Solution: Final Exam Q1. The number of complