wants to find out whether there is a relationship between
years of experience and defect rate. Since the job is repetitious, after the initial training period, any improvement
due to a learning effect might be offset by a loss of motivation. A defect rate is calculated for each worker in a
yearly evaluation. The results for 100 workers are given in the table below.

Years Since Training Period
< 1 Year 1 4 Years 5 9 Years
High 6 9 9
Defect Rate: Average 9 19 23
Low 7 8 10


35. Referring to Table 12-6, which test would be used to properly analyze the data in this experiment to determine
whether there is a relationship between defect rate and years of experience?
a) _
2
test for independence in a two-way contingency table
b) _
2
test for equal proportions in a one-way table
d) Z test for the difference in two proportions

ANSWER:
a

36. Referring to Table 12-6, find the rejection region necessary for testing at the 0.05 level of significance whether
there is a relationship between defect rate and years of experience.
a) Reject H
0
if _
2
> 16.919.
b) Reject H
0
if _
2
> 15.507.
c) Reject H
0
if _
2
> 11.143.
d) Reject H
0
if _
2
> 9.488.

ANSWER:
d

37. Referring to Table 12-6, what is the expected number of employees with less than 1 year of training time and a
high defect rate?
a) 4.17
b) 4.60
c) 5.28
d) 9.17

ANSWER:
c
KEYWORDS: chi-square test of independence, contingency table, properties

38. Referring to Table 12-6, what is the expected number of employees with 1 to 4 years of training time and a high
defect rate?
a) 12.00
b) 8.64
c) 6.67
d) 6.00

ANSWER:
b

39. Referring to Table 12-6, of the cell for 1 to 4 years of training time and a high defect rate, what is the
contribution to the overall _
2
statistic for the independence test?
a) 0.36
b) 0.1296

c) 0.015
d) 0.0144

ANSWER:
c

40. Referring to Table 12-6, a test was conducted to determine if a relationship exists between defect rate and years
of experience. Which of the following p-values would indicate that defect rate and years of experience are
dependent? Assume you are testing at o = 0.05.
a) 0.045
b) 0.055
c) 0.074
d) 0.080

ANSWER:
a
KEYWORDS: chi-square test of independence, p-value, decision

TABLE 12-7

A corporation randomly selects 150 salespeople and finds that 66% who have never taken a self-improvement
course would like to take such a course. The firm did a similar study 10 years ago in which 60% of a random sample
of 160 salespeople wanted to take a self-improvement course. The groups are assumed to be independent random
samples. Let p
1
and p
2
represent the true proportion of workers who would like to attend a self-improvement course
in the recent study and the past study, respectively.

41. Referring to Table 12-7, if the firm wanted to test whether this proportion has changed from the previous study,
which represents the relevant hypotheses?
a) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0
b) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0
c) H
0
: p
1
p
2
s 0 versus H
1
: p
1
p
2
> 0
d) H
0
: p
1
p
2
> 0 versus H
1
: p
1
p
2
< 0

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions


42. Referring to Table 12-7, if the firm wanted to test whether a greater proportion of workers would currently like
to attend a self-improvement course than in the past, which represents the relevant hypotheses?
a) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0
b) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0
c) H
0
: p
1
p
2
s 0 versus H
1
: p
1
p
2
> 0
d) H
0
: p
1
p
2
> 0 versus H
1
: p
1
p
2
< 0

ANSWER:
c

43. Referring to Table 12-7, what is the unbiased point estimate for the difference between the two population
proportions?
a) 0.06
b) 0.10
c) 0.15
d) 0.22

ANSWER:
a
KEYWORDS: point estimate

44. Referring to Table 12-7, what is/are the critical value(s) when performing a Z test on whether population
proportions are different if o = 0.05?
a) 1.645
b) 1.96
c) -1.96
d) 2.08

ANSWER:
b

45. Referring to Table 12-7, what is/are the critical value(s) when testing whether population proportions are
different if o = 0.10?
a) 1.645
b) 1.96
c) -1.96
d) 2.08

ANSWER:
a

46. Referring to Table 12-7, what is/are the critical value(s) when testing whether the current population proportion
is higher than before if o = 0.05?
a) 1.645
b) + 1.645
c) 1.96
d) + 1.96

ANSWER:
b

47. Referring to Table 12-7, what is the estimated standard error of the difference between the two sample
proportions?
a) 0.629
b) 0.500
c) 0.055
d) 0

ANSWER:
c
KEYWORDS: Z test for difference in two proportions, standard error

48. Referring to Table 12-7, what is the value of the test statistic to use in evaluating the alternative hypothesis that
there is a difference in the two population proportions?
a) 4.335
b) 1.96
c) 1.093
d) 0

ANSWER:
c
KEYWORDS: Z test for difference in two proportions, chi-square test for difference in proportions, test statistic


49. Referring to Table 12-7, the company tests at the 0.05 level to determine whether the population proportion has
changed from the previous study. Which of the following is most correct?
a) Reject the null hypothesis and conclude that the proportion of employees who are interested in a self-
improvement course has changed over the intervening 10 years.
b) Do not reject the null hypothesis and conclude that the proportion of employees who are interested in a
self-improvement course has not changed over the intervening 10 years.
c) Reject the null hypothesis and conclude that the proportion of employees who are interested in a self-
improvement course has increased over the intervening 10 years.
d) Do not reject the null hypothesis and conclude that the proportion of employees who are interested in a
self-improvement course has increased over the intervening 10 years.

ANSWER:
b
KEYWORDS: Z test for difference in two proportions, chi-square test for difference in proportions, decision,
conclusion

50. True or False: In testing the difference between two proportions, we may use either a one-tailed chi-square test
or two-tailed Z test.

ANSWER:
True
KEYWORDS: Z test for difference in two proportions, chi-square test for difference in proportions

51. True or False: The squared difference between the observed and theoretical frequencies should be large if there
is no significant difference between the proportions.

ANSWER:
False

52. True or False: A test for the difference between two proportions can be performed using the chi-square
distribution.

ANSWER:
True

53. True or False: A test for whether one proportion is higher than the other can be performed using the chi-square
distribution.

ANSWER:
False

54. True or False: When using the _
2
tests for independence, one should be aware that expected frequencies that
are too small will lead to too big a Type I error.

ANSWER:

True
KEYWORDS: chi-square test of independence, properties, assumption

55. True or False: If we use the chi-square method of analysis to test for the difference between proportions, we
must assume that there are at least 5 observed frequencies in each cell of the contingency table.

ANSWER:
False
KEYWORDS: chi-square test of independence, properties, assumption

56. If we wish to determine whether there is evidence that the proportion of successes is higher in Group 1 than in
Group 2, and the test statistic for Z = +2.07, the p-value is equal to ______.

ANSWER:
0.0192

TABLE 12-8

The dean of a college is interested in the proportion of graduates from his college who have a job offer on
graduation day. He is particularly interested in seeing if there is a difference in this proportion for accounting and
economics majors. In a random sample of 100 of each type of major at graduation, he found that 65 accounting
majors and 52 economics majors had job offers. If the accounting majors are designated as Group 1 and the
economics majors are designated as Group 2, perform the appropriate hypothesis test using a level of significance
of 0.05.

57. Referring to Table 12-8, the hypotheses the dean should use are:
a) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0.
b) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0.
c) H
0
: p
1
p
2
s 0 versus H
1
: p
1
p
2
> 0.
d) H
0
: p
1
p
2
> 0 versus H
1
: p
1
p
2
< 0.

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions, form of
hypothesis


58. Referring to Table 12-8, the null hypothesis will be rejected if the test statistic is ________.

ANSWER:
Z > 1.96 or < -1.96 or
2
> 3.841
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions, critical value

59. Referring to Table 12-8, the value of the test statistic is ________.

ANSWER:
Z = 1.866 or
2
= 3.4806
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions, test statistic


ANSWER:
0.0621
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions, p-value


ANSWER:
False
KEYWORDS: chi-square test for difference in proportions, Z test for difference in two proportions, decision

62. True or False: Referring to Table 12-8, the same decision would be made with this test if the level of
significance had been 0.01 rather than 0.05.

ANSWER:
True


ANSWER:
False

TABLE 12-9

A quality control engineer is in charge of the manufacture of computer disks. Two different processes can be used to
manufacture the disks. He suspects that the Kohler method produces a greater proportion of defects than the Russell
method. He samples 150 of the Kohler and 200 of the Russell disks and finds that 27 and 18 of them, respectively,
are defective. If Kohler is designated as Group 1 and Russell is designated as Group 2, perform the appropriate
test at a level of significance of 0.01.

64. Referring to Table 12-9, the hypotheses that should be tested are:
a) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
0.

b) H
0
: p
1
p
2
= 0 versus H
1
: p
1
p
2
= 0.
c) H
0
: p
1
p
2
s 0 versus H
1
: p
1
p
2
> 0.
d) H
0
: p
1
p
2
> 0 versus H
1
: p
1
p
2
< 0.

ANSWER:
c

65. Referring to Table 12-9, the null hypothesis will be rejected if the test statistic is ________.

ANSWER:
Z > 2.33

66. Referring to Table 12-9, the value of the test statistic is ________.

ANSWER:
2.49


ANSWER:
0.0064


ANSWER:
True
KEYWORDS: Z test for difference in two proportions, decision



ANSWER:
True

70. True or False: Referring to Table 12-9, the same decision would be made if this had been a two-tailed test at a

ANSWER:
False

TABLE 12-10

The director of transportation of a large company is interested in the usage of her van pool. She considers her routes
to be divided into local and non-local. She is particularly interested in learning if there is a difference in the
proportion of males and females who use the local routes. She takes a sample of a day's riders and finds the
following:

Male Female Total
Local 27 44 71
Non-Local 33 25 58
Total 60 69 129

She will use this information to perform a chi-square hypothesis test using a level of significance of 0.05.

71. Referring to Table 12-10, the test will involve _________ degree(s) of freedom.

ANSWER:
1

72. Referring to Table 12-10, the overall or average proportion of local riders is __________.

ANSWER:
0.550


73. Referring to Table 12-10, the expected cell frequency in the Male/Local cell is __________.

ANSWER:
33.02
KEYWORDS: chi-square test for difference in proportions, contingency table, properties

74. Referring to Table 12-10, the expected cell frequency in the Female/Non-Local cell is __________.

ANSWER:
31.02

75. Referring to Table 12-10, the critical value of the test is _________.

ANSWER:
3.841

76. Referring to Table 12-10, the value of the test statistic is _________.

ANSWER:
4.568

77. True or False: Referring to Table 12-10, the null hypothesis will be rejected.

ANSWER:
True
KEYWORDS: chi-square test for difference in proportions, decision

78. True or False: Referring to Table 12-10, the decision made suggests that there is a difference between the
proportion of males and females who ride local versus non-local routes.

ANSWER:
True
TYPE: TF DIFFICULTY: Median
KEYWORDS: chi-square test for difference in proportions, conclusion


TABLE 12-11

Four surgical procedures are currently used to install pacemakers. If the patient does not need to return for follow-up
surgery, the operation is called a "clear" operation. A heart center wants to compare the proportion of clear
operations for the 4 procedures, and collects the following numbers of patients from their own records:

Procedure
A B C D Total
Clear 27 41 21 7 96
Return 11 15 9 11 46
Total 38 56 30 18 142

They will use this information to test for a difference among the proportion of clear operations using a chi-square
test with a level of significance of 0.05.

79. Referring to Table 12-11, the test will involve _________ degrees of freedom.

ANSWER:
3

80. Referring to Table 12-11, the overall or average proportion of clear operations is __________.

ANSWER:
0.676

81. Referring to Table 12-11, the expected cell frequency for the Procedure A/Clear cell is __________.

ANSWER:
25.69

82. Referring to Table 12-11, the expected cell frequency for the Procedure D/Return cell is __________.

ANSWER:
5.83


83. Referring to Table 12-11, the critical value of the test is ________.

ANSWER:
7.815


ANSWER:
7.867


ANSWER:
True

86. True or False: Referring to Table 12-11, the decision made suggests that the 4 procedures all have different
proportions of clear operations.

ANSWER:
False
87. True or False: Referring to Table 12-11, the decision made suggests that the 4 procedures do not all have the
same proportion of clear operations.

ANSWER:
True

TABLE 12-12

The director of admissions at a state college is interested in seeing if admissions status (admitted, waiting list,
denied admission) at his college is independent of the type of community in which an applicant resides. He takes a
sample of recent admissions decisions and forms the following table:

Admitted Wait List Denied Total
Urban 45 21 17 83
Rural 33 13 24 70
Suburban 34 12 39 85
Total 112 46 80 238

He will use this table to do a chi-square test of independence with a level of significance of 0.01.

88. Referring to Table 12-12, the test will involve _________ degrees of freedom.

ANSWER:

4

89. Referring to Table 12-12, the critical value of the test is _________.

ANSWER:
13.277

90. Referring to Table 12-12, the expected cell frequency for the Admitted/Urban cell is _________.

ANSWER:
39.06


ANSWER:
12.624


ANSWER:
False
KEYWORDS: chi-square test of independence, decision

93. True or False: Referring to Table 12-12, the p-value of this test is greater than 0.01.

ANSWER:
True
KEYWORDS: chi-square test of independence, p-value

94. True or False: Referring to Table 12-12, the decision made suggests that admissions status at the college is
independent of the type of community in which an applicant resides.

ANSWER:
True
KEYWORDS: chi-square test of independence, conclusion

significance had been 0.005.

ANSWER:
True

significance had been 0.05.

ANSWER:
False

97. True or False: Referring to Table 12-12, the null hypothesis claims that "there is no association between
admission status at the college and the type of community in which an applicant resides."

ANSWER:
True
KEYWORDS: chi-square test of independence, form of hypothesis, conclusion

98. True or False: Referring to Table 12-12, the alternative hypothesis claims that "there is some connection
between admission status at the college and the type of community in which an applicant resides."

ANSWER:
True
KEYWORDS: chi-square test of independence, form of hypothesis, conclusion

99. True or False: The chi-square test of independence requires that the number of expected frequency in each cell
to be at least 5.

ANSWER:
False
KEYWORDS: chi-square test of independence, assumption

100. True or False: The chi-square test of independence requires that the number of expected frequency in each cell
to be at least 1.

ANSWER:
True
KEYWORDS: chi-square test of independence, assumption


TABLE 12-13

Parents complain that children read too few story books and watch too much television nowadays. A survey of
1,000 children reveals the following information on average time spent watching TV and average time spent reading
story books:

Average time spent reading story books
Average time
spent watching
TV
Less than 1 hour Between 1 and 2
hours
More than 2 hours
Less than 2 hours 90 85 130
More than 2 hours 655 32 8

101. Referring to Table 12-13, how many children in the survey spent less than 2 hours watching TV and more
than 2 hours reading story books, on average?
a) 8
b) 130
c) 175
d) 687

ANSWER:
b
KEYWORDS: contingency table, properties

102. Referring to Table 12-13, how many children in the survey spent less than 2 hours watching TV and no more
than 2 hours reading story books, on average?
a) 8
b) 130
c) 175
d) 687

ANSWER:
c
KEYWORDS: contingency table, properties

103. Referring to Table 12-13, if the null hypothesis of no connection between time spent watching TV and time
spent reading story books is true, how many children watching less than 2 hours of TV and reading no more
than 2 hours of story books, on average, can we expect?
a) 35.69
b) 227.23
c) 262.91
d) 969.75

ANSWER:
c

104. Referring to Table 12-13, if the null hypothesis of no connection between time spent watching TV and time
spent reading story books is true, how many children watching less than 2 hours of TV and reading more than 2
hours of story books, on average, can we expect?

a) 42.09
b) 155.25
c) 262.92
d) 987.75

ANSWER:
a

105. Referring to Table 12-13, to test whether there is any relationship between average time spent watching TV
and average time spent reading story books, the value of the measured test statistic is
a) -12.59.
b) 1.61.
c) 481.49.
d) 1,368.06.

ANSWER:
c

106. Referring to Table 12-13, suppose we want to constrain the probability of committing a Type I error to 5%
when testing whether there is any relationship between average time spent watching TV and average time spent
reading story books. The critical value will be
a) 5.991.
b) 7.378.
c) 12.592.
d) 14.449.

ANSWER:
a


107. Referring to Table 12-13, we want to test whether there is any relationship between average time spent
watching TV and average time spent reading story books. Suppose the value of the test statistic was 164 (which
is not the correct answer) and the critical value was 19.00 (which is not the correct answer), then we could
conclude that
a) there is a connection between time spent reading story books and time spent watching TV.
b) there is no connection between time spent reading story books and time spent watching TV.
c) more time spent reading story books leads to less time spent watching TV.
d) more time spent watching TV leads to less time spent reading story books.

ANSWER:
a

TABLE 12-14

Recent studies have found that American children are more obese than in the past. The amount of time children
spend watching television has received much of the blame. A survey of 100 ten-year-olds revealed the following
with regards to weights and average number of hours a day spent watching television. We are interested in testing
whether the average number of hours spent watching TV and weights are independent at 1% level of significance.

Weights
TV Hours
Total
0-3 3-6 6+
More than 10 lbs. overweight 1 9 20 30
Within 10 lbs. of normal weight 20 15 15 50
More than 10 lbs. underweight 10 5 5 20
Total 31 29 40 100

108. Referring to Table 12-14, if there is no connection between weights and average number of hours spent
watching TV, we should expect how many children to be spending 3-6 hours, on average, watching TV and are
more than 10 lbs. underweight?
a) 5
b) 5.8
c) 6.2
d) 8

ANSWER:
b


109. Referring to Table 12-14, if there is no connection between weights and average number of hours spent
watching TV, we should expect how many children to be spending no more than 6 hours, on average, watching
TV and are more than 10 lbs. underweight?
a) 5.8
b) 6.2
c) 8
d) 12

ANSWER:
d

110. Referring to Table 12-14, how many children in the survey spend more than 6 hours watching TV and are
more than 10 lbs. overweight?
a) 1
b) 9
c) 20
d) 40

ANSWER:
c

111. Referring to Table 12-14, how many children in the survey spend no more than 6 hours watching TV and are
more than 10 lbs. underweight?
a) 5
b) 10
c) 15
d) 20

ANSWER:
c

112. Referring to Table 12-14, the value of the test statistic is
a) 8.532.
b) 15.483.
c) 18.889.
d) 69.744.

ANSWER:
c


113. Referring to Table 12-14, the critical value of the test will be
a) 6.635.
b) 13.277.
c) 14.860.
d) 21.666.

ANSWER:
b

114. Referring to Table 12-14, suppose the value of the test statistic was 30.00 (which is not the correct value) and
the critical value at 1% level of significance was 10.00 (which is not the correct value), which of the following
conclusions would be correct?
a) We will accept the null and conclude that the average number of hours spent watching TV and weights
are independent.
b) We will reject the null and conclude that the average number of hours spent watching TV and weights
are independent.
c) We will accept the null and conclude that the average number of hours spent watching TV and weights
are not independent.
d) We will reject the null and conclude that the average number of hours spent watching TV and weights
are not independent.

ANSWER:
d

115. Referring to Table 12-14, which of the following statements is correct?
a) We can accept the null for any level of significance greater than 0.005
b) We can reject the null for any level of significance greater than 0.005.
c) We can accept the null for any level of significance smaller than 0.005
d) We can reject the null for any level of significance smaller than 0.005.

ANSWER:
b

116. Referring to Table 12-14, the degrees of freedom of the test statistic are
a) 1.
b) 2.
c) 4.
d) 9.

ANSWER:
c

117. True or False: Referring to Table 12-14, the test is always a one-tailed test.

ANSWER:
True

KEYWORDS: chi-square test of independence, properties

Table 12-15

According to an article in Marketing News, fewer checks are being written at grocery store checkout stands than in
the past. To determine whether there is a difference in the proportion of shoppers who paid by check over three
consecutive years at a 0.05 level of significance, the results of a survey of 500 shoppers during three consecutive
years are obtained and presented below.

Year
Check Written Year 1 Year 2 Year 3
Yes 225 175 125
No 275 325 375

118. Referring to Table 12-15, what is the expected number of shoppers who paid by check in year 1 if there was
no difference in the proportion of shoppers who paid by check over the three years?

ANSWER:
175

119. Referring to Table 12-15, what is the expected number of shoppers who did not pay by check in year 3 if there
was no difference in the proportion of shoppers who paid by check over the three years?

ANSWER:
325

120. Referring to Table 12-15, what is the form of the null hypothesis?
a)
0 1 2 3
: H p p p = =
b)
0 1 2 3
: H p p p = =
c)
0 1 2 3
: H p p p = =
d)
0 1 2 3
: H p p p = =

ANSWER:
a
KEYWORDS: chi-square test for difference in proportions, forms of hypothesis


121. Referring to Table 12-15, what is the form of the alternative hypothesis?
a)
1 1 2 3
: H p p p = =
b)
1 1 2 3
: H p p p = =
c)
1 1 2 3
: H p p p = =
d)
1
: H not all
j
p are the same

ANSWER:
d
KEYWORDS: chi-square test for difference in proportions, forms of hypothesis

122. True or False: Referring to Table 12-15, the assumptions needed to perform the test are satisfied.

ANSWER:
True
KEYWORDS: chi-square test for difference in proportions, assumption

123. Referring to Table 12-15, what are the degrees of freedom of the test statistic?

ANSWER:
2


ANSWER:
43.96

125. Referring to Table 12-15, what is the critical value?

ANSWER:
5.99

126. Referring to Table 12-15, what is the p-value of the test statistic?

ANSWER:
2.9E-10 or smaller than 0.005
KEYWORDS: chi-square test for difference in proportions, p-value


127. True or False: Referring to Table 12-15, the null hypothesis cannot be rejected.

ANSWER:
False

128. Referring to Table 12-15, what is the correct conclusion?
a) There is enough evidence that the proportions are all different in the 3 years.
b) There is not enough evidence that the proportions are all different in the 3 years.
c) There is enough evidence that at least two of the proportions are not equal.
d) There is not enough evidence that at least two of the proportions are not equal.

ANSWER:
c

129. Referring to Table 12-15, what is the value of the critical range for the Marascuilo procedure to test for the
difference in proportions between year 1 and year 2 using a 0.05 level of significance?

ANSWER:
0.0754
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, critical value


ANSWER:
0.0722
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, critical range


ANSWER:
0.0705
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, critical value

132. True or False: Referring to Table 12-15, there is sufficient evidence to conclude that the proportions between
year 1 and year 2 are different at a 0.05 level of significance.

ANSWER:
True
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, decision, conclusion

133. True or False: Referring to Table 12-15, there is not sufficient evidence to conclude that the proportions
between year 1 and year 3 are different at a 0.05 level of significance.

ANSWER:
False
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, decision, conclusion

134. True or False: Referring to Table 12-15, there is sufficient evidence to conclude that the proportions between
year 2 and year 3 are different at a 0.05 level of significance.

ANSWER:
True
KEYWORDS: chi-square test for difference in proportions, Marascuilo procedure, decision conclusion


CHAPTER 13: SIMPLE LINEAR REGRESSION

1. The Y intercept (b
0
) represents the
a) predicted value of Y when X = 0.
b) change in estimated average Y per unit change in X.
c) predicted value of Y.
d) variation around the sample regression line.

ANSWER:
a
KEYWORDS: intercept, interpretation

2. The Y intercept (b
0
) represents the
a) estimated average Y when X = 0.
b) change in estimated average Y per unit change in X.
c) predicted value of Y.
d) variation around the sample regression line.

ANSWER:
a

3. The slope (b
1
) represents
a) predicted value of Y when X = 0.
b) the estimated average change in Y per unit change in X.
c) the predicted value of Y.
d) variation around the line of regression.

ANSWER:
b
KEYWORDS: slope, interpretation

4. The least squares method minimizes which of the following?
a) SSR
b) SSE
c) SST
d) all of the above

ANSWER:
b
KEYWORDS: least squares, properties


TABLE 13-1

A large national bank charges local companies for using their services. A bank official reported the results of a
regression analysis designed to predict the banks charges (Y) -- measured in dollars per month -- for services
rendered to local companies. One independent variable used to predict service charge to a company is the
companys sales revenue (X) -- measured in millions of dollars. Data for 21 companies who use the banks services
were used to fit the model:
E(Y) = |
0
+ |
1
X
The results of the simple linear regression are provided below.
2, 700 20 , 65, two-tailed value 0.034 (for testing )

YX
Y X S p |
1
= + = =

5. Referring to Table 13-1, interpret the estimate of |
0
, the Y intercept of the line.
a) All companies will be charged at least $2,700 by the bank.
b) There is no practical interpretation, since a sales revenue of $0 is a nonsensical value.
c) About 95% of the observed service charges fall within $2,700 of the least squares line.
d) For every $1 million increase in sales revenue, we expect a service charge to decrease $2,700.

ANSWER:
b

6. Referring to Table 13-1, interpret the standard error of the estimate in the model.
a) About 95% of the observed service charges fall within $65 of the least squares line.
b) About 95% of the observed service charges equal their corresponding predicted values.
c) About 95% of the observed service charges fall within $130 of the least squares line.
d) For every $1 million increase in sales revenue, we expect a service charge to increase $65.

ANSWER:
c
KEYWORDS: standard error of the estimate, interpretation

7. Referring to Table 13-1, interpret the p-value for testing whether |
1
exceeds 0.
a) There is sufficient evidence (at the o = 0.05) to conclude that sales revenue (X) is a useful linear
predictor of service charge (Y).
b) There is insufficient evidence (at the o = 0.10) to conclude that sales revenue (X) is a useful linear
predictor of service charge (Y).
c) Sales revenue (X) is a poor predictor of service charge (Y).
d) For every $1 million increase in sales revenue, we expect a service charge to increase $0.034.

ANSWER:
a
KEYWORDS: p-value, interpretation

8. Referring to Table 13-1, a 95% confidence interval for |
1
is (15, 30). Interpret the interval.
a) We are 95% confident that the mean service charge will fall between $15 and $30 per month.
b) We are 95% confident that the sales revenue (X) will increase between $15 and $30 million for every $1
increase in service charge (Y).
c) We are 95% confident that the average service charge (Y) will increase between $15 and $30 for every
$1 million increase in sales revenue (X).
d) At the o = 0.05 level, there is no evidence of a linear relationship between service charge (Y) and sales
revenue (X).

ANSWER:
c

TABLE 13-2

A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product.
To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy
bar sales as the dependent variable, the company will conduct a simple linear regression on the data below:
City Price ($) Sales
River Falls 1.30 100
Hudson 1.60 90
Ellsworth 1.80 90
Prescott 2.00 40
Rock Elm 2.40 38
Stillwater 2.90 32

9. Referring to Table 13-2, what is the estimated slope parameter for the candy bar price and sales data?
a) 161.386
b) 0.784
c) 3.810
d) 48.193

ANSWER:
d
KEYWORDS: slope, estimation


10. Referring to Table 13-2, what is the estimated average change in the sales of the candy bar if price goes up by
$1.00?
a) 161.386
b) 0.784
c) 3.810
d) 48.193

ANSWER:
d

11. Referring to Table 13-2, what is the coefficient of correlation for these data?
a) 0.8854
b) 0.7839
c) 0.7839
d) 0.8854

ANSWER:
a
KEYWORDS: coefficient of correlation, estimation

12. Referring to Table 13-2, what is the percentage of the total variation in candy bar sales explained by the
regression model?
a) 100%
b) 88.54%
c) 78.39%
d) 48.19%

ANSWER:
c
KEYWORDS: coefficient of determination, interpretation

13. Referring to Table 13-2, what percentage of the total variation in candy bar sales is explained by prices?
a) 100%
b) 88.54%
c) 78.39%
d) 48.19%

ANSWER:
c


14. Referring to Table 13-2, what is the standard error of the estimate, S
YX
, for the data?
a) 0.784
b) 0.885
c) 12.650
d) 16.299

ANSWER:
d
KEYWORDS: standard error of the estimate, estimation

15. Referring to Table 13-2, what is the standard error of the regression slope estimate, s
b1
?
a) 0.784
b) 0.885
c) 12.650
d) 16.299

ANSWER:
c
KEYWORDS: standard error, slope

16. Referring to Table 13-2, what is (X X )
2
for these data?
a) 0
b) 1.66
c) 2.54
d) 25.66

ANSWER:
b
KEYWORDS: sum of squares

17. Referring to Table 13-2, to test that the regression coefficient, |
1
, is not equal to 0, what would be the limits of
the rejection region for
1
b ? Use o = 0.05.
a) 48.193 45.245
b) 48.193 35.123
c) 0 45.245
d) 0 35.123

ANSWER:
d
KEYWORDS: t test on slope, critical value


18. Referring to Table 13-2, to test whether a change in price will have any impact on average sales, what would be
the limits of the rejection region for
1
b ? Use o = 0.05.
a) 48.193 45.245
b) 48.193 35.117
c) 48.193 2.776
d) 0 35.117

ANSWER:
d
EXPLANATION: This is a test for |
1
that is not equal to 0.

19. Referring to Table 13-2, if the price of the candy bar is set at $2, the estimated average sales will be
a) 30.
b) 65.
c) 90.
d) 100.

ANSWER:
b
KEYWORDS: estimation of mean values

20. Referring to Table 13-2, if the price of the candy bar is set at $2, the predicted sales will be
a) 30.
b) 65.
c) 90.
d) 100.

ANSWER:
b
KEYWORDS: prediction of individual values

21. True of False: The chancellor of a university has commissioned a team to collect data on students GPAs and
the amount of time they spend bar hopping every week (measured in minutes). He wants to know if imposing
much tougher regulations on all campus bars, to make it more difficult for students to spend time in any campus
bar, will have a significant impact on general students' GPAs. His team should use a t test on the slope of the
population regression.

ANSWER:
True
KEYWORDS: t test on slope


22. The residual represents the discrepancy between the observed dependent variable and its _______ value.

ANSWER:
predicted or estimated average
KEYWORDS: estimation of mean values, prediction of individual values

TABLE 13-3

The director of cooperative education at a state college wants to examine the effect of cooperative education job
experience on marketability in the workplace. She takes a random sample of 4 students. For these 4, she finds out
how many times each had a cooperative education job and how many job offers they received upon graduation.
These data are presented in the table below.

Student CoopJobs JobOffer
1 1 4
2 2 6
3 1 3
4 0 1

23. Referring to Table 13-3, set up a scatter diagram.

ANSWER:

KEYWORDS: scatter plot

Scatter Diagram
0
1
2
3
4
5
6
0 1 2
Coop Jobs
J
o
b

O
f
f
e
r
s

24. Referring to Table 13-3, the least squares estimate of the slope is __________.

ANSWER:
2.50
KEYWORDS: slope, estimation, least squares

25. Referring to Table 13-3, the least squares estimate of the Y intercept is __________.

ANSWER:
1.00
KEYWORDS: intercept, estimation, least squares

26. Referring to Table 13-3, the prediction for the number of job offers for a person with 2 cooperative education
jobs is __________.

ANSWER:
6

27. Referring to Table 13-3, the total sum of squares (SST) is __________.

ANSWER:
13.0

28. Referring to Table 13-3, the regression sum of squares (SSR) is __________.

ANSWER:
12.5

29. Referring to Table 13-3, the error or residual sum of squares (SSE) is __________.

ANSWER:
0.50

30. Referring to Table 13-3, the coefficient of determination is __________.

ANSWER:
0.962
KEYWORDS: coefficient of determination

31. Referring to Table 13-3, the standard error of estimate is __________.

ANSWER:
0.50
KEYWORDS: standard error of estimate

32. Referring to Table 13-3, the coefficient of correlation is __________.

ANSWER:
0.981
KEYWORDS: coefficient of correlation

33. Referring to Table 13-3, suppose the director of cooperative education wants to obtain a 95% confidence
interval estimate for the mean number of job offers received by people who have had exactly one cooperative
education job. The t critical value she would use is ________.

ANSWER:
4.3027
KEYWORDS: confidence interval, estimation of mean values, critical value

34. Referring to Table 13-3, suppose the director of cooperative education wants to obtain a 95% confidence
interval estimate for the mean number of job offers received by people who have had exactly one cooperative
education job. The confidence interval is from ________ to ________.

ANSWER:
2.424; 4.576
KEYWORDS: confidence interval, estimation of mean values, critical value

35. Referring to Table 13-3, suppose the director of cooperative education wants to obtain a 95% prediction interval
estimate for the mean number of job offers received by people who have had exactly one cooperative education
job. The prediction interval is from ________ to ________.

ANSWER:
1.0947; 5.9053
KEYWORDS: prediction interval, prediction of individual values

36. True or False: Referring to Table 13-3, suppose the director of cooperative education wants to obtain two 95%
confidence interval estimates. One is for the mean number of job offers received by people who have had
exactly one cooperative education job and one for people who have had two. The confidence interval for people
who have had one cooperative education job would be the wider of the two intervals.

ANSWER:
False
KEYWORDS: confidence interval, estimation of mean values

for the number of job offers received by a person who has had exactly two cooperative education jobs. The t
critical value she would use is ________.


ANSWER:
4.3027
KEYWORDS: prediction interval, prediction of individual values, critical value

for the number of job offers received by a person who has had exactly two cooperative education jobs. The
prediction interval is from ________ to ________.

ANSWER:
3.154; 8.846
KEYWORDS: prediction interval, prediction of individual values

39. True or False: Referring to Table 13-3, suppose the director of cooperative education wants to obtain both a
95% confidence interval estimate and a 95% prediction interval for X = 2. The confidence interval estimate
would be the wider of the two intervals.

ANSWER:
False
KEYWORDS: confidence interval, prediction interval, estimation of mean values, prediction of individual values,
properties

40. Referring to Table 13-3, the director of cooperative education wanted to test the hypothesis that the true slope
was equal to 0. The denominator of the test statistic is s
b1
. The value of s
b1
in this sample is ________.

ANSWER:
0.3536
KEYWORDS: t test on slope, standard error, slope

was equal to 0. The value of the test statistic is ________.

ANSWER:
7.07
KEYWORDS: t test on slope, test statistic, slope


was equal to 3.0. The value of the test statistic is ________.

ANSWER:
-1.4142
KEYWORDS: t test on slope, test statistic, slope

was equal to 0. For a test with a level of significance of 0.05, the null hypothesis should be rejected if the value
of the test statistic is ________.

ANSWER:
> 4.3027 or < -4.3027
KEYWORDS: t test on slope, critical value, slope, decision

was equal to 3.0. For a test with a level of significance of 0.05, the null hypothesis should be rejected if the
value of the test statistic is ________.

ANSWER:
> 4.3027 or < -4.3027
KEYWORDS: t test on slope, critical value, slope, decision

was equal to 0. The p-value of the test is between ________ and ________.

ANSWER:
0.01 and 0.02 using the Table, or 0.0194 using Excel
KEYWORDS: t test on slope, p-value, slope

was equal to 3.0. The p-value of the test is between ________ and ________.

ANSWER:
0.2 and 0.5 using the Table, or 0.2929 using Excel
EXPLANATION: The t test statistic is
( ) ( )
1
1 1
2.5 3
1.4142
0.3536
b
b
t
S
|
= = =
KEYWORDS: t test on slope, p-value, slope


TABLE 13-4

The managers of a brokerage firm are interested in finding out if the number of new clients a broker brings into the
firm affects the sales generated by the broker. They sample 12 brokers and determine the number of new clients
they have enrolled in the last year and their sales amounts in thousands of dollars. These data are presented in the
table that follows.
Broker Clients Sales
1 27 52
2 11 37
3 42 64
4 33 55
5 15 29
6 15 34
7 25 58
8 36 59
9 28 44
10 30 48
11 17 31
12 22 38

47. Referring to Table 13-4, set up a scatter diagram.

ANSWER:


Scatter Diagram
0
10
20
30
40
50
60
70
0 5 10 15 20 25 30 35 40 45
Cli ents
S
a
l
e
s

48. Referring to Table 13-4, the least squares estimate of the slope is __________.

ANSWER:
1.12
KEYWORDS: slope, estimation, least squares

49. Referring to Table 13-4, the least squares estimate of the Y intercept is __________.

ANSWER:
17.7
KEYWORDS: intercept, estimation, least squares

50. Referring to Table 13-4, the prediction for the amount of sales (in $1,000s) for a person who brings 25 new
clients into the firm is ________.

ANSWER:
45.66

51. Referring to Table 13-4, the total sum of squares (SST) is __________.

ANSWER:
1,564.2

52. Referring to Table 13-4, the regression sum of squares (SSR) is __________.

ANSWER:
1,227.4

53. Referring to Table 13-4, the error or residual sum of squares (SSE) is __________.

ANSWER:
336.9

54. Referring to Table 13-4, the coefficient of determination is __________.

ANSWER:
0.785

55. Referring to Table 13-4, ______% of the total variation in sales generated can be explained by the number of
new clients brought in.

ANSWER:
78.5


56. Referring to Table 13-4, the standard error of the estimated slope coefficient is __________.

ANSWER:
0.185
KEYWORDS: slope, standard error

57. Referring to Table 13-4, the standard error of estimate is __________.

ANSWER:
5.804

58. Referring to Table 13-4, the coefficient of correlation is __________.

ANSWER:
0.886

59. Referring to Table 13-4, suppose the managers of the brokerage firm want to obtain a 99% confidence interval
estimate for the mean sales made by brokers who have brought into the firm 24 new clients. The t critical value
they would use is ________.

ANSWER:
3.1693
KEYWORDS: estimation of mean values, confidence interval, critical value

60. Referring to Table 13-4, suppose the managers of the brokerage firm want to obtain a 99% confidence interval
estimate for the mean sales made by brokers who have brought into the firm 24 new clients. The confidence
interval is from ________ to ________.

ANSWER:
39.19; 49.89
KEYWORDS: estimation of mean values, confidence interval


61. Referring to Table 13-4, suppose the managers of the brokerage firm want to obtain a 99% prediction interval
for the sales made by a broker who has brought into the firm 18 new clients. The t critical value they would use
is ________.

ANSWER:
3.1693
KEYWORDS: prediction of individual values, prediction interval, critical value

62. Referring to Table 13-4, suppose the managers of the brokerage firm want to obtain a 99% prediction interval
for the sales made by a broker who has brought into the firm 18 new clients. The prediction interval is from
________ to ________.

ANSWER:
18.23; 57.42
KEYWORDS: prediction of individual values, prediction interval

63. Referring to Table 13-4, suppose the managers of the brokerage firm want to obtain both a 99% confidence
interval estimate and a 99% prediction interval for X = 24. The confidence interval estimate would be the
__________ (wider or narrower) of the two intervals.

ANSWER:
narrower
KEYWORDS: prediction of individual values, prediction interval, estimation of mean values, confidence interval,
properties

64. Referring to Table 13-4, the managers of the brokerage firm wanted to test the hypothesis that the true slope was
equal to 0. The denominator of the test statistic is s
b1
. The value of s
b1
in this sample is ________.

ANSWER:
0.1853
KEYWORDS: t test on slope, slope, standard error

equal to 0. The value of the test statistic is _______.

ANSWER:
6.04
KEYWORDS: t test on slope, slope, test statistic


66. Referring to Table 13-4, the managers of the brokerage firm wanted to test the hypothesis that the number of
new clients brought in did not affect the amount of sales generated. The value of the test statistic is _______.

ANSWER:
6.04

equal to 0. For a test with a level of significance of 0.01, the null hypothesis should be rejected if the value of
the test statistic is ________.

ANSWER:
> 3.1693 or < -3.1693
KEYWORDS: t test on slope, slope, critical value, decision

equal to 0. The p-value of the test is ________.

ANSWER:
< 0.01 using the Table, or 0.000126 using Excel
KEYWORDS: t test on slope, slope, p-value

equal to 0. At a level of significance of 0.01, the null hypothesis should be _______ (accepted or rejected).

ANSWER:
rejected
KEYWORDS: t test on slope, slope, decision

equal to 0. At a level of significance of 0.01, the decision that should be made implies that _____ (there is or
there is no) linear dependent relation between the independent and dependent variables.

ANSWER:
there is
KEYWORDS: t test on slope, slope, conclusion

new clients brought in had a positive impact on the amount of sales generated. The value of the test statistic is
_______.

ANSWER:
6.04

new clients brought in had a positive impact on the amount of sales generated. For a test with a level of
significance of 0.01, the null hypothesis should be rejected if the value of the test statistic is ________.

ANSWER:
> 2.7638
KEYWORDS: t test on slope, slope, critical value, decision

new clients brought in had a positive impact on the amount of sales generated. The p-value of the test is
________.

ANSWER:
< 0.005 using the Table, or 0.000126/2 using Excel

new clients brought in had a positive impact on the amount of sales generated. At a level of significance of 0.01,
the null hypothesis should be _______ (accepted or rejected).

ANSWER:
rejected
KEYWORDS: t test on slope, slope

new clients brought in had a positive impact on the amount of sales generated. At a level of significance of 0.01,
the decision that should be made implies that the number of new clients brought in _____ (had or did not have)
a positive impact on the amount of sales generated.

ANSWER:
had
KEYWORDS: t test on slope, slope, conclusion

TABLE 13-5

The managing partner of an advertising agency believes that his company's sales are related to the industrys sales. He
uses Microsoft Excels Data Analysis tool to analyze the last 4 years of quarterly data (i.e., n = 16) with the following
results:

Regression Statistics
Multiple R 0.802
R Square 0.643
Adjusted R Square 0.618
Standard Error SYX 0.9224
Observations 16

ANOVA
df SS MS F Sig.F
Regression 1 21.497 21.497 25.27 0.000
Error 14 11.912 0.851
Total 15 33.409

Predictor Coef StdError t Stat p-value
Intercept 3.962 1.440 2.75 0.016
Industry 0.040451 0.008048 5.03 0.000

Durbin-Watson Statistic 1.59

76. Referring to Table 13-5, the value of the quantity that the least squares regression line minimizes is ________.

ANSWER:
11.912
KEYWORDS: least squares, properties, sum of squares

77. Referring to Table 13-5, the estimates of the Y intercept and slope are ________ and ________, respectively.

ANSWER:
3.962; 0.040451
KEYWORDS: intercept, slope, estimation

78. Referring to Table 13-5, the prediction for a quarter in which X = 120 is Y = ________.

ANSWER:
8.816

79. Referring to Table 13-5, the standard error of the estimate is ________.

ANSWER:
0.9224

80. Referring to Table 13-5, the coefficient of determination is ________.

ANSWER:
0.643

81. Referring to Table 13-5, the standard error of the estimated slope coefficient is ________.

ANSWER:
0.008
KEYWORDS: slope, standard error

82. Referring to Table 13-5, the correlation coefficient is ________.

ANSWER:
0.802

83. Referring to Table 13-5, the partner wants to test for autocorrelation using the Durbin-Watson statistic. Using a
level of significance of 0.05, the critical values of the test are d
L
= ________, and d
U
= ________.

ANSWER:
1.10; 1.37
KEYWORDS: Durbin-Watson statistic, critical value, autocorrelation

84. Referring to Table 13-5, the partner wants to test for autocorrelation using the Durbin-Watson statistic. Using a
level of significance of 0.05, the decision he should make is:
a) there is evidence of autocorrelation.
b) the test is unable to make a definite conclusion.
c) there is no evidence of autocorrelation.
d) there is not enough information to perform the test.

ANSWER:
c
KEYWORDS: Durbin-Watson statistic, decision, autocorrelation

85. If the Durbin-Watson statistic has a value close to 0, which assumption is violated?
a) normality of the errors
b) independence of errors
c) homoscedasticity

ANSWER:
b
KEYWORDS: Durbin-Watson statistic, autocorrelation, assumption

86. If the Durbin-Watson statistic has a value close to 4, which assumption is violated?
a) normality of the errors
b) independence of errors
c) homoscedasticity

ANSWER:
b
KEYWORDS: Durbin-Watson statistic, assumption, autocorrelation

87. The standard error of the estimate is a measure of
a) total variation of the Y variable.
b) the variation around the sample regression line.
c) explained variation.
d) the variation of the X variable.

ANSWER:
b
KEYWORDS: standard error of estimate, interpretation

88. The coefficient of determination (r
2
) tells us
a) that the coefficient of correlation (r) is larger than 1.
b) whether r has any significance.
c) that we should not partition the total variation.
d) the proportion of total variation that is explained.

ANSWER:
d


TABLE 13-6

The following Excel tables are obtained when "Score received on an exam (measured in percentage points)" (Y) is
regressed on "percentage attendance" (X) for 22 students in a Statistics for Business and Economics course.

Multiple R 0.142620229
R Square 0.02034053
Adjusted R Square -0.028642444
Standard Error 20.25979924
Observations 22

Coefficients Standard Error t Stat p-value
Intercept 39.39027309 37.24347659 1.057642216 0.302826622
Attendance 0.340583573 0.52852452 0.644404489 0.526635689

89. Referring to Table 13-6, which of the following statements is true?
a) -2.86% of the total variability in score received can be explained by percentage attendance.
b) -2.86% of the total variability in percentage attendance can be explained by score received.
c) 2% of the total variability in score received can be explained by percentage attendance.
d) 2% of the total variability in percentage attendance can be explained by score received.

ANSWER:
c

90. Referring to Table 13-6, which of the following statements is true?
a) If attendance increases by 0.341%, the estimated average score received will increase by 1 percentage
point.
b) If attendance increases by 1%, the estimated average score received will increase by 39.39 percentage
points.
c) If attendance increases by 1%, the estimated average score received will increase by 0.341 percentage
points.
d) If the score received increases by 39.39%, the estimated average attendance will go up by 1%.

ANSWER:
c


91. True or False: The Regression Sum of Squares (SSR) can never be greater than the Total Sum of Squares (SST).

ANSWER:
True
KEYWORDS: sum of squares, properties

92. True or False: The coefficient of determination represents the ratio of SSR to SST.

ANSWER:
True
KEYWORDS: coefficient of determination, properties

93. True or False: Regression analysis is used for prediction, while correlation analysis is used to measure the
strength of the association between two numerical variables.

ANSWER:
True
KEYWORDS: coefficient of correlation, slope, interpretation

94. True or False: The value of r is always positive.

ANSWER:
False
KEYWORDS: coefficient of correlation, properties

95. In performing a regression analysis involving two numerical variables, we are assuming
a) the variances of X and Y are equal.
b) the variation around the line of regression is the same for each X value.
c) that X and Y are independent.
d) all of the above

ANSWER:
b
KEYWORDS: assumption


96. Which of the following assumptions concerning the probability distribution of the random error term is stated
incorrectly?
a) The distribution is normal.
b) The mean of the distribution is 0.
c) The variance of the distribution increases as X increases.
d) The errors are independent.

ANSWER:
c
KEYWORDS: assumption

97. Based on the residual plot below, you will conclude that there might be a violation of which of the following
assumptions?

a) linearity of the relationship
b) normality of errors
c) homoscedasticity
d) independence of errors

ANSWER:
c
KEYWORDS: assumption, homoscedasticity

98. True or False: Data that exhibit an autocorrelation effect violate the regression assumption of independence.

ANSWER:
True
KEYWORDS: assumption, autocorrelation

Footage Residual Plot
-4000
-2000
0
2000
4000
6000
0 1,000 2,000 3,000 4,000 5,000 6,000
Footage
R
e
s
i
d
u
a
l
s

99. True or False: The Durbin-Watson D statistic is used to check the assumption of normality.

ANSWER:
False
KEYWORDS: Durbin-Watson statistic, assumption, autocorrelation

100. If the residuals in a regression analysis of time ordered data are not correlated, the value of the Durbin-
Watson D statistic should be near __________.

ANSWER:
2
KEYWORDS: Durbin-Watson statistic, autocorrelation, properties

101. The residuals represent
a) the difference between the actual Y values and the mean of Y.
b) the difference between the actual Y values and the predicted Y values.
c) the square root of the slope.
d) the predicted value of Y for the average X value.

ANSWER:
b
KEYWORDS: residual, properties

102. If the plot of the residuals is fan shaped, which assumption is violated?
a) normality
b) homoscedasticity
c) independence of errors
d) No assumptions are violated, the graph should resemble a fan.

ANSWER:
b
KEYWORDS: residual plot, homoscedasticity

103. What do we mean when we say that a simple linear regression model is statistically useful?
a) All the statistics computed from the sample make sense.
b) The model is an excellent predictor of Y.
c) The model is practically useful for predicting Y.
d) The model is a better predictor of Y than the sample mean, Y .

ANSWER:
d


104. If the correlation coefficient (r) = 1.00, then
a) the Y-intercept (b
0
) must equal 0.
b) the explained variation equals the unexplained variation.
c) there is no unexplained variation.
d) there is no explained variation.

ANSWER:
c
KEYWORDS: coefficient of correlation, properties, interpretation

105. If the correlation coefficient (r) = 1.00, then
a) all the data points must fall exactly on a straight line with a slope that equals 1.00.
b) all the data points must fall exactly on a straight line with a negative slope.
c) all the data points must fall exactly on a straight line with a positive slope.
d) all the data points must fall exactly on a horizontal straight line with a zero slope.

ANSWER:
c

106. Assuming a linear relationship between X and Y, if the coefficient of correlation (r) equals 0.30,
a) there is no correlation.
b) the slope (b
1
) is negative.
c) variable X is larger than variable Y.
d) the variance of X is negative.

ANSWER:
b
KEYWORDS: coefficient of correlation, properties, interpretation

107. Testing for the existence of correlation is equivalent to
a) testing for the existence of the slope ( |
1
).
b) testing for the existence of the Y intercept ( |
0
).
c) the confidence interval estimate for predicting Y.

ANSWER:
a
KEYWORDS: coefficient of correlation, t test for correlation coefficient, t test on slope


108. The strength of the linear relationship between two numerical variables may be measured by the
a) scatter diagram.
b) coefficient of correlation.
c) slope.
d) Y intercept.

ANSWER:
b
KEYWORDS: coefficient of correlation, interpretation

109. In a simple linear regression problem, r and b
1

a) may have opposite signs.
b) must have the same sign.
c) must have opposite signs.
d) are equal.

ANSWER:
b
KEYWORDS: coefficient of correlation, slope, properties

110. The sample correlation coefficient between X and Y is 0.375. It has been found out that the p-value is 0.256
when testing
0
: 0 H = against the two-sided alternative
1
: 0 H = . To test
0
: 0 H = against the one-sided
alternative
1
: 0 H < at a significance level of 0.193, the p-value is
a) 0.256/ 2
b) ( ) 0.256 2
c) 1 0.256
d) 1 0.256/ 2

ANSWER:
d
KEYWORDS: coefficient of correlation, t test for correlation coefficient, p-value


when testing
0
: 0 H against the two-sided alternative
1
: 0 H . To test
0
: 0 H against the one-sided
alternative
1
: 0 H at a significance level of 0.193, the p-value is
a) 0.256/ 2
b) 0.256 2
c) 1 0.256
d) 1 0.256/ 2

ANSWER:
a

when testing
0
: 0 H against the one-sided alternative
1
: 0 H . To test
0
: 0 H against the two-sided
alternative
1
a) 0.256/ 2
b) 0.256 2
c) 1 0.256
d) 1 0.256/ 2

ANSWER:
b

when testing
0
: 0 H against the one-sided alternative
1
: 0 H . To test
0
: 0 H against the two-sided
alternative
1
a) 0.744/ 2
b) 0.744 2
c) 1 0.744
d) 1 0.744 2

ANSWER:
d


114. If you wanted to find out if alcohol consumptions (measured in fluid oz.) and grade point average on a 4-point
scale are linearly related, you would perform a
i.
2
_ test for the difference in two proportions.
j.
2
_ test for independence.
k. a Z test for the difference in two proportions.
l. a t test for independence.

ANSWER:
d
KEYWORDS: coefficient of correlation, t test for correlation coefficient

115. True or False: When r = 1, it indicates a perfect relationship between X and Y.

ANSWER:
True

TABLE 13-7

An investment specialist claims that if one holds a portfolio that moves in the opposite direction to the market index
like the S&P 500, then it is possible to reduce the variability of the portfolio's return. In other words, one can create
a portfolio with positive returns but less exposure to risk.
A sample of 26 years of S&P 500 index data and a portfolio consisting of stocks of private prisons, which are
believed to be negatively related to the S&P 500 index, is collected. A regression analysis was performed by
regressing the returns of the prison stocks portfolio (Y) on the returns of S&P 500 index (X) to prove that the prison
stocks portfolio is negatively related to the S&P 500 index at a 5% level of significance. The results are given in the
following Excel output.

Intercept 4.866004258 0.35743609 13.61363441 8.7932E-13
S&P -0.502513506 0.071597152 -7.01862425 2.94942E-07

116. Referring to Table 13-7, to test whether the prison stocks portfolio is negatively related to the S&P 500 index,
the appropriate null and alternative hypotheses are, respectively,
a)
0 1
: 0 vs. : 0 H H > <
b)
0 1
: 0 vs. : 0 H H s >
c)
0 1
: 0 vs. : 0 H r H r > <
d)
0 1
: 0 vs. : 0 H r H r s >

ANSWER:
a
KEYWORDS: coefficient of correlation, t test for correlation coefficient, form of hypothesis

the measured value of the test statistic is
a) -7.019.
b) -0.503.
c) 0.072.
d) 0.357.

ANSWER:
a
KEYWORDS: coefficient of correlation, t test for correlation coefficient, test statistic

the p-value of the associated test statistic is
a) 2.94942E-07
b) 2.94942E-07 / 2
c) 2.94942E-07 2
d) 8.7932E-13

ANSWER:
b

119. Referring to Table 13-7, which of the following will be a correct conclusion?
a) We cannot reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show
that the prisons stock portfolio and S&P 500 index are negatively related.
b) We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that
the prisons stock portfolio and S&P 500 index are negatively related.
c) We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient evidence to
show that the prisons stock portfolio and S&P 500 index are negatively related.
d) We can reject the null hypothesis and conclude that there is not sufficient evidence to show that the
prisons stock portfolio and S&P 500 index are negatively related.

ANSWER:
b
KEYWORDS: coefficient of correlation, t test for correlation coefficient, decision, conclusion

TABLE 13-8

It is believed that GPA (grade point average, based on a four point scale) should have a positive linear relationship
with ACT scores. Given below is the Excel output from regressing GPA on ACT scores using a data set of 8
randomly chosen students from a Big Ten university.

Regressing GPA on ACT

Multiple R 0.7598
R Square 0.5774
Observations 8

ANOVA
df SS MS F Significance F
Regression 1 0.5940 0.5940 8.1986 0.0286
Residual 6 0.4347 0.0724
Total 7 1.0287

Coefficients Standard Error t Stat p-value Lower 95% Upper 95%
Intercept 0.5681 0.9284 0.6119 0.5630 -1.7036 2.8398
ACT 0.1021 0.0356 2.8633 0.0286 0.0148 0.1895

120. Referring to Table 13-8, the interpretation of the coefficient of determination in this regression is that
a) 57.74% of the total variation of ACT scores can be explained by GPA.
b) ACT scores account for 57.74% of the total fluctuation in GPA.
c) GPA accounts for 57.74% of the variability of ACT scores.

ANSWER:
b

121. Referring to Table 13-8, the value of the measured test statistic to test whether there is any linear relationship
between GPA and ACT is
a) 0.0356.
b) 0.1021.
c) 0.7598.
d) 2.8633.

ANSWER:
d
KEYWORDS: coefficient of correlation, t test for correlation coefficient, test statistic

122. Referring to Table 13-8, what is the predicted average value of GPA when ACT = 20?
a) 2.61
b) 2.66
c) 2.80
d) 3.12

ANSWER:
a

123. Referring to Table 13-8, what are the decision and conclusion on testing whether there is any linear
relationship at the 1% level of significance between GPA and ACT scores?
a) Do not reject the null hypothesis; hence, there is not sufficient evidence to show that ACT scores and
GPA are linearly related.
b) Reject the null hypothesis; hence, there is not sufficient evidence to show that ACT scores and GPA are
linearly related.
c) Do not reject the null hypothesis; hence, there is sufficient evidence to show that ACT scores and GPA
are linearly related.
d) Reject the null hypothesis; hence, there is sufficient evidence to show that ACT scores and GPA are
linearly related.

ANSWER:
a
KEYWORDS: coefficient of correlation, t test for correlation coefficient, decision, conclusion

124. Referring to Table 13-8, the value of the measured (observed) test statistic of the F test for
0 1
: 0 vs. : 0 H H | |
1 1
= =
a) may be negative.
b) is always positive.
c) is always negative.
d) has the same sign as the corresponding t test statistic.

ANSWER:
b
KEYWORDS: F test on slope, test statistic


TABLE 13-9

It is believed that the average number of hours spent studying per day (HOURS) during undergraduate education
should have a positive linear relationship with starting salary (SALARY, measured in thousands of dollars per
month) after graduation. Given below is the Excel output from regressing starting salary on number of hours spent
studying per day for a sample of 51 students. NOTE: Some of the numbers in the output are purposely erased.

Multiple R 0.8857
R Square 0.7845
Observations 51

ANOVA
Regression 1 335.0472 335.0473 178.3859
Residual 1.8782
Total 50 427.0798

Coefficients
Standard
Error t Stat p-value Lower 95% Upper 95%
Intercept -1.8940 0.4018 -4.7134 2.051E-05 -2.7015 -1.0865
Hours 0.9795 0.0733 13.3561 5.944E-18 0.8321 1.1269

125. Referring to Table 13-9, the estimated average change in salary (in thousands of dollars) as a result of
spending an extra hour per day studying is
a) -1.8940.
b) 0.7845.
c) 0.9795.
d) 335.0473.

ANSWER:
c

126. Referring to Table 13-9, the value of the measured t test statistic to test whether average SALARY depends
linearly on HOURS is
a) -4.7134.
b) -1.8940.
c) 0.9795.
d) 13.3561.

ANSWER:
d

127. Referring to Table 13-9, the p-value of the measured F test statistic to test whether HOURS affect SALARY
is
a) (5.944E-18)/2.
b) 5.944E-18.
c) (2.051E-05)/2.

d) 2.051E-05.

ANSWER:
b
KEYWORDS: F test on slope, slope, test statistic

128. Referring to Table 13-9, the degrees of freedom for testing whether HOURS affect SALARY are
a) 1, 49.
b) 1, 50.
c) 49, 1.
d) 50, 1.

ANSWER:
a
KEYWORDS: F test on slope, slope, degrees of freedom

129. Referring to Table 13-9, the error sum of squares (SSE) of the above regression is
a) 1.878215.
b) 92.0325465.
c) 335.047257.
d) 427.079804.

ANSWER:
b

130. Referring to Table 13-9, the 90% confidence interval for the average change in SALARY (in thousands of
dollars) as a result of spending an extra hour per day studying is
a) wider than [-2.70159, -1.08654].
b) narrower than [-2.70159, -1.08654].
c) wider than [0.8321927, 1.12697].
d) narrower than [0.8321927, 1.12697].

ANSWER:
d
KEYWORDS: slope, interpretation, confidence interval


131. Referring to Table 13-9, to test the claim that average SALARY depends positively on HOURS, against the
null hypothesis that average SALARY does not depend linearly on HOURS, the p-value of the test statistic is
a) (5.944E-18)/2.
b) 5.944E-18.
c) (2.051E-05)/2.
d) 2.051E-05.

ANSWER:
a

132. True or False: A zero population correlation coefficient between a pair of random variables means that there
is no linear relationship between the random variables.

ANSWER:
True
KEYWORDS: coefficient of correlation, interpretation

133. You give a pre-employment examination to your applicants. The test is scored from 1 to 100. You have data
on their sales at the end of one year measured in dollars. You want to know if there is any linear relationship
between pre-employment examination score and sales. An appropriate test to use is the t test on the population
correlation coefficient.

ANSWER:
True
KEYWORDS: coefficient of correlation, t test for correlation coefficient

134. The width of the prediction interval for the predicted value of Y is dependent on
a) the standard error of the estimate.
b) the value of X for which the prediction is being made.
c) the sample size.
d) all of the above

ANSWER:
d
KEYWORDS: prediction of individual values, prediction interval, properties


135. True or False: The confidence interval for the mean of Y is always narrower than the prediction interval for an
individual response Y given the same data set, X value, and confidence level.

ANSWER:
True
KEYWORDS: estimation of mean values, confidence interval, prediction of individual values, prediction interval,
properties

Table 13-10

The management of a chain electronic store would like to develop a model for predicting the weekly sales (in
thousand of dollars) for individual stores based on the number of customers who made purchases. A random sample
of 12 stores yields the following results:

Customers Sales (Thousands of Dollars)
907 11.20
926 11.05
713 8.21
741 9.21
780 9.42
898 10.08
510 6.73
529 7.02
460 6.12
872 9.52
650 7.53
603 7.25


136. Referring to Table 13-10, generate the scatter plot.

ANSWER:

137. Referring to Table 13-10, what are the values of the estimated intercept and slope?

ANSWER:
1.4464, 0.0100
KEYWORDS: intercept, slope, estimation

138. Referring to Table 13-10, what is the value of the coefficient of determination?

ANSWER:
0.9453

139. Referring to Table 13-10, what is the value of the coefficient of correlation?

ANSWER:
0.9723

140. Referring to Table 13-10, what is the value of the standard error of the estimate?

ANSWER:
0.4191
141. Referring to Table 13-10, which is the correct null hypothesis for testing whether the number of customers
who make purchases affects weekly sales?
a)
0 0
: 0 H | =
b)
0 1
: 0 H | =
c)
0
: 0 H =
Scatter Diagram
0
2
4
6
8
10
12
0 200 400 600 800 1000
Customers
S
a
l
s
e
s

(
T
h
o
u
s
a
n
d
s

o
f

D
o
l
l
a
r
s
)

d)
0
: 0 H =

ANSWER:
b
KEYWORDS: t test on slope, slope, form of hypothesis

142. Referring to Table 13-10, what is the value of the t test statistic when testing whether the number of customers
who make purchases affects weekly sales?

ANSWER:
13.1464

143. Referring to Table 13-10, what are the degrees of freedom of the t test statistic when testing whether the
number of customers who make purchases affects weekly sales?

ANSWER:
10
KEYWORDS: t test on slope, slope, degrees of freedom

144. Referring to Table 13-10, what is the p-value of the t test statistic when testing whether the number of
customers who make purchases affects weekly sales?

ANSWER:

145. True or False: Referring to Table 13-10, the null hypothesis for testing whether the number of customers who
make purchases affects weekly sales cannot be rejected if a 1% probability of committing a Type I error is
desired.

ANSWER:
False
KEYWORDS: t test on slope, slope, decision


146. True or False: Referring to Table 13-10, the average weekly sales will increase by an estimated $0.01 for each
additional purchasing customer.

ANSWER:
False
KEYWORDS: t test on slope, slope, interpretation

147. True or False: Referring to Table 13-10, the average weekly sales will increase by an estimated $10 for each
additional purchasing customer.

ANSWER:
True
KEYWORDS: t test on slope, slope, interpretation

148. True or False: Referring to Table 13-10, 93.98% of the total variation in weekly sales can be explained by the
variation in the number of customers who make purchases.

ANSWER:
False

149. Referring to Table 13-10, what are the degrees of freedom of the F test statistic when testing whether the
number of customers who make purchases is a good predictor of weekly sales?

ANSWER:
1 in the numerator and 10 in the denominator

150. Referring to Table 13-10, what is the value of the F test statistic when testing whether the number of
customers who make purchases is a good predictor of weekly sales?

ANSWER:
172.8265

151. Referring to Table 13-10, what is the p-value of the F test statistic when testing whether the number of
customers who make purchases is a good predictor of weekly sales?

ANSWER:
KEYWORDS: F test on slope, slope, p-value

152. True or False: Referring to Table 13-10, the p-value of the t test and F test should be the same when testing
whether the number of customers who make purchases is a good predictor of weekly sales.

ANSWER:
True

KEYWORDS: t test on slope, F test on slope, p-value

153. True or False: Referring to Table 13-10, the value of the t test statistic and F test statistic should be the same
when testing whether the number of customers who make purchases is a good predictor of weekly sales.

ANSWER:
False
KEYWORDS: t test on slope, F test on slope, test statistic

154. True or False: Referring to Table 13-10, the value of the F test statistic equals the square of the t test statistic
when testing whether the number of customers who make purchases is a good predictor of weekly sales.

ANSWER:
True
KEYWORDS: t test on slope, F test on slope, test statistic

155. Referring to Table 13-10, generate the residual plot.

ANSWER:

KEYWORDS: residual plot

Customers Residual Plot
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
0 200 400 600 800 1000
Customers
R
e
s
i
d
u
a
l
s

156. Referring to Table 13-10, the residual plot indicates possible violation of which assumptions?
a) linearity of the relationship
b) homoscedasticity
c) autocorrelation
d) normality

ANSWER:
b
KEYWORDS: homoscedasticity, residual plot, assumption

157. True or False: Referring to Table 13-10, it is inappropriate to compute the Durbin-Watson statistic and test for
autocorrelation in this case.

ANSWER:
True
KEYWORDS: Durbin-Watson statistic, autocorrelation

158. Referring to Table 13-10, construct a 95% confidence interval for the change in average weekly sales when
the number of customers who make purchases increases by one.

ANSWER:
0.0083 to 0.0117
KEYWORDS: slope, confidence interval, interpretation

159. Referring to Table 13-10, construct a 95% confidence interval for the average weekly sales when the number
of customers who make purchases is 600.

ANSWER:
7.1194 to 7.7864 thousands of dollars
KEYWORDS: estimate of mean values, confidence interval

160. Referring to Table 13-10, construct a 95% prediction interval for the weekly sales of a store that has 600
purchasing customers.

ANSWER:
6.4614 to 8.4444 thousands of dollars
KEYWORDS: prediction of individual values, prediction interval


CHAPTER 14: INTRODUCTION TO MULTIPLE REGRESSION

1. In a multiple regression problem involving two independent variables, if b
1
is computed to be +2.0, it means
that
a) the relationship between X
1
and Y is significant.
b) the estimated average of Y increases by 2 units for each increase of 1 unit of X
1
, holding X
2
constant.
c) the estimated average of Y increases by 2 units for each increase of 1 unit of X
1
, without regard to X
2
.
d) the estimated average of Y is 2 when X
1
equals zero.

ANSWER:
b

2. The coefficient of multiple determination r
2
Y.12

a) measures the variation around the predicted regression equation.
b) measures the proportion of variation in Y that is explained by X
1
and X
2
.
c) measures the proportion of variation in Y that is explained by X
1
holding X
2
constant.
d) will have the same sign as b
1
.

ANSWER:
b
KEYWORDS: coefficient of multiple determination, interpretation

3. In a multiple regression model, the value of the coefficient of multiple determination
a) has to fall between -1 and +1.
b) has to fall between 0 and +1.
c) has to fall between -1 and 0.
d) can fall between any pair of real numbers.

ANSWER:
b
KEYWORDS: coefficient of multiple determination, properties


4. In a multiple regression model, which of the following is correct regarding the value of the adjusted
2
r ?
a) It can be negative.
b) It has to be positive.
c) It has to be larger than the coefficient of multiple determination.
d) It can be larger than 1.

ANSWER:
a
KEYWORDS: adjusted r-square, properties

TABLE 14-1

A manager of a product sales group believes the number of sales made by an employee (Y) depends on how many
years that employee has been with the company (X
1
) and how he/she scored on a business aptitude test (X
2
). A
random sample of 8 employees provides the following:
Employee Y X
1
X
2

1 100 10 7
2 90 3 10
3 80 8 9
4 70 5 4
5 60 5 8
6 50 7 5
7 40 1 4
8 30 1 1

5. Referring to Table 14-1, for these data, what is the value for the regression constant, b
0
?
a) 0.998
b) 3.103
c) 4.698
d) 21.293

ANSWER:
d
KEYWORDS: intercept, estimation

6. Referring to Table 14-1, for these data, what is the estimated coefficient for the variable representing the years
an employee has been with the company, b
1
?
a) 0.998
b) 3.103
c) 4.698
d) 21.293

ANSWER:
b

7. Referring to Table 14-1, for these data, what is the estimated coefficient for the variable representing scores on
the aptitude test, b
2
?
a) 0.998
b) 3.103
c) 4.698
d) 21.293

ANSWER:
c

8. Referring to Table 14-1, if an employee who had been with the company 5 years scored a 9 on the aptitude test,
what would his estimated expected sales be?
a) 79.09
b) 60.88
c) 55.62
d) 17.98

ANSWER:
a

TABLE 14-2

A professor of industrial relations believes that an individuals wage rate at a factory (Y) depends on his
performance rating (X
1
) and the number of economics courses the employee successfully completed in college (X
2
).
The professor randomly selects 6 workers and collects the following information:
Employee Y ($) X
1
X
2

1 10 3 0
2 12 1 5
3 15 8 1
4 17 5 8
5 20 7 12
6 25 10 9

9. Referring to Table 14-2, for these data, what is the value for the regression constant, b
0
?
a) 0.616
b) 1.054
c) 6.932
d) 9.103

ANSWER:
c
KEYWORDS: intercept, estimation


10. Referring to Table 14-2, for these data, what is the estimated coefficient for performance rating, b
1
?
a) 0.616
b) 1.054
c) 6.932
d) 9.103

ANSWER:
b

11. Referring to Table 14-2, for these data, what is the estimated coefficient for the number of economics courses
taken, b
2
?
a) 0.616
b) 1.054
c) 6.932
d) 9.103

ANSWER:
a

12. Referring to Table 14-2, suppose an employee had never taken an economics course and managed to score a 5
on his performance rating. What is his estimated expected wage rate?
a) 10.90
b) 12.20
c) 17.23
d) 25.11

ANSWER:
b

13. Referring to Table 14-2, an employee who took 12 economics courses scores 10 on the performance rating.
What is her estimated expected wage rate?
a) 10.90
b) 12.20
c) 24.87
d) 25.70

ANSWER:
c


14. The variation attributable to factors other than the relationship between the independent variables and the
explained variable in a regression analysis is represented by
a) regression sum of squares.
b) error sum of squares.
c) total sum of squares.
d) regression mean squares.

ANSWER:
b

TABLE 14-3

An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic
product ($ billions) and aggregate price (consumer price index). The Microsoft Excel output of this regression is
partially reproduced below:
SUMMARY OUTPUT

Multiple R 0.991
R Square 0.982
Observations 10

ANOVA
df SS MS F Signif F
Regression 2 33.4163 16.7082 186.325 0.0001
Residual 7 0.6277 0.0897
Total 9 34.0440

Coeff StdError t Stat p-value
Intercept 0.0861 0.5674 0.152 0.8837
GDP 0.7654 0.0574 13.340 0.0001
Price 0.0006 0.0028 0.219 0.8330
15. Referring to Table 14-3, when the economist used a simple linear regression model with consumption as the
dependent variable and GDP as the independent variable, he obtained an r
2
value of 0.971. What additional
percentage of the total variation of consumption has been explained by including aggregate prices in the
multiple regression?
a) 98.2
b) 11.1
c) 2.8
d) 1.1

ANSWER:
d
KEYWORDS: coefficient of multiple determination

16. Referring to Table 14-3, the p-value for GDP is
a) 0.05.
b) 0.01.
c) 0.001.

ANSWER:
d
KEYWORDS: t test on slope, p-value

17. Referring to Table 14-3, the p-value for the aggregated price index is
a) 0.05.
b) 0.01.
c) 0.001.

ANSWER:
d

18. Referring to Table 14-3, the p-value for the regression model as a whole is
a) 0.05.
b) 0.01.
c) 0.001.

ANSWER:
d
KEYWORDS: F test for the entire regression, p-value

19. Referring to Table 14-3, what is the predicted consumption level for an economy with a GDP equal to $4 billion
and an aggregate price index of 150?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion

ANSWER:
b


20. Referring to Table 14-3, what is the estimated average consumption level for an economy with a GDP equal to
$4 billion and an aggregate price index of 150?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion

ANSWER:
b

21. Referring to Table 14-3, what is the estimated average consumption level for an economy with a GDP equal to
$2 billion and an aggregate price index of 90?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion

ANSWER:
a

22. Referring to Table 14-3, one economy in the sample had an aggregate consumption level of $3 billion, a GDP of
$3.5 billion, and an aggregate price level of 125. What is the residual for this data point?
a) $2.52 billion
b) $0.48 billion
c) $1.33 billion
d) $2.52 billion

ANSWER:
b
KEYWORDS: residual

23. Referring to Table 14-3, one economy in the sample had an aggregate consumption level of $4 billion, a GDP of
$6 billion, and an aggregate price level of 200. What is the residual for this data point?
a) $4.39 billion
b) $0.39 billion
c) $0.39 billion
d) $1.33 billion

ANSWER:
c
KEYWORDS: residual

24. Referring to Table 14-3, to test for the significance of the coefficient on aggregate price index, the value of the
relevant t-statistic is
a) 2.365.
b) 0.143.
c) 0.219.
d) 1.960.


ANSWER:
c
KEYWORDS: t test on slope, test statistic

25. Referring to Table 14-3, to test for the significance of the coefficient on aggregate price index, the p-value is
a) 0.0001.
b) 0.8330.
c) 0.8837.
d) 0.9999.

ANSWER:
b

26. Referring to Table 14-3, to test for the significance of the coefficient on gross domestic product, the p-value is
a) 0.0001.
b) 0.8330.
c) 0.8837.
d) 0.9999.

ANSWER:
a

27. Referring to Table 14-3, to test whether aggregate price index has a negative impact on consumption, the p-
value is
a) 0.0001.
b) 0.4165.
c) 0.8330.
d) 0.8837.

ANSWER:
b


28. Referring to Table 14-3, to test whether aggregate price index has a positive impact on consumption, the p-value
is
a) 0.0001.
b) 0.4165.
c) 0.5835.
d) 0.8330.

ANSWER:
c

29. Referring to Table 14-3, to test whether gross domestic product has a positive impact on consumption, the p-
value is
a) 0.00005.
b) 0.0001.
c) 0.9999.
d) 0.99995.

ANSWER:
a


TABLE 14-4

A real estate builder wishes to determine how house size (House) is influenced by family income (Income), family
size (Size), and education of the head of household (School). House size is measured in hundreds of square feet,
income is measured in thousands of dollars, and education is measured in years. The builder randomly selected 50
families and ran the multiple regression. Microsoft Excel output is provided below:

SUMMARY OUTPUT

Multiple R 0.865
R Square 0.748
Observations 50

ANOVA
df SS MS F Signif F
Regression 3605.7736 901.4434 0.0001
Residual 1214.2264 26.9828
Total 49 4820.0000

Intercept 1.6335 5.8078 0.281 0.7798
Income 0.4485 0.1137 3.9545 0.0003
Size 4.2615 0.8062 5.286 0.0001
School 0.6517 0.4319 1.509 0.1383

30. Referring to Table 14-4, what fraction of the variability in house size is explained by income, size of family, and
education?
a) 27.0%
b) 33.4%
c) 74.8%
d) 86.5%

ANSWER:
c


31. Referring to Table 14-4, which of the independent variables in the model are significant at the 2% level?
a) Income, Size, School
b) Income, Size
c) Size, School
d) Income, School

ANSWER:
b
KEYWORDS: t test on slope, critical value, p-value, decision, conclusion

32. Referring to Table 14-4, when the builder used a simple linear regression model with house size (House) as the
dependent variable and education (School) as the independent variable, he obtained an r
2
value of 23.0%. What
additional percentage of the total variation in house size has been explained by including family size and
income in the multiple regression?
a) 2.8%
b) 51.8%
c) 72.6%
d) 74.8%

ANSWER:
b

33. Referring to Table 14-4, which of the following values for the level of significance is the smallest, for which all
explanatory variables are significant individually?
a) 0.01
b) 0.025
c) 0.05
d) 0.15

ANSWER:
d

34. Referring to Table 14-4, which of the following values for the level of significance is the smallest, for which at
least two explanatory variables are significant individually?
a) 0.01
b) 0.025
c) 0.05
d) 0.15

ANSWER:
a

35. Referring to Table 14-4, which of the following values for the level of significance is the smallest, for which the
regression model as a whole is significant?
a) 0.00005
b) 0.001
c) 0.01
d) 0.05

ANSWER:
b

36. Referring to Table 14-4, what is the predicted house size (in hundreds of square feet) for an individual earning
an annual income of $40,000, having a family size of 4, and going to school a total of 13 years?
a) 11.43
b) 15.15
c) 24.88
d) 53.87

ANSWER:
c

37. Referring to Table 14-4, what minimum annual income would an individual with a family size of 4 and 16 years
of education need to attain a predicted 10,000 square foot home (House = 100)?
a) $44.14 thousand
b) $56.75 thousand
c) $178.33 thousand
d) $211.85 thousand

ANSWER:
d

38. Referring to Table 14-4, what minimum annual income would an individual with a family size of 9 and 10 years
of education need to attain a predicted 5,000 square foot home (House = 50)?
a) $44.14 thousand
b) $56.75 thousand
c) $178.33 thousand
d) $211.85 thousand

ANSWER:
a


39. Referring to Table 14-4, one individual in the sample had an annual income of $100,000, a family size of 10,
and an education of 16 years. This individual owned a home with an area of 7,000 square feet (House = 70.00).
What is the residual (in hundreds of square feet) for this data point?
a) 7.40
b) 2.52
c) 2.52
d) 5.40

ANSWER:
d
KEYWORDS: residual

40. Referring to Table 14-4, one individual in the sample had an annual income of $10,000, a family size of 1, and
an education of 8 years. This individual owned a home with an area of 1,000 square feet (House = 10.00). What
is the residual (in hundreds of square feet) for this data point?
a) 8.10
b) 5.40
c) 5.40
d) 8.10

ANSWER:
a
KEYWORDS: residual

41. Referring to Table 14-4, suppose the builder wants to test whether the coefficient on Income is significantly
different from 0. What is the value of the relevant t statistic?
a) 5.286
b) 5.195
c) 3.945
d) 1.509

ANSWER:
c

42. Referring to Table 14-4, at the 0.01 level of significance, what conclusion should the builder draw regarding the
inclusion of Income in the regression model?
a) Income is significant in explaining house size and should be included in the model because its p-value
is less than 0.01.
b) Income is significant in explaining house size and should be included in the model because its p-value
is more than 0.01.
c) Income is not significant in explaining house size and should not be included in the model because its p-
value is less than 0.01.
d) Income is not significant in explaining house size and should not be included in the model because its p-
value is more than 0.01.

ANSWER:
a
KEYWORDS: t test on slope, decision, conclusion

43. Referring to Table 14-4, suppose the builder wants to test whether the coefficient on School is significantly
different from 0. What is the value of the relevant t statistic?
a) 5.286
b) 5.195
c) 3.945
d) 1.509

ANSWER:
d

44. Referring to Table 14-4, what is the value of the calculated F test statistic that is missing from the output for
testing whether the whole regression model is significant?
a) 0.0001
b) 0.0299
c) 0.726
d) 33.408

ANSWER:
d
KEYWORDS: F test on the entire regression, test statistic

45. Referring to Table 14-4, the observed value of the F statistic is missing from the printout. What are the degrees
of freedom for this F statistic?
a) 45 for the numerator, 4 for the denominator
b) 4 for the numerator, 49 for the denominator
c) 45 for the numerator, 49 for the denominator
d) 4 for the numerator, 45 for the denominator

ANSWER:
d
KEYWORDS: F test on the entire regression, degrees of freedom

46. Referring to Table 14-4, at the 0.01 level of significance, what conclusion should the builder draw regarding the
inclusion of School in the regression model?

a) School is significant in explaining house size and should be included in the model because its p-value is
less than 0.01.
b) School is significant in explaining house size and should be included in the model because its p-value is
more than 0.01.
c) School is not significant in explaining house size and should not be included in the model because its p-
d) School is not significant in explaining house size and should not be included in the model because its p-

ANSWER:
d

47. Referring to Table 14-4, what are the regression degrees of freedom that are missing from the output?
a) 4
b) 45
c) 49
d) 50

ANSWER:
a
KEYWORDS: degrees of freedom

48. Referring to Table 14-4, what are the residual degrees of freedom that are missing from the output?
a) 4
b) 45
c) 49
d) 50

ANSWER:
b

TABLE 14-5

A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by
companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The
Microsoft Excel output below shows the results of this multiple regression.

SUMMARY OUTPUT

Multiple R 0.830
R Square 0.689
Observations 26

ANOVA
df SS MS F Signif F
Regression 2 15579777040 7789888520 25.432 0.0001
Residual 23 7045072780 306307512
Total 25 22624849820

Intercept 15800.0000 6038.2999 2.617 0.0154
Capital 0.1245 0.2045 0.609 0.5485
Wages 7.0762 1.4729 4.804 0.0001

49. Referring to Table 14-5, what fraction of the variability in sales is explained by spending on capital and wages?
a) 27.0%
b) 50.9%
c) 68.9%
d) 83.0%

ANSWER:
c

50. Referring to Table 14-5, which of the independent variables in the model are significant at the 5% level?
a) capital, wages
b) capital
c) wages
ANSWER:
c

51. Referring to Table 14-5, when the microeconomist used a simple linear regression model, with sales as the
dependent variable and wages as the independent variable, he obtained an r
2
value of 0.601. What additional
percentage of the total variation of sales has been explained by including capital spending in the multiple
regression?
a) 60.1%
b) 31.1%
c) 22.9%

d) 8.8%

ANSWER:
d

52. Referring to Table 14-5, what is the p-value for Wages?
a) 0.01
b) 0.05
c) 0.0001

ANSWER:
c

53. Referring to Table 14-5, what is the p-value for testing whether Wages have a positive impact on corporate
sales?
a) 0.01
b) 0.05
c) 0.0001
d) 0.00005

ANSWER:
d

54. Referring to Table 14-5, what is the p-value for testing whether Wages have a negative impact on corporate
sales?
a) 0.05
b) 0.0001
c) 0.00005
d) 0.99995

ANSWER:
d


55. Referring to Table 14-5, what is the p-value for Capital?
a) 0.01
b) 0.025
c) 0.05

ANSWER:
d

56. Referring to Table 14-5, what is the p-value for testing whether Capital has a positive influence on corporate
sales?
a) 0.025
b) 0.05
c) 0.2743
d) 0.5485

ANSWER:
c

57. Referring to Table 14-5, what is the p-value for testing whether Capital has a negative influence on corporate
sales?
a) 0.05
b) 0.2743
c) 0.5485
d) 0.7258

ANSWER:
d

58. Referring to Table 14-5, which of the following values for o is the smallest for which the regression model as a
whole is significant?
a) 0.00005
b) 0.001
c) 0.01
d) 0.05

ANSWER:
b
KEYWORDS: F test on the entire regression, p-value, interpretation


59. Referring to Table 14-5, what are the predicted sales (in millions of dollars) for a company spending $100
million on capital and $100 million on wages?
a) 15,800.00
b) 16,520.07
c) 17,277.49
d) 20,455.98

ANSWER:
b

60. Referring to Table 14-5, what are the predicted sales (in millions of dollars) for a company spending $500
million on capital and $200 million on wages?
a) 15,800.00
b) 16,520.07
c) 17,277.49
d) 20,455.98

ANSWER:
c

61. Referring to Table 14-5, one company in the sample had sales of $20 billion (Sales = 20,000). This company
spent $300 million on capital and $700 million on wages. What is the residual (in millions of dollars) for this
data point?
a) 874.55
b) 622.87
c) 790.69
d) 983.56

ANSWER:
c
KEYWORDS: residual

62. Referring to Table 14-5, one company in the sample had sales of $21.439 billion (Sales = 21,439). This
company spent $300 million on capital and $700 million on wages. What is the residual (in millions of dollars)
for this data point?
a) 790.69
b) 648.31
c) 648.31
d) 790.69

ANSWER:
b
KEYWORDS: residual

63. Referring to Table 14-5, suppose the microeconomist wants to test whether the coefficient on Capital is
significantly different from 0. What is the value of the relevant t statistic?
a) 0.609
b) 2.617
c) 4.804

d) 25.432

ANSWER:
a

64. Referring to Table 14-5, at the 0.01 level of significance, what conclusion should the microeconomist draw
regarding the inclusion of Capital in the regression model?
a) Capital is significant in explaining corporate sales and should be included in the model because its p-
b) Capital is significant in explaining corporate sales and should be included in the model because its p-
c) Capital is not significant in explaining corporate sales and should not be included in the model because
its p-value is less than 0.01.
d) Capital is not significant in explaining corporate sales and should not be included in the model because
its p-value is more than 0.01.

ANSWER:
d
KEYWORDS: t test on the slope, critical value, p-value, decision, conclusion

65. Referring to Table 14-5, the observed value of the F statistic is given on the printout as 25.432. What are the
degrees of freedom for this F statistic?
a) 25 for the numerator, 2 for the denominator
b) 2 for the numerator, 23 for the denominator
c) 23 for the numerator, 25 for the denominator
d) 2 for the numerator, 25 for the denominator

ANSWER:
b

TABLE 14-6

One of the most common questions of prospective house buyers pertains to the average cost of heating in dollars
(Y). To provide its customers with information on that matter, a large real estate firm used the following 4 variables
to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (
1
X ), the amount of
insulation in inches (
2
X ), the number of windows in the house (
3
X ), and the age of the furnace in years (
4
X ).
Given below are the Excel outputs of two regression models.

Model 1
R Square 0.8080
Observations 20
ANOVA
Regression 4 169503.4241 42375.86 15.7874 2.96869E-05
Residual 15 40262.3259 2684.155
Total 19 209765.75

Coefficients Standard Error t Stat p-value Lower 90.0% Upper 90.0%
Intercept 421.4277 77.8614 5.4125 7.2E-05 284.9327 557.9227
X
1
(Temperature) -4.5098 0.8129 -5.5476 5.58E-05 -5.9349 -3.0847
X
2
(Insulation) -14.9029 5.0508 -2.9505 0.0099 -23.7573 -6.0485
X
3
(Windows) 0.2151 4.8675 0.0442 0.9653 -8.3181 8.7484
X
4
(Furnace Age) 6.3780 4.1026 1.5546 0.1408 -0.8140 13.5702

Model 2
R Square 0.7768
Observations 20
ANOVA
df SS MS F
Significance
F
Regression 2 162958.2277 81479.11 29.5923 2.9036E-06
Residual 17 46807.5222 2753.384
Total 19 209765.75

Coefficients Standard Error t Stat p-value Lower 95% Upper 95%
Intercept 489.3227 43.9826 11.1253 3.17E-09 396.5273 582.1180
X
1
(Temperature) -5.1103 0.6951 -7.3515 1.13E-06 -6.5769 -3.6437
X
2
(Insulation) -14.7195 4.8864 -3.0123 0.0078 -25.0290 -4.4099


66. Referring to Table 14-6, the estimated value of the partial regression parameter
1
| in Model 1 means that
a) all else equal, an estimated expected $1 increase in average heating costs is associated with a decrease
in the daily minimum outside temperature by 4.51 degrees.
b) all else equal, a 1 degree increase in the daily minimum outside temperature results in a decrease in
average heating costs by $4.51.
c) all else equal, a 1 degree increase in the daily minimum outside temperature results in an estimated
expected decrease in average heating costs by $4.51.
d) all else equal, a 1% increase in the daily minimum outside temperature results in an estimated expected
decrease in average heating costs by 4.51%.

ANSWER:
c

67. Referring to Table 14-6, what can we say about Model 1?
a) The model explains 77.7% of the sample variability of average heating costs; after correcting for the
degrees of freedom, the model explains 75.1% of the sample variability of average heating costs.
b) The model explains 75.1% of the sample variability of average heating costs; after correcting for the
c) The model explains 80.8% of the sample variability of average heating costs; after correcting for the
d) The model explains 75.7% of the sample variability of average heating costs; after correcting for the

ANSWER:
c
KEYWORDS: adjusted r-square

68. Referring to Table 14-6, what is your decision and conclusion for the test
0 2 1 2
: 0 vs. : 0 H H | | = < at the
o = 0.01 level of significance using Model 1?
a) Do not reject H
0
and conclude that the amount of insulation has a linear effect on average heating costs.
b) Reject H
0
and conclude that the amount of insulation does not have a linear effect on average heating
costs.
c) Reject H
0
and conclude that the amount of insulation has a negative linear effect on average heating
costs.
d) Do not reject H
0
and conclude that the amount of insulation has a negative linear effect on average
heating costs.

ANSWER:
c

69. Referring to Table 14-6, what is the 90% confidence interval for the expected change in average heating costs as
a result of a 1 degree Fahrenheit change in the daily minimum outside temperature using Model 1?
a) [6.58, 3.65]
b) [6.24, 2.78]
c) [5.94, 3.08]
d) [2.37, 15.12]

ANSWER:
c

KEYWORDS: confidence interval, slope, interpretation

70. Referring to Table 14-6 and allowing for a 1% probability of committing a Type I error, what is the decision
and conclusion for the test
0 1 2 3 4 1
: 0 vs. : At least one 0, 1, 2, , 4
j
H H j | | | | | = = = = = =
using Model 1?
a) Do not reject H
0
and conclude that the 4 independent variables have significant individual linear effects
on average heating costs.
b) Reject H
0
and conclude that the 4 independent variables, taken as a group, have significant linear effects
on average heating costs.
c) Do not reject H
0
and conclude that the 4 independent variables, taken as a group, do not have significant
linear effects on average heating costs.
d) Reject H
0
and conclude that the 4 independent variables, taken as a group, do not have significant linear
effects on average heating costs.

ANSWER:
b
KEYWORDS: F test on the entire regression, critical value, p-value, decision, conclusion

71. Referring to Table 14-6, what is the value of the partial F test statistic for
0 3 4 1 j
: 0 vs. : At least one 0, 3, 4 H H j | | | = = = = ?
a) 0.820
b) 1.219
c) 1.382
d) 15.787

ANSWER:
b
KEYWORDS: partial F test, test statistic


72. Referring to Table 14-6, what are the degrees of freedom of the partial F test for
0 3 4 1 j
: 0 vs. : At least one 0, 3, 4 H H j | | | = = = = ?
a) 2 numerator degrees of freedom and 15 denominator degrees of freedom
b) 15 numerator degrees of freedom and 2 denominator degrees of freedom
c) 2 numerator degrees of freedom and 17 denominator degrees of freedom
d) 17 numerator degrees of freedom and 2 denominator degrees of freedom

ANSWER:
a
KEYWORDS: partial F test, degrees of freedom

73. True or False: The interpretation of the slope is different in a multiple linear regression model as compared to a
simple linear regression model.

ANSWER:
True

74. True or False: The coefficient of multiple determination r
2
Y.12
measures the proportion of variation in Y that is
explained by X
1
and X
2
.

ANSWER:
True

75. True or False: When an additional explanatory variable is introduced into a multiple regression model, the
coefficient of multiple determination will never decrease.

ANSWER:
True

76. True or False: When an additional explanatory variable is introduced into a multiple regression model, the
adjusted
2
r can never decrease.

ANSWER:
False


77. True or False: When an explanatory variable is dropped from a multiple regression model, the coefficient of
multiple determination can increase.

ANSWER:
False

78. True or False: When an explanatory variable is dropped from a multiple regression model, the adjusted
2
r can
increase.

ANSWER:
True

79. True or False: The slopes in a multiple regression model are called net regression coefficients.

ANSWER:
True
KEYWORDS: slope

80. True or False: In calculating the standard error of the estimate, S
YX
= MSE, there are n p 1 degrees of
freedom, where n is the sample size and p represents the number of independent variables in the model.

ANSWER:
True

81. True or False: The total sum of squares (SST) in a regression model will never exceed the regression sum of
squares (SSR).

ANSWER:
False
KEYWORDS: sum of squares, properties

82. True or False: The coefficient of multiple determination measures the fraction of the total variation in the
dependent variable that is explained by the regression plane.

ANSWER:
True

83. True or False: The coefficient of multiple determination is calculated by taking the ratio of the regression sum
of squares over the total sum of squares (SSR/SST) and subtracting that value from 1.

ANSWER:
False


84. True or False: In a particular model, the sum of the squared residuals was 847. If the model had 5 independent
variables, and the data set contained 40 points, the value of the standard error of the estimate is 24.911.

ANSWER:
False
KEYWORDS: sum of squares, standard error of estimate, properties

85. True or False: A multiple regression is called multiple because it has several data points.

ANSWER:
False
KEYWORDS: properties, interpretation

86. True or False: A multiple regression is called multiple because it has several explanatory variables.

ANSWER:
True
KEYWORDS: properties, interpretation

87. True or False: If we have taken into account all relevant explanatory factors, the residuals from a multiple
regression should be random.

ANSWER:
True
KEYWORDS: residual, properties

88. True or False: Multiple regression is the process of using several independent variables to predict a number of
dependent variables.

ANSWER:
False
KEYWORDS: properties

89. True or False: You have just run a regression in which the value of coefficient of multiple determination is
0.57. To determine if this indicates that the independent variables explain a significant portion of the variation
in the dependent variable, you would perform an F test.

ANSWER:
True
KEYWORDS: F test on the entire regression

90. True or False: From the coefficient of multiple determination, we cannot detect the strength of the relationship
between Y and any individual independent variable.

ANSWER:
True


91. True or False: Consider a regression in which b
2
= 1.5 and the standard error of this coefficient equals 0.3. To
determine whether X
2
is a significant explanatory variable, you would compute an observed t-value of 5.0.

ANSWER:
True

92. True or False: A regression had the following results: SST = 82.55, SSE = 29.85. It can be said that 73.4% of
the variation in the dependent variable is explained by the independent variables in the regression.

ANSWER:
False
KEYWORDS: coefficient multiple determination, sum of squares, properties


ANSWER:
True



ANSWER:
False


ANSWER:
True

TABLE 14-7

The department head of the accounting department wanted to see if she could predict the GPA of students using the
number of course units (credits) and total SAT scores of each. She takes a sample of students and generates the
following Microsoft Excel output:

SUMMARY OUTPUT

Multiple R 0.916
R Square 0.839
Observations 6

ANOVA
df SS MS F Signif F
Regression 2 0.95219 0.47610 7.813 0.0646
Residual 3 0.18281 0.06094
Total 5 1.13500

Intercept 4.593897 1.13374542 4.052 0.0271
Units 0.247270 0. 06268485 3.945 0.0290
SAT Total 0.001443 0.00101241 1.425 0.2494


96. Referring to Table 14-7, the estimate of the unit change in the mean of Y per unit change in X
1
, taking into
account the effect of X
2
, is ________.

ANSWER:
-0.247

97. Referring to Table 14-7, the net regression coefficient of X
2
is ________.

ANSWER:
0.001443

98. Referring to Table 14-7, the predicted GPA for a student carrying 15 course units and who has a total SAT score
of 1,100 is ________.

ANSWER:
2.472

99. Referring to Table 14-7, the value of the coefficient of multiple determination, r
2
Y.12
, is ________.

ANSWER:
0.839

100. Referring to Table 14-7, the value of the adjusted coefficient of multiple determination, r
2
adj, is ________.

ANSWER:
0.732

101. Referring to Table 14-7, the department head wants to test H
0
: |
1
= |
2
= 0 . The appropriate alternative
hypothesis is ________.

ANSWER:
at least one |
i
= 0 .
KEYWORDS: F test on the entire regression, form of hypothesis

0
: |
1
= |
2
= 0 . The critical value of the F test
for a level of significance of 0.05 is ________.

ANSWER:
9.55
KEYWORDS: F test on the entire regression, critical value


0
: |
1
= |
2
= 0 . The value of the F test statistic is
________.

ANSWER:
7.813

0
: |
1
= |
2
= 0 . The p-value of the test is
________.

ANSWER:
0.0646
KEYWORDS: F test on the entire regression, p-value

105. True or False: Referring to Table 14-7, the department head wants to test H
0
: |
1
= |
2
= 0 . At a level of
significance of 0.05, the null hypothesis is rejected.

ANSWER:
False
KEYWORDS: F test on the entire regression, decision

106. Referring to Table 14-7, the department head wants to use a t test to test for the significance of the coefficient
of X
1
. For a level of significance of 0.05, the critical values of the test are ________.

ANSWER:
3.1824

of X
1
. The value of the test statistic is ________.

ANSWER:
-3.945

of X
1
. The p-value of the test is ________.

ANSWER:
0.0290

109. True or False: Referring to Table 14-7, the department head wants to use a t test to test for the significance of
the coefficient of X
1
. At a level of significance of 0.05, the department head would decide that |
1
= 0.

ANSWER:
True
KEYWORDS: t test on slope, decision, conclusion

110. Referring to Table 14-7, the department head decided to obtain a 95% confidence interval for
1
. The
confidence interval is from ________ to ________.

ANSWER:
-0.4468; -0.0478
KEYWORDS: slope, confidence interval


TABLE 14-8

A financial analyst wanted to examine the relationship between salary (in $1,000) and 4 variables: age (X
1
= Age),
experience in the field (X
2
= Exper), number of degrees (X
3
= Degrees), and number of previous jobs in the field (X
4

= Prevjobs). He took a sample of 20 employees and obtained the following Microsoft Excel output:

SUMMARY OUTPUT

Multiple R 0.992
R Square 0.984
Observations 20

ANOVA
df SS MS F Signif F
Regression 4 4609.83164 1152.45791 224.160 0.0001
Residual 15 77.11836 5.14122
Total 19 4686.95000

Intercept 9.611198 2.77988638 3.457 0.0035
Age 1.327695 0.11491930 11.553 0.0001
Exper 0.106705 0.14265559 0.748 0.4660
Degrees 7.311332 0.80324187 9.102 0.0001
Prevjobs 0.504168 0.44771573 1.126 0.2778

111. Referring to Table 14-8, the estimate of the unit change in the mean of Y per unit change in X
4
, taking into
account the effects of the other 3 variables, is ________.

ANSWER:
-0.504

112. Referring to Table 14-8, the net regression coefficient of X
2
is ________.

ANSWER:
-0.107

113. Referring to Table 14-8, the predicted salary for a 35-year-old person with 10 years of experience, 3 degrees,
and 1 previous job is ________.

ANSWER:
57.2

114. Referring to Table 14-8, the value of the coefficient of multiple determination, r
2
Y.1234
, is ________.

ANSWER:
0.984


115. Referring to Table 14-8, the value of the adjusted coefficient of multiple determination, adj r
2
, is ________.

ANSWER:
0.979

116. Referring to Table 14-8, the analyst wants to use an F test to test H
0
: |
1
= |
2
= |
3
= |
4
= 0. The
appropriate alternative hypothesis is ________.

ANSWER:
at least one |
i
= 0 .

117. Referring to Table 14-8, the critical value of an F test on the entire regression for a level of significance of
0.01 is ________.

ANSWER:
4.89
KEYWORDS: F test on the entire regression, critical value

118. Referring to Table 14-8, the value of the F statistic for testing the significance of the entire regression is
________.

ANSWER:
224.160


119. Referring to Table 14-8, the p-value of the F test for the significance of the entire regression is ________.

ANSWER:
0.0001

120. True or False: Referring to Table 14-8, the F test for the significance of the entire regression performed at a
level of significance of 0.01 leads to a rejection of the null hypothesis.

ANSWER:
True

121. Referring to Table 14-8, the analyst wants to use a t test to test for the significance of the coefficient of X
3
. For
a level of significance of 0.01, the critical values of the test are ________.

ANSWER:
2.9467
KEYWORDS: t test on the slope, critical value

3
.
The value of the test statistic is ________.

ANSWER:
9.102
KEYWORDS: t test on the slope, test statistic

3
.
The p-value of the test is ________.

ANSWER:
0.0001
KEYWORDS: t test on the slope, p-value

124. True or False: Referring to Table 14-8, the analyst wants to use a t test to test for the significance of the
coefficient of X
3
. At a level of significance of 0.01, the department head would decide that |
3
= 0 .

ANSWER:
True
KEYWORDS: t test on the slope, decision, conclusion


125. Referring to Table 14-8, the analyst decided to obtain a 99% confidence interval for |
3
. The confidence
interval is from ________ to ________.

ANSWER:
4.944; 9.678
KEYWORDS: slope, confidence interval

TABLE 14-9

You decide to predict gasoline prices in different cities and towns in the United States for your term project. Your
dependent variable is price of gasoline per gallon and your explanatory variables are per capita income, the number
of firms that manufacture automobile parts in and around the city, the number of new business starts in the last year,
population density of the city, percentage of local taxes on gasoline, and the number of people using public
transportation. You collect data of 32 cities and obtain a regression sum of squares SSR= 122.8821. Your computed
value of standard error of the estimate is 1.9549.

126. Referring to Table 14-9, what is the value of the coefficient of multiple determination?
a) 0.2225
b) 0.4576
c) 0.5626
d) 0.6472

ANSWER:
c

127. Referring to Table 14-9, the value of adjusted
2
r is
a) 0.4576.
b) 0.5626.
c) 0.6472.
d) 95.5414.

ANSWER:
a


128. Referring to Table 14-9, if variables that measure the number of new business starts in the last year and
population density of the city are removed from the multiple regression model, which of the following is true?
a) The adjusted
2
r will definitely increase.
b) The adjusted
2
r can never increase.
c) The coefficient of multiple determination can never increase.
d) The coefficient of multiple determination will definitely increase.

ANSWER:
c
KEYWORDS: coefficient of multiple determination, adjusted r-square, properties

TABLE 14-10

You worked as an intern at We Always Win Car Insurance Company last summer. You notice that individual car
insurance premiums depend very much on the age of the individual, the number of traffic tickets received by the
individual, and the population density of the city in which the individual lives. You performed a regression analysis
in Excel and obtained the following information:

Regression Analysis

Multiple R 0.63
R Square 0.40
Observations 15.00

ANOVA
Regression 3 5994.24 2.40 0.12
Residual 11 27496.82
Total 45479.54

Coefficients Standard
Error
t Stat p-value Lower 99.0% Upper 99.0%
Intercept 123.80 48.71 2.54 0.03 -27.47 275.07
AGE -0.82 0.87 -0.95 0.36 -3.51 1.87
TICKETS 21.25 10.66 1.99 0.07 -11.86 54.37
DENSITY -3.14 6.46 -0.49 0.64 -23.19 16.91


129. Referring to Table 14-10, the portion of the total variability in insurance premiums that can be explained by
AGE, TICKETS, and DENSITY is _________.

ANSWER:
0.40

130. Referring to Table 14-10, the adjusted
2
r is _________.

ANSWER:
0.23

131. Referring to Table 14-10, the standard error of the estimate is _________.

ANSWER:
50.0

132. Referring to Table 14-10, the estimated average change in insurance premium for every 10 additional tickets
received is _____.

ANSWER:
212.5

133. Referring to Table 14-10, the 99% confidence interval for the change in average insurance premium of a
person who has become 1 year older (i.e., the slope coefficient for AGE) is _________.

ANSWER:
-0.82 2.69
KEYWORDS: slope, interpretation, confidence interval

134. Referring to Table 14-10, the total degrees of freedom that are missing in the ANOVA table should be
______.

ANSWER:
14


135. Referring to Table 14-10, the regression sum of squares that is missing in the ANOVA table should be
______.

ANSWER:
17,982.72

136. Referring to Table 14-10, the residual mean squares (MSE) that are missing in the ANOVA table should be
_____.

ANSWER:
2,499.71
KEYWORDS: mean squares

137. Referring to Table 14-10, to test the significance of the multiple regression model, what is the form of the null
hypothesis?
a)
0 0
: H |
b)
0 1
: H |
c)
0 1 2 3
: H | | | = =
d)
0 0 1 2 3
: H | | | | = = =

ANSWER:
c

138. Referring to Table 14-10, to test the significance of the multiple regression model, the value of the test
statistic is ______.

ANSWER:
2.40

139. Referring to Table 14-10, to test the significance of the multiple regression model, the p-value of the test
statistic in the sample is ______.

ANSWER:
0.12


140. Referring to Table 14-10, to test the significance of the multiple regression model, what are the degrees of
freedom?

ANSWER:
3 for the numerator, 11 for the denominator

141. True or False: Referring to Table 14-10, to test the significance of the multiple regression model, the null
hypothesis should be rejected, while allowing for a 1% probability of committing a Type I error.

ANSWER:
False

142. True or False: Referring to Table 14-10, the multiple regression model is significant at a 10% level of
significance.

ANSWER:
False
KEYWORDS: F test on the entire regression, decision, conclusion

TABLE 14-11

A logistic regression model was estimated in order to predict the probability that a randomly chosen university or
college would be a private university using information on average total Scholastic Aptitude Test score (SAT) at the
university or college, the room and board expense measured in thousands of dollars (Room/Brd), and whether the
TOEFL criterion is at least 550 (Toefl550 = 1 if yes, 0 otherwise.) The dependent variable, Y, is school type (Type
= 1 if private and 0 otherwise).

The Minitab output is given below:

Logistic Regression Table
Odds 95% CI
Predictor Coef SE Coef Z P Ratio Lower Upper
Constant -27.118 6.696 -4.05 0.000
SAT 0.015 0.004666 3.17 0.002 1.01 1.01 1.02
Toefl550 -0.390 0.9538 -0.41 0.682 0.68 0.10 4.39
Room/Brd 2.078 0.5076 4.09 0.000 7.99 2.95 21.60

Log-Likelihood = -21.883
Test that all slopes are zero: G = 62.083, DF = 3, P-Value = 0.000

Goodness-of-Fit Tests

Method Chi-Square DF P
Pearson 143.551 76 0.000
Deviance 43.767 76 0.999
Hosmer-Lemeshow 15.731 8 0.046


143. Referring to Table 14-11, which of the following is the correct expression for the estimated model?
a) 27.118 0.015 0.390 550 2.078 / Y SAT Toefl Room Brd = + +
b)
27.118 0.015 0.390 550 2.078 / Y SAT Toefl Room Brd = + +

c)
( ) ln odds ratio 27.118 0.015 0.390 550 2.078 / SAT Toefl Room Brd = + +
d)
( ) ln estimated odds ratio 27.118 0.015 0.390 550 2.078 / SAT Toefl Room Brd = + +

ANSWER:
d
KEYWORDS: logistic regression, estimation

144. Referring to Table 14-11, what is the estimated odds ratio for a school with an average SAT score of 1250, a
TOEFL criterion that is at least 550, and a room and board expense of 5 thousand dollars?

ANSWER:
5.114
KEYWORDS: logistic regression, odds ratio, estimation

145. Referring to Table 14-11, what is the estimated probability that a school with an average SAT score of 1250, a
TOEFL criterion that is at least 550, and a room and board expense of 5 thousand dollars will be a private
school?

ANSWER:
0.836

146. Referring to Table 14-11, what is the estimated odds ratio for a school with an average SAT score of 1100, a
TOEFL criterion that is not at least 550, and a room and board expense of 7 thousand dollars?

ANSWER:
50.805

147. Referring to Table 14-11, what is the estimated probability that a school with an average SAT score of 1100, a
TOEFL criterion that is not at least 550, and a room and board expense of 7 thousand dollars will be a private
school?

ANSWER:
0.981


148. Referring to Table 14-11, which of the following is the correct interpretation for the SAT slope coefficient?
a) Holding constant the effect of the other variables, the estimated average value of school type increases
by 0.015 for each increase of one point in average SAT score.
b) Holding constant the effect of the other variables, the estimated school type increases by 0.015 for each
increase of one point in average SAT score.
c) Holding constant the effect of the other variables, the estimated probability of the school being a private
school increases by 0.015 for each increase of one point in average SAT score.
d) Holding constant the effect of the other variables, the estimated natural logarithm of the odds ratio of
the school being a private school increases by 0.015 for each increase of one point in average SAT
score.

ANSWER:
d
KEYWORDS: logistic regression, slope, interpretation

149. Referring to Table 14-11, which of the following is the correct interpretation for the Toefl500 slope
coefficient?
a) Holding constant the effect of the other variables, the estimated average value of school type is 0.39
lower when the school has a TOEFL criterion that is at least 550.
b) Holding constant the effect of the other variables, the estimated school type decreases by 0.39 when the
school has a TOEFL criterion that is at least 550.
c) Holding constant the effect of the other variables, the estimated natural logarithm of the odds ratio of
the school being a private school is 0.39 lower for a school that has a TOEFL criterion that is at least
550 than one that does not.
d) Holding constant the effect of the other variables, the estimated probability of the school being a private
school is 0.39 lower for a school that has a TOEFL criterion that is at least 550 than one that does not.

ANSWER:
c
KEYWORDS: logistic regression, slope, interpretation

150. Referring to Table 14-11, what are the degrees of freedom for the chi-square distribution when testing
whether the model is a good-fitting model?

ANSWER:
76
KEYWORDS: logistic regression, deviance statistic, degrees of freedom

151. Referring to Table 14-11, what is the p-value of the test statistic when testing whether the model is a good-
fitting model?

ANSWER:
0.999
KEYWORDS: logistic regression, deviance statistic, p-value

152. True or False: Referring to Table 14-11, the null hypothesis that the model is a good-fitting model cannot be
rejected when allowing for a 5% probability of making a Type I error.

ANSWER:
True

KEYWORDS: logistic regression, deviance statistic, decision

153. True or False: Referring to Table 14-11, there is not enough evidence to conclude that the model is not a
good-fitting model at a 0.05 level of significance.

ANSWER:
True
KEYWORDS: logistic regression, deviance statistic, conclusion

154. Referring to Table 14-11, what is the p-value of the test statistic when testing whether SAT makes a
significant contribution to the model in the presence of the other independent variables?

ANSWER:
0.002
KEYWORDS: logistic regression, Wald statistic, p-value

155. Referring to Table 14-11, what should be the decision (reject or do not reject) on the null hypothesis when
testing whether SAT makes a significant contribution to the model in the presence of the other independent
variables at a 0.05 level of significance?

ANSWER:
Reject
KEYWORDS: logistic regression, Wald statistic, decision

156. True or False: Referring to Table 14-11, there is not enough evidence to conclude that SAT makes a
significant contribution to the model in the presence of the other independent variables at a 0.05 level of
significance.

ANSWER:
False
TYPE: TF DIFFICULTY: moderate
KEYWORDS: logistic regression, Wald statistic, conclusion


157. Referring to Table 14-11, what is the p-value of the test statistic when testing whether Toefl500 makes a
significant contribution to the model in the presence of the other independent variables?

ANSWER:
0.682
KEYWORDS: logistic regression, Wald statistic, p-value

158. Referring to Table 14-11, what should be the decision (reject or do not reject) on the null hypothesis when
testing whether Toefl500 makes a significant contribution to the model in the presence of the other independent
variables at a 0.05 level of significance?

ANSWER:
Do not reject
KEYWORDS: logistic regression, Wald statistic, decision

159. True or False: Referring to Table 14-11, there is not enough evidence to conclude that Toefl500 makes a
significant contribution to the model in the presence of the other independent variables at a 0.05 level of
significance.

ANSWER:
True
TYPE: TF DIFFICULTY: moderate
KEYWORDS: logistic regression, Wald statistic, conclusion

160. If a categorical independent variable contains 2 categories, then _________ dummy variable(s) will be needed
to uniquely represent these categories.
a) 1
b) 2
c) 3
d) 4

ANSWER:
a
KEYWORDS: dummy variable, properties

161. If a categorical independent variable contains 4 categories, then _________ dummy variable(s) will be needed
to uniquely represent these categories.
a) 1
b) 2
c) 3
d) 4

ANSWER:
c

162. A dummy variable is used as an independent variable in a regression model when
a) the variable involved is numerical.
b) the variable involved is categorical.
c) a curvilinear relationship is suspected.
d) when 2 independent variables interact.

ANSWER:
b

163. An interaction term in a multiple regression model may be used when
a) the coefficient of determination is small.
b) there is a curvilinear relationship between the dependent and independent variables.
c) neither one of 2 independent variables contribute significantly to the regression model.
d) the relationship between X
1
and Y changes for differing values of X
2
.

ANSWER:
d
KEYWORDS: interaction, properties

164. To explain personal consumption (CONS) measured in dollars, data is collected for

INC: personal income in dollars
CRDTLIM: $1 plus the credit limit in dollars available to the individual
APR: average annualized percentage interest rate for borrowing for the individual
ADVT: per person advertising expenditure in dollars by manufacturers in the city where
the individual lives
SEX: gender of the individual; 1 if female, 0 if male

A regression analysis was performed with CONS as the dependent variable and ln(CRDTLIM), ln(APR),
ln(ADVT), and SEX as the independent variables. The estimated model was

2.28- 0.29 ln(CRDTLIM) 5.77 ln(APR) 2.35 ln(ADVT) 0.39 SEX y = + + +

What is the correct interpretation for the estimated coefficient for SEX?
a) Holding everything else fixed, personal consumption for females is estimated to be $0.39 higher than
males, on the average.
b) Holding everything else fixed, personal consumption for males is estimated to be $0.39 higher than
females, on the average.
c) Holding everything else fixed, personal consumption for females is estimated to be 0.39% higher than
males, on the average.
d) Holding everything else fixed, personal consumption for males is estimated to be 0.39% higher than
females, on the average.

ANSWER:
a
KEYWORDS: dummy variable, slope, interpretation

TABLE 14-12


A weight loss clinic wants to use regression analysis to build a model for the weight loss of a client (measured in
pounds). Two variables thought to affect weight loss are clients length of time on the weight loss program and time
of session. These variables are described below:
Y = Weight loss (in pounds)
X
1
= Length of time in weight loss program (in months)
X
2
= 1 if morning session, 0 if not
X
3
= 1 if afternoon session, 0 if not (Base level = evening session)
Data for 12 clients on a weight loss program at the clinic were collected and used to fit the interaction model:
Y = |
0
+ |
1
X
1
+ |
2
X
2
+ |
3
X
3
+ |
4
X
1
X
2
+ |
5
X
1
X
3
+ c

Partial output from Microsoft Excel follows:

Multiple R 0.73514
R Square 0.540438
Observations 12

ANOVA
F = 5.41118 Significance F = 0.040201

Intercept 0.089744 14.127 0.0060 0.9951
Length (X
1
) 6.22538 2.43473 2.54956 0.0479
Morn Ses (X
2
) 2.217272 22.1416 0.100141 0.9235
Aft Ses (X
3
) 11.8233 3.1545 3.558901 0.0165
Length*Morn Ses 0.77058 3.562 0.216334 0.8359
Length*Aft Ses 0.54147 3.35988 0.161158 0.8773

165. Referring to Table 14-12, what is the experimental unit for this analysis?
a) a clinic
b) a client on a weight loss program
c) a month
d) a morning, afternoon, or evening session

ANSWER:
b
KEYWORDS: model building


166. Referring to Table 14-12, what null hypothesis would you test to determine whether the slope of the linear
relationship between weight loss (Y) and time in the program (X
1
) varies according to time of session?
a) H
0
: |
1
= |
2
= |
3
= |
4
= |
5
= 0
b) H
0
: |
2
= |
3
= |
4
= |
5
= 0
c) H
0
: |
4
= |
5
= 0
d) H
0
: |
2
= |
3
= 0

ANSWER:
c
KEYWORDS: interaction, form of hypothesis

167. Referring to Table 14-12, in terms of the | 's in the model, give the average change in weight loss (Y) for
every 1 month increase in time in the program (X
1
) when attending the evening session.
a) |
1
+ |
4

b) |
1
+ |
5

c) |
1

d) |
4
+ |
5

ANSWER:
c
KEYWORDS: interaction, slope, interpretation

1
) when attending the morning session.
a) |
1
+ |
4

b) |
1
+ |
5

c) |
1

d) |
4
+ |
5

ANSWER:
a


1
) when attending the afternoon session.
a) |
1
+ |
4

b) |
1
+ |
5

c) |
1

d) |
4
+ |
5

ANSWER:
b

170. True or False: Referring to Table 14-12, the overall model for predicting weight loss (Y) is statistically
significant at the 0.05 level.

ANSWER:
True
KEYWORDS: interaction, F test on the entire regression, decision, conclusion

171. Referring to Table 14-12, which of the following statements is supported by the analysis shown?
a) There is sufficient evidence (at o = 0.05) of curvature in the relationship between weight loss (Y) and
months in program(X
1
).
b) There is sufficient evidence (at o = 0.05) to indicate that the relationship between weight loss (Y) and
months in program (X
1
) depends on session time.
c) There is sufficient evidence (at o = 0.10) to indicate that the session time (morning, afternoon,
evening) affects weight loss (Y).
d) There is insufficient evidence (at o = 0.10) to indicate that the relationship between weight loss (Y) and
months in program(X
1
) depends on session time.

ANSWER:
d
KEYWORDS: interaction, t test on slope, decision, conclusion

172. In a multiple regression model, the adjusted
2
r
a) cannot be negative.
b) can sometimes be negative.
c) can sometimes be greater than +1.
d) has to fall between 0 and +1.

ANSWER:
b


TABLE 14-13

As a project for his business statistics class, a student examined the factors that determined parking meter rates
throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and
one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus.
The population regression model hypothesized is
1 1 2 2 3 3 i i i i i
Y x x x o | | | c = + + + +
where
Y is the meter price
x
1
is the number of blocks to the quad
x
2
is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0
otherwise
x
3
is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the
value 0 otherwise

The following Excel results are obtained:

Multiple R 0.9659
R Square 0.9331
Observations 58
ANOVA
Df SS MS F Significance F
Regression 3 0.8094 0.2698 251.1995 1.0964E-31
Residual 54 0.0580 0.0010
Total 57 0.8675

Coefficient
s Standard Error t Stat p-value
Intercept 0.5118 0.0136 37.4675 2.4904
X
1
-0.0045 0.0034 -1.3276 0.1898
X
2
-0.2392 0.0123 -19.3942 5.3581E-26
X
3
-0.0002 0.0123 -0.0214 0.9829


173. Referring to Table 14-13, what is the correct interpretation for the estimated coefficient for
2
x ?
a) All else equal, the estimated average difference in costs between parking on campus, and parking
outside of downtown and off campus, is $0.24 per hour.
b) All else equal, the estimated average difference in costs between parking in downtown and off campus,
and parking on campus, is $0.24 per hour.
c) All else equal, the estimated average difference in costs between parking in downtown and off campus,
and parking outside of downtown and off campus, is $0.24 per hour.
d) All else equal, the estimated average difference in costs between parking in downtown and off campus,
and parking either outside of downtown and off campus or on campus, is $0.24 per hour.

ANSWER:
b

174. Referring to Table 14-13, predict the meter rate per hour if one parks outside of downtown and off campus 3
blocks from the quad.
a) $0.0139
b) $0.2589
c) $0.2604
d) $0.4981

ANSWER:
d

175. Referring to Table 14-13, if one is already outside of downtown and off campus but decides to park 3 more
blocks from the quad, the estimated average parking meter rate will
a) decrease by 0.0045.
b) decrease by 0.0135.
c) decrease by 0.0139.
d) decrease by 0.4979.

ANSWER:
b

176. True or False: An interaction term in a multiple regression model may be used when the relationship between
X
1
and Y changes for differing values of X
2
.

ANSWER:
True
KEYWORDS: interaction, properties

177. True or False: When a dummy variable is included in a multiple regression model, the interpretation of the
estimated slope coefficient does not make any sense anymore.

ANSWER:
False


178. True or False: In trying to obtain a model to estimate grades on a statistics test, a professor wanted to include,
among other factors, whether the person had taken the course previously. To do this, the professor included a
dummy variable in her regression that was equal to 1 if the person had previously taken the course, and 0
otherwise. The interpretation of the coefficient associated with this dummy variable would be the average
amount the repeat students tended to be above or below non-repeaters, with all other factors the same.

ANSWER:
True

TABLE 14-14

An econometrician is interested in evaluating the relation of demand for building materials to mortgage rates in Los
Angeles and San Francisco. He believes that the appropriate model is

Y = 10 + 5X
1
+ 8X
2

where X
1
= mortgage rate in %
X
2
= 1 if SF, 0 if LA
Y = demand in $100 per capita

179. Referring to Table 14-14, holding constant the effect of city, each additional increase of 1% in the mortgage
rate would lead to an estimated increase of ________ in the mean demand.

ANSWER:
$500 per capita

180. Referring to Table 14-14, the effect of living in San Francisco rather than Los Angeles is to increase the mean
demand by an estimated ________.

ANSWER:
$800 per capita


181. Referring to Table 14-14, the predicted demand in Los Angeles when the mortgage rate is 8% is ________.

ANSWER:
$5,000 per capita
KEYWORDS: prediction of individual values, dummy variable

182. Referring to Table 14-14, the predicted demand in San Francisco when the mortgage rate is 10% is ________.

ANSWER:
$6,800 per capita

183. Referring to Table 14-14, the fitted model for predicting demand in Los Angeles is ________.
a) 10 + 5X
1

b) 10 + 13X
1

c) 15 + 8X
2

d) 18 + 5X
2

ANSWER:
a

184. Referring to Table 14-14, the fitted model for predicting demand in San Francisco is ________.
a) 10 + 5X
1

b) 10 + 13X
1

c) 15 + 8X
2

d) 18 + 5X
1

ANSWER:
d


TABLE 14-15

An automotive engineer would like to be able to predict automobile mileages. She believes that the 2 most
important characteristics that affect mileage are horsepower and the number of cylinders (4 or 6) of a car. She
believes that the appropriate model is
Y = 40 0.05X
1
+ 20X
2
0.1X
1
X
2

where X
1
= horsepower
X
2
= 1 if 4 cylinders, 0 if 6 cylinders
Y = mileage

185. Referring to Table 14-15, the predicted mileage for a 300 horsepower, 6-cylinder car is ________.

ANSWER:
25

186. Referring to Table 14-15, the predicted mileage for a 200 horsepower, 4-cylinder car is ________.

ANSWER:
30

187. Referring to Table 14-15, the fitted model for predicting mileages for 6-cylinder cars is ________.
a) 40 0.05X
1

b) 40 0.10X
1

c) 60 0.10X
1

d) 60 0.15X
1

ANSWER:
a

188. Referring to Table 14-15, the fitted model for predicting mileages for 4-cylinder cars is ________.
a) 40 0.05X
1

b) 40 0.10X
1

c) 60 0.10X
1

d) 60 0.15X
1

ANSWER:
d


CHAPTER 15: MULTIPLE REGRESSION
MODEL BUILDING

189. A real estate builder wishes to determine how house size (House) is influenced by family income
(Income), family size (Size), and education of the head of household (School). House size is measured in
hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. The
builder randomly selects 50 families and runs the multiple regression. The business literature involving human
capital shows that education influences an individuals annual income. Combined, these may influence family
size. With this in mind, what should the real estate builder be particularly concerned with when analyzing the
multiple regression model?
a) randomness of error terms
b) collinearity
c) normality of residuals
d) missing observations

ANSWER:
b
KEYWORDS: collinearity, assumption

190. A microeconomist wants to determine how corporate sales are influenced by capital and wage spending
by companies. She proceeds to randomly select 26 large corporations and record information in millions of
dollars. A statistical analyst discovers that capital spending by corporations has a significant inverse relationship
with wage spending. What should the microeconomist who developed this multiple regression model be
particularly concerned with?
a) randomness of error terms
b) collinearity
c) normality of residuals
d) missing observations

ANSWER:
b
KEYWORDS: collinearity, assumption

191. In multiple regression, the __________ procedure permits variables to enter and leave the model at
different stages of its development.
a) forward selection
b) residual analysis
c) backward elimination
d) stepwise regression

ANSWER:
d
KEYWORDS: stepwise regression, model building


192. A regression diagnostic tool used to study the possible effects of collinearity is
a) the slope.
b) the Y intercept.
c) the VIF.
d) the standard error of the estimate.

ANSWER:
c
KEYWORDS: variance inflationary factor, collinearity

193. Which of the following is not used to find a "best" model?
a) adjusted r
2

b) Mallow's C
p

c) odds ratio
d) all of the above

ANSWER:
c
KEYWORDS: model building

194. The Variance Inflationary Factor (VIF) measures the
a) correlation of the X variables with the Y variable.
b) correlation of the X variables with each other.
c) contribution of each X variable with the Y variable after all other X variables are included in the model.
d) standard deviation of the slope.

ANSWER:
b

195. The
p
C statistic is used
a. to determine if there is a problem of collinearity.
b. if the variances of the error terms are all the same in a regression model.
c. to choose the best model.
d. to determine if there is an irregular component in a time series.

ANSWER:
c
KEYWORDS: C-p statistic, model building


TABLE 15-1

To explain personal consumption (CONS) measured in dollars, data is collected for

INC: personal income in dollars
CRDTLIM: $1 plus the credit limit in dollars available to the individual
APR: average annualized percentage interest rate for borrowing for the individual
ADVT: per person advertising expenditure in dollars by manufacturers in the city where
the individual lives
SEX: gender of the individual; 1 if female, 0 if male

A regression analysis was performed with CONS as the dependent variable and ln(CRDTLIM), ln(APR),
ln(ADVT), and SEX as the independent variables. The estimated model was

2.28- 0.29 ln(CRDTLIM) 5.77 ln(APR) 2.35 ln(ADVT) 0.39 SEX y = + + +

196. Referring to Table 15-1, what is the correct interpretation for the estimated coefficient for ADVT?
a) A $1 increase in per person advertising expenditure by the manufacturer will result in an estimated
average increase of $2.35 on personal consumption, holding other variables constant.
b) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated
average increase of $2.35 on personal consumption, holding other variables constant.
c) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated
average increase of 2.35% on personal consumption, holding other variables constant.
d) A 1% increase in per person advertising expenditure by the manufacturer will result in an estimated
average increase of 2.35% on personal consumption, holding other variables constant.

ANSWER:
b
KEYWORDS: transformation, slope, interpretation


197. Referring to Table 15-1, what is the correct interpretation for the estimated coefficient for APR?
a) A one percentage point increase in average annualized percentage interest rate will result in an
estimated average increase of $5.77 on personal consumption, holding other variables constant.
b) A 100% increase in average annualized percentage interest rate will result in an estimated average
increase of 5.77% on personal consumption, holding other variables constant.
c) A 100% increase in average annualized percentage interest rate will result in an estimated average
increase of $5.77 on personal consumption, holding other variables constant.
d) A 1% increase in average annualized percentage interest rate will result in an estimated average
increase of 5.77% on personal consumption, holding other variables constant.

ANSWER:
c
KEYWORDS: transformation, slope, interpretation

TABLE 15-2

A certain type of rare gem serves as a status symbol for many of its owners. In theory, for low prices, the demand
decreases as the price of the gem increases. However, experts hypothesize that when the gem is valued at very high
prices, the demand increases with price due to the status owners believe they will gain by obtaining the gem. Thus,
the model proposed to best explain the demand for the gem by its price is the quadratic model:
Y = |
0
+|
1
X+|
2
X
2
+c
where Y = demand (in thousands) and X = retail price per carat.

This model was fit to data collected for a sample of 12 rare gems of this type. A portion of the computer analysis
obtained from Microsoft Excel is shown below:

SUMMARY OUTPUT

Multiple R 0.994
R Square 0.988
Observations 12

ANOVA
df SS MS F Signif F
Regression 2 115145 57573 373 0.0001
Residual 9 1388 154
Total 11 116533

Intercept 286.42 9.66 29.64 0.0001
Price 0.31 0.06 5.14 0.0006
Price Sq 0.000067 0.00007 0.95 0.3647

198. Referring to Table 15-2, what is the value of the test statistic for testing whether there is an upward
curvature in the response curve relating the demand (Y) and the price (X)?
a) -5.14
b) 0.95
c) 373

ANSWER:
b

KEYWORDS: quadratic regression, t test on slope, test statistic

199. Referring to Table 15-2, what is the p-value associated with the test statistic for testing whether there is
an upward curvature in the response curve relating the demand (Y) and the price (X)?
a) 0.0001
b) 0.0006
c) 0.3647

ANSWER:
c
KEYWORDS: quadratic regression, t test on slope, p-value

200. Referring to Table 15-2, what is the correct interpretation of the coefficient of multiple determination?
a) 98.8% of the total variation in demand can be explained by the linear relationship between demand and
price.
b) 98.8% of the total variation in demand can be explained by the quadratic relationship between demand
and price.
c) 98.8% of the total variation in demand can be explained by the addition of the square term in price.
d) 98.8% of the total variation in demand can be explained by just the square term in price.

ANSWER:
b


201. Referring to Table 15-2, does there appear to be significant upward curvature in the response curve
relating the demand (Y) and the price (X) at 10% level of significance?
a) Yes, since the p-value for the test is less than 0.10.
b) No, since the value of |
2
is near 0.
c) No, since the p-value for the test is greater than 0.10.
d) Yes, since the value of |
2
is positive.

ANSWER:
c
KEYWORDS: quadratic regression, t test on slope, decision, conclusion

202. True or False: Referring to Table 15-2, a more parsimonious simple linear model is likely to be
statistically superior to the fitted curvilinear for predicting sale price (Y).

ANSWER:
True
KEYWORDS: quadratic regression, t test on slope, interpretation


TABLE 15-3

In Hawaii, condemnation proceedings are underway to enable private citizens to own the property that their homes
are built on. Until recently, only estates were permitted to own land, and homeowners leased the land from the
estate. In order to comply with the new law, a large Hawaiian estate wants to use regression analysis to estimate the
fair market value of the land. Each of the following 3 models were fit to data collected for n = 20 properties, 10 of
which are located near a cove.
Model 1: Y = |
0
+|
1
X
1
+|
2
X
2
+|
3
X
1
X
2
+|
4
X
1
2
+|
5
X
1
2
X
2
+c
where Y = Sale price of property in thousands of dollars
X
1
= Size of property in thousands of square feet
X
2
= 1 if property located near cove, 0 if not
Using the data collected for the 20 properties, the following partial output obtained from Microsoft Excel is shown:

SUMMARY OUTPUT

Multiple R 0.985
R Square 0.970
Standard Error 9.5
Observations 20

ANOVA
df SS MS F Signif F
Regression 5 28324 5664 62.2 0.0001
Residual 14 1279 91
Total 19 29063

Intercept 32.1 35.7 0.90 0.3834
Size 12.2 5.9 2.05 0.0594
Cove 104.3 53.5 1.95 0.0715
Size*Cove 17.0 8.5 1.99 0.0661
SizeSq 0.3 0.2 1.28 0.2204
SizeSq*Cove 0.3 0.3 1.13 0.2749

203. Referring to Table 15-3, is the overall model statistically adequate at a 0.05 level of significance for
predicting sale price (Y)?
a) No, since some of the t tests for the individual variables are not significant.
b) No, since the standard deviation of the model is fairly large.
c) Yes, since none of the | -estimates are equal to 0.
d) Yes, since the p-value for the test is smaller than 0.05.

ANSWER:
d
KEYWORDS: F test on the entire regression, p-value, decision, conclusion


204. Referring to Table 15-3, given a quadratic relationship between sale price (Y) and property size (X
1
),
what null hypothesis would you test to determine whether the curves differ from cove and non-cove properties?
a) H
0
: |
2
= |
3
= |
5
= 0
b) H
0
: |
4
= |
5
= 0
c) H
0
: |
3
= |
5
= 0
d) H
0
: |
2
= 0

ANSWER:
c
KEYWORDS: interaction, partial F test, form of hypothesis

205. Referring to Table 15-3, given a quadratic relationship between sale price (Y) and property size (X
1
),
what test should be used to test whether the curves differ from cove and non-cove properties?
a) F test for the entire regression model.
b) t test on each of the coefficients in the entire regression model.
c) Partial F test on the subset of the appropriate coefficients.
d) t test on each of the subsets of the appropriate coefficients.

ANSWER:
c
KEYWORDS: interaction, partial F test, interpretation

206. If a group of independent variables are not significant individually, but are significant as a group at a
specified level of significance, this is most likely due to
a) autocorrelation.
b) the presence of dummy variables.
c) the absence of dummy variables.
d) collinearity.

ANSWER:
d
KEYWORDS: collinearity, assumption, properties


207. As a project for his business statistics class, a student examined the factors that determined parking
meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the
quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of
downtown and off campus. The population regression model hypothesized is
0 1 1 2 2 3 3 i i i i i
Y x x x | | | | c = + + + +
where
Y is the meter price
x
1
is the number of blocks to the quad
x
2
is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0
otherwise
x
3
is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and
the value 0 otherwise

Suppose that whether the meter is located on campus is an important explanatory factor. Why should the variable
that depicts this attribute not be included in the model?
a) Its inclusion will introduce autocorrelation.
b) Its inclusion will introduce collinearity.
c) Its inclusion will inflate the standard errors of the estimated coefficients.
d) both (b) and (c)

ANSWER:
d
KEYWORDS: dummy variable, collinearity, properties

208. True or False: The Variance Inflationary Factor (VIF) measures the correlation of the X variables with
the Y variable.

ANSWER:
False

209. True or False: Collinearity is present when there is a high degree of correlation between independent
variables.

ANSWER:
True
KEYWORDS: collinearity

210. True or False: Collinearity is present when there is a high degree of correlation between the dependent
variable and any of the independent variables.

ANSWER:
False
KEYWORDS: collinearity, properties

211. True or False: A high value of R
2
significantly above 0 in multiple regression, accompanied by
insignificant t-values on all parameter estimates, very often indicates a high correlation between independent
variables in the model.

ANSWER:
True

212. True or False: One of the consequences of collinearity in multiple regression is inflated standard errors
in some or all of the estimated slope coefficients.

ANSWER:
True

213. True or False: One of the consequences of collinearity in multiple regression is biased estimates on the
slope coefficients.

ANSWER:
False

214. True or False: Collinearity is present if the dependent variable is linearly related to one of the
explanatory variables.

ANSWER:
False

215. True or False: Collinearity will result in excessively low standard errors of the parameter estimates
reported in the regression output.

ANSWER:
False

216. True or False: The parameter estimates are biased when collinearity is present in a multiple regression
equation.

ANSWER:
False


217. True or False: Two simple regression models were used to predict a single dependent variable. Both
models were highly significant, but when the two independent variables were placed in the same multiple
regression model for the dependent variable, R
2
did not increase substantially and the parameter estimates for
the model were not significantly different from 0. This is probably an example of collinearity.

ANSWER:
True

218. True or False: So that we can fit curves as well as lines by regression, we often use mathematical
manipulations for converting one variable into a different form. These manipulations are called dummy
variables.

ANSWER:
False
KEYWORDS: quadratic regression, transformation

TABLE 15-4

A chemist employed by a pharmaceutical firm has developed a muscle relaxant. She took a sample of 14 people
suffering from extreme muscle constriction. She gave each a vial containing a dose (X) of the drug and recorded the
time to relief (Y) measured in seconds for each. She fit a centered curvilinear model to this data. The results
obtained by Microsoft Excel follow, where the dose (X) given has been centered.

SUMMARY OUTPUT

Multiple R 0.747
R Square 0.558
Observations 14

ANOVA
df SS MS F Signif F
Regression 2 10344797 5172399 6.94 0.0110
Residual 11 8193929 744903
Total 13 18538726

Intercept 1283.0 352.0 3.65 0.0040
CenDose 25.228 8.631 2.92 0.0140
CenDoseSq 0.8604 0.3722 2.31 0.0410

219. Referring to Table 15-4, the prediction of time to relief for a person receiving a dose of the drug 10
units above the average dose (i.e., the prediction of Y for X = 10), is ________.

ANSWER:
1,621
KEYWORDS: quadratic regression, prediction of individual values

220. Referring to Table 15-4, suppose the chemist decides to use an F test to determine if there is a
significant curvilinear relationship between time and dose. The p-value of the test is ________.

ANSWER:
0.041
KEYWORDS: quadratic regression, partial F test, p-value

221. Referring to Table 15-4, suppose the chemist decides to use an F test to determine if there is a
significant curvilinear relationship between time and dose. The value of the test statistic is ________.

ANSWER:
2.31**2 or 5.3361
KEYWORDS: quadratic regression, partial F test, test statistic

222. True or False: Referring to Table 15-4, suppose the chemist decides to use an F test to determine if
there is a significant curvilinear relationship between time and dose. If she chooses to use a level of significance
of 0.05, she would decide that there is a significant curvilinear relationship.

ANSWER:
True
KEYWORDS: quadratic regression, partial F test, decision, conclusion

223. True or False: Referring to Table 15-4, suppose the chemist decides to use an F test to determine if
there is a significant curvilinear relationship between time and dose. If she chooses to use a level of significance
of 0.01, she would decide that there is a significant curvilinear relationship.

ANSWER:
False
KEYWORDS: quadratic regression, partial F test, conclusion


224. Referring to Table 15-4, suppose the chemist decides to use a t test to determine if there is a significant
difference between a linear model and a curvilinear model that includes a linear term. The p-value of the test
statistic for the contribution of the curvilinear term is ________.

ANSWER:
0.041

difference between a curvilinear model without a linear term and a curvilinear model that includes a linear term.
The value of the test statistic is ______.

ANSWER:
2.92
KEYWORDS: quadratic regression, t test on slope, test statistic

difference between a curvilinear model without a linear term and a curvilinear model that includes a linear term.
The p-value of the test is ______.

ANSWER:
0.0140

227. True or False: Referring to Table 15-4, suppose the chemist decides to use a t test to determine if there
is a significant difference between a linear model and a curvilinear model that includes a linear term. If she
used a level of significance of 0.05, she would decide that the linear model is sufficient.

ANSWER:
False
KEYWORDS: quadratic regression, t test on slope, decision

is a significant difference between a linear model and a curvilinear model that includes a linear term. If she used
a level of significance of 0.02, she would decide that the linear model is sufficient.

ANSWER:
True


is a significant difference between a curvilinear model without a linear term and a curvilinear model that
includes a linear term. Using a level of significance of 0.05, she would decide that the curvilinear model should
include a linear term.

ANSWER:
True

230. In multiple regression, the __________ procedure permits variables to enter and leave the model at
different stages of its development.

ANSWER:
stepwise regression
KEYWORDS: stepwise regression

231. A regression diagnostic tool used to study the possible effects of collinearity is ______.

ANSWER:
VIF
KEYWORDS: collinearity, variance inflationary factor

232. The _______ the value of the Variance Inflationary Factor, the higher the collinearity of the X variables.

ANSWER:
larger
KEYWORDS: variance inflationary factor, collinearity, properties

233. The logarithm transformation can be used
a) to overcome violations of the autocorrelation assumption.
b) to test for possible violations of the autocorrelation assumption.
c) to overcome violations of the homoscedasticity assumption.
d) to test for possible violations of the homoscedasticity assumption.

ANSWER:
c
KEYWORDS: transformation, autocorrelation, homoscedasticity, assumption


234. The logarithm transformation can be used
a) to overcome violations of the autocorrelation assumption.
b) to test for possible violations of the autocorrelation assumption.
c) to change a nonlinear model into a linear model.
d) to change a linear independent variable into a nonlinear independent variable.

ANSWER:
c
KEYWORDS: transformation, autocorrelation, homoscedasticity, assumption

235. Which of the following will NOT change a nonlinear model into a linear model?
a) quadratic regression model
b) logarithmic transformation
c) square-root transformation
d) variance inflationary factor

ANSWER:
d
KEYWORDS: transformation

236. Which of the following is used to determine observations that have an influential effect on the fitted
model?
a) Durbin-Watson statistic
b) variance inflationary factor
c) the C
p
statistic
d) Cooks distance statistic

ANSWER:
d
KEYWORDS: influence analysis

237. Which of the following is NOT used to determine observations that have an influential effect on the
fitted model?
a) the hat matrix elements h
i

b) the Studentized deleted residuals t
i

c) the C
p
statistic
d) Cooks distance statistic

ANSWER:
c


238. Using the hat matrix elements h
i
to determine influential points in a multiple regression model with k
independent variable and n observations, X
i
is an influential point if
a) ( ) 2 1 /
i
h k n < +
b) ( ) 2 1 /
i
h k n > +
c) ( ) 1 / 2
i
h n k < +
d) ( ) 1 / 2
i
h n k > +

ANSWER:
b

239. Using the Studentized residuals t
i
to determine influential points in a multiple regression model with k
independent variable and n observations, and letting t
n-k-2
denote the upper critical value of a two-tail t test with
a 0.10 level of significance, X
i
a)
1 i n k
t t

<
b)
1 i n k
t t

>
c)
2 i n k
t t

<
d)
2 i n k
t t

>

ANSWER:
d

240. Using the Cooks distance statistic D
i
to determine influential points in a multiple regression model with
k independent variable and n observations and letting
1 2
,
F
v v
denote the critical value of an F distribution with
1
v
and
2
v degrees of freedom at a 0.50 level of significance, X
i
a)
1, 1 i k n k
D F
+
<
b)
1, 1 i k n k
D F
+
>
c)
1, 1 i n k k
D F
+
<
d)
1, 1 i n k k
D F
+
>

ANSWER:
b


241. True or False: Only when all three of the hat matrix elements h
i
, the Studentized deleted residuals t
i
, and
the Cooks distance statistic D
i
, reveal a consistent result, should an observation be removed from the regression
analysis.

ANSWER:
True

242. An independent variable X
j
is considered highly correlated with the other independent variables if
a) 5
j
VIF <
b) 5
j
VIF >
c)
j i
VIF VIF < for i j =
d)
j i
VIF VIF > for i j =

ANSWER:
b

243. True or False: The goals of model building are to find a good model with the fewest independent
variables that is easier to interpret and has a lower probability of collinearity.

ANSWER:
True
KEYWORDS: model building, collinearity

244. Using the best-subsets approach to model building, models are being considered when their
a)
p
C k >
b)
p
C k s
c) ( ) 1
p
C k > +
d) ( ) 1
p
C k s +

ANSWER:
d
KEYWORDS: model building, C-p statistic


245. True or False: In data mining, where huge data sets are being explored to discover relationships among
a large number of variables, the best-subsets approach is more practical than the stepwise regression approach.

ANSWER:
False
KEYWORDS: model building, stepwise regression, C-p

246. True or False: The stepwise regression approach takes into consideration all possible models.

ANSWER:
False
KEYWORDS: model building, stepwise regression

247. True or False: In stepwise regression, an independent variable is not allowed to be removed from the
model once it has been entered into the model.

ANSWER:
False
KEYWORDS: model building, stepwise regression

248. True or False: Using the C
p
statistic in model building, all models with ( ) 1
p
C k s + are equally good.

ANSWER:
False
KEYWORDS: model building, C-p


CHAPTER 16: TIME-SERIES FORECASTING AND INDEX NUMBERS

1. The effect of an unpredictable, rare event will be contained in the ___________ component.
a) trend
b) cyclical
c) irregular
d) seasonal

ANSWER:
c
KEYWORDS: component factors, properties

2. The overall upward or downward pattern of the data in an annual time series will be contained in the
____________ component.
a) trend
b) cyclical
c) irregular
d) seasonal

ANSWER:
a

3. The fairly regular fluctuations that occur within each year would be contained in the ____________
component.
a) trend
b) cyclical
c) irregular
d) seasonal

ANSWER:
d

4. The annual multiplicative time-series model does not possess _______ component.
a) a trend
b) a cyclical
c) an irregular
d) a seasonal

ANSWER:
d

5. Based on the following scatter plot, which of the time-series components is not present in this quarterly time
series?

e. trend
f. seasonal
g. cyclical
h. irregular

ANSWER:
c

6. The method of moving averages is used
a) to plot a series.
b) to exponentiate a series.
c) to smooth a series.
d) in regression analysis.

ANSWER:
c
KEYWORDS: moving averages

7. When using the exponentially weighted moving average for purposes of forecasting rather than smoothing,
a) the previous smoothed value becomes the forecast.
b) the current smoothed value becomes the forecast.
c) the next smoothed value becomes the forecast.

ANSWER:
b
KEYWORDS: exponential smoothing, properties

0
50
100
150
200
250
300
350
0 10 20 30 40 50 60
S
t
o
c
k

R
e
t
u
r
n
s

Quarters

8. In selecting an appropriate forecasting model, the following approaches are suggested:
a) Perform a residual analysis.
b) Measure the size of the forecasting error.
c) Use the principle of parsimony.
d) all of the above

ANSWER:
d
KEYWORDS: model selection

9. To assess the adequacy of a forecasting model, one measure that is often used is
a) quadratic trend analysis.
b) the MAD.
c) exponential smoothing.
d) moving averages.

ANSWER:
b

10. Which of the following methods should not be used for short-term forecasts into the future?
a) exponential smoothing
b) moving averages
c) linear trend model
d) autoregressive modeling

ANSWER:
b
KEYWORDS: moving averages, properties

11. A model that can be used to make predictions about long-term future values of a time series is
a) linear trend.
b) quadratic trend.
c) exponential trend.
d) all of the above

ANSWER:
d
KEYWORDS: least-squares trend fitting, properties


12. You need to decide whether you should invest in a particular stock. You would like to invest if the price is
likely to rise in the long run. You have data on the daily average price of this stock over the past 12 months.
Your best action is to
a) compute moving averages.
b) perform exponential smoothing.
c) estimate a least square trend model.
d) compute the MAD statistic.

ANSWER:
c

13. When a time series appears to be increasing at an increasing rate, such that the percentage difference from
observation to observation is constant, the appropriate model to fit is the
a. linear trend.
b. quadratic trend.
c. exponential trend.
d. none of the above

ANSWER:
c
KEYWORDS: least-squares trend fitting, model selection

14. The method of least squares is used on time-series data for
a) eliminating irregular movements.
b) deseasonalizing the data.
c) obtaining the trend equation.
d) exponentially smoothing a series.

ANSWER:
c

15. Which of the following statements about the method of exponential smoothing is NOT true?
a) It gives greater weight to more recent data.
b) It can be used for forecasting.
c) It uses all earlier observations in each smoothing calculation.
d) It gives greater weight to the earlier observations in the series.

ANSWER:
d

16. Which of the following is NOT an advantage of exponential smoothing?
a) It enables us to perform one-period ahead forecasting.
b) It enables us to perform more than one-period ahead forecasting.
c) It enables us to smooth out seasonal components.
d) It enables us to smooth out cyclical components.

ANSWER:
b

17. Which of the following statements about moving averages is NOT true?
a) They can be used to smooth a series.
b) They give equal weight to all values in the computation.
c) They are simpler than the method of exponential smoothing.
d) They give greater weight to more recent data.

ANSWER:
d

18. After estimating a trend model for annual time-series data, you obtain the following residual plot against
time; the problem with your model is that:
a) the cyclical component has not been accounted for.
b) the seasonal component has not been accounted for.
c) the trend component has not been accounted for.
d) the irregular component has not been accounted for.

ANSWER:
a
KEYWORDS: component factors
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
0 2 4 6 8 10 12
R
e
s
i
d
u
a
l
s

Time (Year)

TABLE 16-1

The number of cases of chardonnay wine sold by a Paso Robles winery in an 8-year period follows:
Year Cases of Wine
1991 270
1992 356
1993 398
1994 456
1995 438
1996 478
1997 460
1998 480

19. Referring to Table 16-1, set up a scatter diagram (i.e., a time-series plot) with year on the horizontal X-axis.

ANSWER:

0
50
100
150
200
250
300
350
400
450
500
1991 1992 1993 1994 1995 1996 1997 1998
Year
Number of Cases of Wine

20. Referring to Table 16-1, does there appear to be a relationship between the year and the number of cases of
wine sold?
a) No, there appears to be no relationship between the year and the number of cases of wine sold by
the vintner.
b) Yes, there appears to be a slight negative linear relationship between the year and the number of
cases of wine sold by the vintner.
c) Yes, there appears to be a slight positive relationship between the year and the number of cases of
wine sold by the vintner.
d) Yes, there appears to be a negative nonlinear relationship between the year and the number of cases
of wine sold by the vintner.

ANSWER:
c
KEYWORDS: scatter plot, component factor

21. After estimating a trend model for annual time-series data, you obtain the following residual plot against
time; the problem with your model is that
a) the cyclical component has not been accounted for.
b) the seasonal component has not been accounted for.
c) the trend component has not been accounted for.
d) the irregular component has not been accounted for.

ANSWER:
c
KEYWORDS: component factor

22. The cyclical component of a time series
a) represents periodic fluctuations which reoccur within 1 year.
b) represents periodic fluctuations which usually occur in 2 or more years.
c) is obtained by adding up the seasonal indexes.
d) is obtained by adjusting for calendar variation.

ANSWER:
b
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
0 2 4 6 8 10 12
R
e
s
i
d
u
a
l
s

Time (Year)

23. Which of the following terms describes the overall long-term tendency of a time series?
a) trend
b) cyclical component
c) irregular component
d) seasonal component

ANSWER:
a

24. Which of the following terms describes the up and down movements of a time series that vary both in
length and intensity?
a) trend
b) cyclical component
c) irregular component
d) seasonal component

ANSWER:
b

25. The following is the list of MAD statistics for each of the models you have estimated from time-series data:
Model MAD
Linear Trend 1.38
Quadratic Trend 1.22
Exponential Trend 1.39
AR(2) 0.71
Based on the MAD criterion, the most appropriate model is
a) linear trend.
b) quadratic trend.
c) exponential trend.
d) second order autoregressive model.

ANSWER:
d

TABLE 16-2

The monthly advertising expenditures of a department store chain (in $1,000,000s) were collected over the last
decade. The last 14 months of this time series follows:
Month Expenditures ($)
1 1.4
2 1.8
3 1.6
4 1.5
5 1.8
6 1.7
7 1.9
8 2.2
9 1.9
10 1.9
11 2.1
12 2.4
13 2.8
14 3.1

26. Referring to Table 16-2, set up a scatter diagram (i.e., time-series plot) with months on the horizontal X-
axis.

ANSWER:


27. True or False: Referring to Table 16-2, advertising expenditures appear to be increasing in a linear rather
than curvilinear manner over time.

ANSWER:
False
KEYWORDS: least-squares trend fitting
0
0.5
1
1.5
2
2.5
3
3.5
0 2 4 6 8 10 12 14
Advertising Expenditures
Number of Months

TABLE 16-3

The following table contains the number of complaints received in a department store for the first 6 months of
last year.
Month Complaints
January 36
February 45
March 81
April 90
May 108
June 144

28. Referring to Table 16-3, if a three-term moving average is used to smooth this series, what would be the
second calculated term?
a) 36
b) 40.5
c) 54
d) 72

ANSWER:
d

29. Referring to Table 16-3, if a three-term moving average is used to smooth this series, what would be the last
calculated term?
a) 72
b) 93
c) 114
d) 126

ANSWER:
c

30. Referring to Table 16-3, if a three-term moving average is used to smooth this series, how many terms
would it have?
a) 2
b) 3
c) 4
d) 5

ANSWER:
c

31. Referring to Table 16-3, if this series is smoothed using exponential smoothing with a smoothing constant
of 1/3, how many terms would it have?
a) 3
b) 4
c) 5
d) 6

ANSWER:
d

of 1/3, what would be the first term?
a) 36
b) 39
c) 42
d) 45

ANSWER:
a
KEYWORDS: exponential smoothing

of 1/3, what would be the second term?
a) 39
b) 42
c) 45
d) 53

ANSWER:
a

of 1/3, what would be the third term?
a) 53
b) 65.33
c) 68
d) 81

ANSWER:
a

35. Referring to Table 16-3, suppose the last two smoothed values are 81 and 96. (Note: they are not.) What
would you forecast as the value of the time series for July?
a) 81
b) 86
c) 91
d) 96

ANSWER:
d
KEYWORDS: exponential smoothing, forecasting

36. Referring to Table 16-3, suppose the last two smoothed values are 81 and 96. (Note: they are not.) What
would you forecast as the value of the time series for September?
a) 81
b) 86
c) 91
d) 96

ANSWER:
d

37. If you want to recover the trend using exponential smoothing, you will choose a weight (W) that falls in the
range
a) | | 0, 0.2
b) | | 0.2, 0.4
c) | | 0.6, 0.8
d) | | 0.8,1.0

ANSWER:
a
KEYWORDS: exponential smoothing, forecasting, properties


TABLE 16-4

Given below are Excel outputs for various estimated autoregressive models for Coca-Cola's real operating revenues
(in billions of dollars) from 1975 to 1998. From the data, we also know that the real operating revenues for 1996,
1997, and 1998 are 11.7909, 11.7757 and 11.5537, respectively.

First Order Autoregressive Model:
Intercept 0.1802077 0.39797154 0.452815546 0.655325119
XLag1 1.011222533 0.049685158 20.35260757 2.64373E-15

Second Order Autoregressive Model:
Intercept 0.30047473 0.4407641 0.681713257 0.503646149
X Lag 1 1.17322186 0.234737881 4.998008229 7.98541E-05
X Lag 2 -0.183028189 0.250716669 -0.730020026 0.474283347

Third Order Autoregressive Model:
Intercept 0.313043288 0.514437257 0.608515972 0.550890271
XLag1 1.173719587 0.246490594 4.761721601 0.000180926
XLag2 -0.069378567 0.373086508 -0.185958391 0.854678245
XLag3 -0.122123515 0.282031297 -0.433014053 0.670448392

38. Referring to Table 16-4 and using a 5% level of significance, what is the appropriate AR model for Coca-
Cola's real operating revenue?
a) AR(1)
b) AR(2)
c) AR(3)
d) any of the above

ANSWER:
a
KEYWORDS: autoregressive model, t test on slope

39. Referring to Table 16-4, if one decides to use AR(3), what will the predicted real operating revenue for
Coca-Cola be in 2001?
a) $11.59 billion
b) $11.68 billion
c) $11.84 billion
d) $12.47 billion

ANSWER:
c
KEYWORDS: autoregressive model, forecasting


TABLE 16-5

A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters,
using quarterly data on number of contracts during the 3-year period from 1996 to 1998. The following is the
resulting regression equation:
ln
Y = 3.37 + 0.117 X 0.083 Q

1
+ 1.28 Q
2
+ 0.617 Q
3

where
Y is the estimated number of contracts in a quarter

X is the coded quarterly value with X = 0 in the first quarter of 1996.
Q
1
is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q
2
is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q
3
is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.

40. Referring to Table 16-5 , the best interpretation of the constant 3.37 in the regression equation is:
a) the fitted value for the first quarter of 1996, prior to seasonal adjustment, is ln 3.37.
b) the fitted value for the first quarter of 1996, after seasonal adjustment, is ln 3.37.
c) the fitted value for the first quarter of 1996, prior to seasonal adjustment, is e
3.37
.
d) the fitted value for the first quarter of 1996, after seasonal adjustment, is e
3.37
.

ANSWER:
c
KEYWORDS: exponential model, intercept, interpretation

41. Referring to Table 16-5, the best interpretation of the coefficient of X (0.117) in the regression equation is:
a) the quarterly growth rate in contracts is around 11.7%.
b) the annual growth rate in contracts is around 11.7%.
c) the quarterly growth rate in contracts is around 17%.
d) the annual growth rate in contracts is around 17%.

ANSWER:
a
KEYWORDS: exponential model, slope, interpretation


42. Referring to Table 16-5, the best interpretation of the coefficient of Q
3
(0.617) in the regression equation is:
a) the number of contracts in the third quarter of a year is approximately 62% higher than the average
over all 4 quarters.
b) the number of contracts in the third quarter of a year is approximately 62% higher than it would be
during the fourth quarter.
c) the number of contracts in the third quarter of a year is approximately 85% higher than the average
over all 4 quarters.
d) the number of contracts in the third quarter of a year is approximately 85% higher than it would be

ANSWER:
d

43. Referring to Table 16-5, to obtain a forecast for the first quarter of 1999 using the model, which of the
following sets of values should be used in the regression equation?
a) X = 12, Q
1
= 0, Q
2
= 0, Q
3
= 0
b) X = 12, Q
1
= 1, Q
2
= 0, Q
3
= 0
c) X = 13, Q
1
= 0, Q
2
= 0, Q
3
= 0
d) X = 13, Q
1
= 1, Q
2
= 0, Q
3
= 0

ANSWER:
b
KEYWORDS: exponential model, forecasting

44. Referring to Table 16-5, to obtain a forecast for the fourth quarter of 1999 using the model, which of the
a) X = 15, Q
1
= 0, Q
2
= 0, Q
3
= 0
b) X = 15, Q
1
= 1, Q
2
= 0, Q
3
= 0
c) X = 16, Q
1
= 0, Q
2
= 0, Q
3
= 0
d) X = 16, Q
1
= 1, Q
2
= 0, Q
3
= 0

ANSWER:
a


45. Referring to Table 16-5, using the regression equation, which of the following values is the best forecast for
the number of contracts in the third quarter of 1999?
a) 228
b) 252
c) 277
d) 311

ANSWER:
c

46. Referring to Table 16-5, using the regression equation, which of the following values is the best forecast for
the number of contracts in the second quarter of 2000?
a) 212
b) 272
c) 592
d) 764

ANSWER:
d

47. Referring to Table 16-5, in testing the coefficient of X in the regression equation (0.117), the results were a
t-statistic of 9.08 and an associated p-value of 0.0000. Which of the following is the best interpretation of
this result?
a) The quarterly growth rate in the number of contracts is significantly different than 0% (o = 0.05).
b) The quarterly growth rate in the number of contracts is not significantly different than 0% ( o =
0.05).
c) The quarterly growth rate in the number of contracts is significantly different than 100% ( o =
0.05).
d) The quarterly growth rate in the number of contracts is not significantly different than 100% ( o =
0.05).

ANSWER:
a
KEYWORDS: exponential model, t test on slope, decision, conclusion, interpretation


48. Referring to Table 16-5, in testing the coefficient for Q
1
in the regression equation (0.083), the results were
a t-statistic of 0.66 and an associated p-value of 0.530. Which of the following is the best interpretation of
this result?
a) The number of contracts in the first quarter of the year is significantly different than the number of
contracts in an average quarter ( o = 0.05).
b) The number of contracts in the first quarter of the year is not significantly different than the number
of contracts in an average quarter ( o = 0.05).
c) The number of contracts in the first quarter of the year is significantly different than the number of
contracts in the fourth quarter for a given coded quarterly value of X (o = 0.05).
d) The number of contracts in the first quarter of the year is not significantly different than the number
of contracts in the fourth quarter for a given coded quarterly value of X (o = 0.05).

ANSWER:
d

49. True or False: A trend is a persistent pattern in annual time-series data that has to be followed for several
years.

ANSWER:
True

50. True or False: Given a data set with 15 yearly observations, a 3-year moving average will have fewer
observations than a 5-year moving average.

ANSWER:
False

51. True or False: Given a data set with 15 yearly observations, there are only thirteen 3-year moving averages.

ANSWER:
True

52. True or False: Given a data set with 15 yearly observations, there are only seven 9-year moving averages.

ANSWER:
True

53. True or False: MAD is the summation of the residuals divided by the sample size.

ANSWER:
False

54. True or False: A least squares linear trend line is just a simple regression line with the years recoded.

ANSWER:
True

55. True or False: If a time series does not exhibit a long-term trend, the method of exponential smoothing may
be used to obtain short-term predictions about the future.

ANSWER:
True

56. True or False: The method of least squares may be used to estimate both linear and curvilinear trends.

ANSWER:
True

57. True or False: The principle of parsimony indicates that the simplest model that gets the job done
adequately should be used.

ANSWER:
True

58. True or False: In selecting a forecasting model, we should perform a residual analysis.

ANSWER:
True


59. True or False: Each forecast using the method of exponential smoothing depends on all the previous
observations in the time series.

ANSWER:
True

60. True or False: The MAD is a measure of the average of the absolute discrepancies between the actual and
fitted values in a given time series.

ANSWER:
True
TABLE 16-6

The number of cases of merlot wine sold by a Paso Robles winery in an 8-year period follows:
Year Cases of Wine
1991 270
1992 356
1993 398
1994 456
1995 358
1996 500
1997 410
1998 376

61. Referring to Table 16-6, a centered 3-year moving average is to be constructed for the wine sales. The result
of this process will lead to a total of __________ moving averages.

ANSWER:
6

62. Referring to Table 16-6, a centered 3-year moving average is to be constructed for the wine sales. The
moving average for 1992 is __________.

ANSWER:
341.33



ANSWER:
438

64. Referring to Table 16-6, construct a centered 3-year moving average for the wine sales.

ANSWER:
Period Cases MA
1 270 *
2 356 341.333
3 398 403.333
4 456 404.000
5 358 438.000
6 500 422.667
7 410 428.667
8 376 *

number of moving averages that will be calculated is __________.

ANSWER:
4


ANSWER:
367.6


ANSWER:
420.0


68. Referring to Table 16-6, construct a centered 5-year moving average for the wine sales.

ANSWER:
Period Cases MA
1 270 *
2 356 *
3 398 367.6
4 456 413.6
5 358 424.4
6 500 420.0
7 410 *
8 376 *

69. Referring to Table 16-6, exponential smoothing with a weight or smoothing constant of 0.2 will be used to
smooth the wine sales. The value of E
2
, the smoothed value for 1992, is __________.

ANSWER:
287.2


4

ANSWER:
338.7

forecast wine sales. The forecast for 1999 is __________.

ANSWER:
380.2


72. Referring to Table 16-6, exponentially smooth the wine sales with a weight or smoothing constant of 0.2.

ANSWER:
Time CaseWine Smooth
1 270 270.000
2 356 287.200
3 398 309.360
4 456 338.688
5 358 342.550
6 500 374.040
7 410 381.232
8 376 380.186

2

ANSWER:
304.4

5

ANSWER:
375.7

forecast wine sales. The forecast for 1999 is __________.

ANSWER:
401.95


76. Referring to Table 16-6, exponentially smooth the wine sales with a weight or smoothing constant of 0.4.

ANSWER:
Time CaseWine Smooth
1 270 270.000
2 356 304.400
3 398 341.840
4 456 387.504
5 358 375.702
6 500 425.421
7 410 419.253
8 376 401.952

77. Referring to Table 16-6, the Holt-Winters method for forecasting with a smoothing constant of 0.2 for both
level and trend will be used to smooth the wine sales. The smoothed values of the level and trend for 1992
are ______ and ______, respectively.

ANSWER:
356; 86
KEYWORDS: Holt-Winters method


ANSWER:
406.8; 57.84


ANSWER:
383.82; -42.70


level and trend will be used to forecast the wine sales. The forecast for 1999 is _____.

ANSWER:
341.12
KEYWORDS: Holt-Winters method, forecasting


ANSWER:
213.01

82. Referring to Table 16-6, use the Holt-Winters method of fitting wine sales to compute the smoothed level
and trend with a smoothing constant of 0.2 for both level and trend.

ANSWER:
Year Series (Y) Level (E) Trend (T)
1991 270
1992 356 356 86
1993 398 406.8 57.84
1994 456 457.728 52.3104
1995 358 388.4077 -44.9942
1996 500 468.6827 55.22118
1997 410 432.7808 -17.6773
1998 376 383.8207 -42.7035


83. Referring to Table 16-6, plot both the wine sales series and the series of Holt-Winters forecasts for 1999 to
2002 using a smoothing constant of 0.2 for both level and trend.

ANSWER:

KEYWORDS: Holt-Winters method, forecasting, scatter plot


ANSWER:
356; 86


ANSWER:
433.2; 84.24


ANSWER:
609.11; 46.46

ANSWER:
655.56
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
Prediction
Sales (Y)



ANSWER:
794.93

89. Referring to Table 16-6, use the Holt-Winters method of fitting wine sales to compute the smoothed level
and trend with a smoothing constant of 0.8 for both level and trend.

ANSWER:
Year Series (Y) Level (E) Trend (T)
1991 270
1992 356 356 86
1993 398 433.2 84.24
1994 456 505.152 81.7824
1995 358 541.1475 72.62502
1996 500 591.018 68.07412
1997 410 609.2737 58.11044
1998 376 609.1073 46.45507


90. Referring to Table 16-6, plot both the wine sales series and the series of Holt-Winters forecasts for 1999 to
2002 using a smoothing constant of 0.8 for both level and trend.

ANSWER:

KEYWORDS: Holt-Winters method, forecasting, scatter plot

TABLE 16-7

The number of passengers arriving at San Francisco on the Amtrak cross country express on 6 successive
Mondays were: 60, 72, 96, 84, 36, and 48.

91. Referring to Table 16-7, the number of arrivals will be smoothed with a 3-term moving average. There will
be a total of __________ smoothed values.

ANSWER:
4

92. Referring to Table 16-7, the number of arrivals will be smoothed with a 3-term moving average. The first
smoothed value will be __________.

ANSWER:
76

0
100
200
300
400
500
600
700
800
900
1 2 3 4 5 6 7 8 9 10 11 12
Prediction
Sales (Y)

93. Referring to Table 16-7, the number of arrivals will be smoothed with a 3-term moving average. The last

ANSWER:
56

94. Referring to Table 16-7, the number of arrivals will be smoothed with a 5-term moving average. The first

ANSWER:
69.6

95. Referring to Table 16-7, the number of arrivals will be smoothed with a 5-term moving average. The last

ANSWER:
67.2

96. Referring to Table 16-7, the number of arrivals will be exponentially smoothed with a smoothing constant
of 0.1. The smoothed value for the second Monday will be __________.

ANSWER:
61.2

of 0.1. The smoothed value for the sixth Monday will be __________.

ANSWER:
62.0

of 0.1. The forecast for the seventh Monday will be __________.

ANSWER:
62.0

99. Referring to Table 11.7, exponentially smooth the number of arrivals using a smoothing constant of 0.1.

ANSWER:
Time Arrivals Smooth

1 60 60.0000
2 72 61.2000
3 96 64.6800
4 84 66.6120
5 36 63.5508
6 48 61.9957

of 0.25. The smoothed value for the second Monday will be __________.

ANSWER:
63.0

of 0.25. The smoothed value for the third Monday will be __________.

ANSWER:
71.25

of 0.25. The forecast of the number of arrivals on the seventh Monday will be __________.

ANSWER:
60.6


103. Referring to Table 16-7, exponentially smooth the number of arrivals using a smoothing constant of 0.25.

ANSWER:
Time Arrivals Smooth
1 60 60.0000
2 72 63.0000
3 96 71.2500
4 84 74.4375
5 36 64.8281
6 48 60.6211

104. Referring to Table 16-7, the Holt-Winters method for forecasting with a smoothing constant of 0.3 for
both level and trend will be used to smooth the number of arrivals. The smoothed values of the level and
trend for the second Monday are ______ and ______, respectively.

ANSWER:
72; 12
KEYWORDS: Holt-Winters

trend for the sixth Monday are ______ and ______, respectively.

ANSWER:
42.43; -15.74

both level and trend will be used to forecast the number of arrivals. The forecast for the seventh Monday is
_____.

ANSWER:
26.70
KEYWORDS: Holt-Winters, forecasting

both level and trend will be used to forecast the number of arrivals. The forecast for the twelfth Monday is
_____.

ANSWER:
-51.98
108. Referring to Table 16-7, use the Holt-Winters method of fitting number of arrivals to compute the
smoothed level and trend with a smoothing constant of 0.3 for both level and trend.

ANSWER:
Mondays Arrivals Level (E) Trend (T)
1 60
2 72 72 12

3 96 92.4 17.88
4 84 91.884 5.0028
5 36 54.26604 -24.8317
6 48 42.43029 -15.7345

109. Referring to Table 16-7, plot both the number of arrivals series and the series of Holt-Winters forecasts
for the seventh through twelfth Mondays using a smoothing constant of 0.3 for both level and trend.

ANSWER:

KEYWORDS: Holt-Winters, forecasting, scatter plot

trend for the second Monday are ______ and ______, respectively.

ANSWER:
72; 12

-60
-40
-20
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12
Prediction
Arrivals

trend for the sixth Monday are ______ and ______, respectively.

ANSWER:
105.64; 10.63

both level and trend will be used to forecast the number of arrivals. The forecast for the seventh Monday is
_____.

ANSWER:
116.27

both level and trend will be used to forecast the number of arrivals. The forecast for the twelfth Monday is
_____.

ANSWER:
169.40

114. Referring to Table 16-7, use the Holt-Winters method of fitting the number of arrivals to compute the
smoothed level and trend with a smoothing constant of 0.9 for both level and trend.

ANSWER:
Mondays Arrivals Level (E) Trend (T)
1 60
2 72 72 12
3 96 85.2 12.12
4 84 95.988 11.9868
5 36 100.7773 11.26705
6 48 105.6399 10.62661


115. Referring to Table 16-7, plot both the number of arrivals series and the series of Holt-Winters forecasts
for the seventh through twelfth Mondays using a smoothing constant of 0.9 for both level and trend.

ANSWER:

KEYWORDS: Holt-Winters, forecasting, scatter plot

TABLE 16-8

The president of a chain of department stores believes that her stores' total sales have been showing a linear
trend since 1980. She uses Microsoft Excel to obtain the partial output below. The dependent variable is sales
(in millions of dollars), while the independent variable is coded years, where 1980 is coded as 0, 1981 is coded
as 1, etc.

SUMMARY OUTPUT

Multiple R 0.604
R Square 0.365
Observations 17

Coefficients
Intercept 31.2
Coded Year 0.78

116. Referring to Table 16-8, the fitted trend value for 1980 is __________.

ANSWER:
31.2
KEYWORDS: least-squares trend fitting, fitted value

0
20
40
60
80
100
120
140
160
180
1 2 3 4 5 6 7 8 9 10 11 12
Prediction
Arrivals


ANSWER:
35.1

118. Referring to Table 16-8, the estimate of the rate at which sales are increasing each year is __________.

ANSWER:
0.78
KEYWORDS: least-squares trend fitting, slope, interpretation

119. Referring to Table 16-8, the forecast for sales in 2000 is __________.

ANSWER:
46.8
KEYWORDS: least-squares trend fitting, forecasting

120. Referring to Table 16-8, the forecast for sales in 2005 is __________.

ANSWER:
50.7


TABLE 16-9

The executive vice-president of a drug manufacturing firm believes that the demand for the firm's most popular
drug has been evidencing an exponential trend since 1985. She uses Microsoft Excel to obtain the partial output
below. The dependent variable is the log base 10 of the demand for the drug, while the independent variable is
years, where 1985 is coded as 0, 1986 is coded as 1, etc.

SUMMARY OUTPUT

Multiple R 0.996
R Square 0.992
Observations 12

Coefficients
Intercept 1.44
Coded Year 0.068


ANSWER:
27.54


ANSWER:
60.26

123. Referring to Table 16-9, the fitted exponential trend equation to predict Y is __________.

ANSWER:
27.54(1.17)
X


124. Referring to Table 16-9, the forecast for the demand in 1999 is __________.

ANSWER:
246.6

125. Referring to Table 16-9, the forecast for the demand in 2002 is __________.

ANSWER:
394.46

TABLE 16-10

The manager of a marketing consulting firm has been examining his company's yearly profits. He believes that
these profits have been showing a quadratic trend since 1980. He uses Microsoft Excel to obtain the partial
output below. The dependent variable is profit (in thousands of dollars), while the independent variables are
coded years and squares of coded years, where 1980 is coded as 0, 1981 is coded as 1, etc.

SUMMARY OUTPUT

Multiple R 0.998
R Square 0.996
Observations 17

Coefficients
Intercept 35.5
Coded Year 0.45
Year Squared 1.00

126. Referring to Table 16-10, the fitted value for 1980 is __________.

ANSWER:
35.5

127. Referring to Table 16-10, the fitted value for 1985 is __________.

ANSWER:
62.75

128. Referring to Table 16-10, the forecast for profits in 2000 is __________.

ANSWER:
444.5

129. Referring to Table 16-10, the forecast for profits in 2005 is __________.

ANSWER:
671.75


130. Microsoft Excel was used to obtain the following quadratic trend equation:
Sales = 100 10X + 15X
2
.
The data used was from 1989 through 1998, coded 0 to 9. The forecast for 1999 is __________.

ANSWER:
1,500

131. The manager of a company believed that her company's profits were following an exponential trend. She
used Microsoft Excel to obtain a prediction equation for the logarithm (base 10) of profits:
log
10
(Profits) = 2 + 0.3X.
The data she used were from 1993 through 1998, coded 0 to 5. The forecast for 1999 profits is __________.

ANSWER:
6,309.57

132. A first-order autoregressive model for stock sales is:
Sales
i
= 800 + 1.2(Sales)
i-1
.
If sales in 1998 are 6000, the forecast of sales for 1999 is __________.

ANSWER:
8,000

133. A second-order autoregressive model for average mortgage rate is:
Rate
i
= 2.0 + 1.8(Rate)
i-1
0.5 (Rate)
i-2
.
If the average mortgage rate in 1998 was 7.0, and in 1997 was 6.4, the forecast for 1999 is __________.
ANSWER:
7.4


134. A second-order autoregressive model for average mortgage rate is:
Rate
i
= 2.0 + 1.8(Rate)
i-1
0.5 (Rate)
i-2
.
If the average mortgage rate in 1998 was 7.0, and in 1997 was 6.4, the forecast for 2000 is __________.

ANSWER:
7.82

TABLE 16-11

Business closures in Laramie, Wyoming from 1989 to 1994 were:
1993 10
1994 11
1995 13
1996 19
1997 24
1998 35

Microsoft Excel was used to fit both first-order and second-order autoregressive models, resulting in the
following partial outputs:

SUMMARY OUTPUT 2
nd
Order Model

Coefficients
Intercept -5.77
X Variable 1 0.80
X Variable 2 1.14

SUMMARY OUTPUT 1
st
Order Model

Coefficients
Intercept -4.16
X Variable 1 1.59

135. Referring to Table 16-11, the fitted values for the first-order autoregressive model are ________,
________, ________, ________, and ________.

ANSWER:
11.74, 13.33, 16.51, 26.05, 34.00
KEYWORDS: autoregressive model, fitted value

136. Referring to Table 16-11, the residuals for the first-order autoregressive model are ________, ________,
________, ________, and ________.

ANSWER:
-.74, -.33, 2.49, -2.05, 1.00
KEYWORDS: autoregressive model, residual

137. Referring to Table 16-11, the value of the MAD for the first-order autoregressive model is ________.

ANSWER:
1.322
KEYWORDS: autoregressive model, model selection

138. Referring to Table 16-11, the fitted values for the second-order autoregressive model are ________,
________, ________, and ________.

ANSWER:
14.43, 17.17, 24.25, 35.09
KEYWORDS: autoregressive model, fitted value

139. Referring to Table 16-11, the residuals for the second-order autoregressive model are ________,
________, ________, and ________.

ANSWER:
1.43, 1.83, 0.25, 0.09
KEYWORDS: autoregressive model, residual

140. Referring to Table 16-11, the value of the MAD for the second-order autoregressive model is ________.

ANSWER:
0.90

141. True or False: Referring to Table 16-11, the values of the MAD for the two models indicate that the first-
order model should be used for forecasting.

ANSWER:
False


TABLE 16-12

The manager of a health club has recorded average attendance in the clubs newly introduced step classes over
the last 15 months: 32.1, 39.5, 40.3, 46.0, 65.2, 73.1, 83.7, 106.8, 118.0, 133.1, 163.3, 182.8, 205.6, 249.1, and
263.5. She then used Microsoft Excel to obtain the following partial output for both a first- and second-order
autoregressive model.

SUMMARY OUTPUT 2
nd
Order Model

Multiple R 0.993
R Square 0.987
Observations 15

Coefficients
Intercept 5.86
X Variable 1 0.37
X Variable 2 0.85

SUMMARY OUTPUT 1
st
Order Model

Multiple R 0.993
R Square 0.987
Observations 15

Coefficients
Intercept 5.66
X Variable 1 1.10

142. Referring to Table 16-12, using the first-order model, the forecast of average attendance for month 16 is
__________.

ANSWER:
295.51

143. Referring to Table 16-12, using the first-order model, the forecast of average attendance for month 17 is
__________.

ANSWER:
330.72

144. Referring to Table 16-12, using the second-order model, the forecast of average attendance for month 16
is __________.

ANSWER:
315.09

145. Referring to Table 16-12, using the second-order model, the forecast of average attendance for month 17
is __________.

ANSWER:
346.42

146. True or False: Referring to Table 16-12, based on the parsimony principle, the second-order model is the
better model for making forecasts.

ANSWER:
False


TABLE 16-13

A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using
quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting
regression equation:

10
log Y = 6.102 + 0.012 X 0.129 Q

1
0.054 Q
2
+ 0.098 Q
3

where
Y is the estimated number of contracts in a quarter

X is the coded quarterly value with X = 0 in the first quarter of 1998.
Q
1
is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q
2
is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q
3
is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.

147. Referring to Table 16-13, the best interpretation of the constant 6.102 in the regression equation is:
a) the fitted value for the first quarter of 1998, prior to seasonal adjustment, is log
10
(6.102).
b) the fitted value for the first quarter of 1998, after seasonal adjustment, is log
10
(6.102).
c) the fitted value for the first quarter of 1998, prior to seasonal adjustment, is 10
6.102
.
d) the fitted value for the first quarter of 1998, after seasonal adjustment, is 10
6.102
.

ANSWER:
c
KEYWORDS: exponential model, intercept, interpretation

148. Referring to Table 16-13, the best interpretation of the coefficient of X (0.012) in the regression equation
is:
a) the quarterly growth rate in revenues is around 1.2%.
b) the annual growth rate in revenues is around 1.2%.
c) the quarterly growth rate in revenues is around 12%.
d) the annual growth rate in revenues is around 12%.

ANSWER:
a

149. Referring to Table 16-13, the estimated quarterly compound growth rate in revenues is:
a) the quarterly growth rate in revenues is around 1.2%.
b) the annual growth rate in revenues is around 2.8%.
c) the quarterly growth rate in revenues is around 12%.
d) the annual growth rate in revenues is around 28%.

ANSWER:
b

2
(0.054) in the regression
equation is:
a) the revenues in the second quarter of a year are approximately 5.4% lower than the average over all
4 quarters.
b) the revenues in the second quarter of a year are approximately 5.4% lower than they would be
c) the revenues in the second quarter of a year are approximately 11.69% lower than the average over
all 4 quarters.

d) the revenues in the second quarter of a year are approximately 11.69% lower than they would be

ANSWER:
d

3
(0.098) in the regression equation
is:
a) the revenues in the third quarter of a year are approximately 9.8% higher than the average over all 4
quarters.
b) the revenues in the third quarter of a year are approximately 9.8% higher than they would be during
the fourth quarter.
c) the revenues in the third quarter of a year are approximately 25.31% higher than the average over
all 4 quarters.
d) the revenues in the third quarter of a year are approximately 25.31% higher than they would be

ANSWER:
d

152. Referring to Table 16-13, to obtain a forecast for the first quarter of 2002 using the model, which of the
a) X = 16, Q
1
= 1, Q
2
= 0, Q
3
= 0
b) X = 16, Q
1
= 0, Q
2
= 1, Q
3
= 0
c) X = 17, Q
1
= 1, Q
2
= 0, Q
3
= 0
d) X = 17, Q
1
= 0, Q
2
= 1, Q
3
= 0

ANSWER:
a


153. Referring to Table 16-13, to obtain a forecast for the fourth quarter of 1999 using the model, which of the
a) X = 7, Q
1
= 0, Q
2
= 0, Q
3
= 0
b) X = 7, Q
1
= 1, Q
2
= 0, Q
3
= 0
c) X = 8, Q
1
= 0, Q
2
= 0, Q
3
= 0
d) X = 8, Q
1
= 1, Q
2
= 0, Q
3
= 0

ANSWER:
a

154. Referring to Table 16-13, to obtain a forecast for the third quarter of 2003 using the model, which of the
a) X = 22, Q
1
= 0, Q
2
= 0, Q
3
= 0
b) X = 22, Q
1
= 0, Q
2
= 0, Q
3
= 1
c) X = 23, Q
1
= 0, Q
2
= 0, Q
3
= 0
d) X = 23, Q
1
= 0, Q
2
= 0, Q
3
= 1

ANSWER:
b

155. Referring to Table 16-13, using the regression equation, what is the forecast for revenues in the third
quarter of 2003?

ANSWER:
2910717.12

156. Referring to Table 16-13, using the regression equation, what is the forecast for revenues in the first
quarter of 2005?

ANSWER:
2037042.08

157. Referring to Table 16-13, using the regression equation, what is the forecast for revenues in the fourth
quarter of 2004?

ANSWER:
2666858.67


158. Referring to Table 16-13, in testing the significance of the coefficient of X in the regression equation
(0.012), which has a p-value of 0.0000, which of the following is the best interpretation of this result?
a) The quarterly growth rate in revenues is significantly different than 0% ( o = 0.05).
b) The quarterly growth rate in revenues is not significantly different than 0% ( o = 0.05).
c) The quarterly growth rate in revenues is significantly different than 1.2% ( o = 0.05).
d) The quarterly growth rate in revenues is not significantly different than 1.2% (o = 0.05).

ANSWER:
a

159. Referring to Table 16-13, in testing the significance of the coefficient for Q
1
in the regression equation (
0.129), which has a p-value of 0.492, which of the following is the best interpretation of this result?
a) The revenues in the first quarter of the year are significantly different than the revenues in an
average quarter ( o = 0.05).
b) The revenues in the first quarter of the year are not significantly different than the revenues in an
average quarter ( o = 0.05).
c) The revenues in the first quarter of the year are significantly different than the revenues in the
fourth quarter ( o = 0.05).
d) The revenues in the first quarter of the year are not significantly different than the revenues in the
fourth quarter ( o = 0.05).

ANSWER:
d

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CHAPTER 1: INTRODUCTION AND DATA

2, 700 20 , 65, two-tailed value 0.034 (for testing )

27.118 0.015 0.390 550 2.078 / Y SAT Toefl Room Brd = + +

Y = 3.37 + 0.117 X 0.083 Q

Y is the estimated number of contracts in a quarter

log Y = 6.102 + 0.012 X 0.129 Q

Y is the estimated number of contracts in a quarter

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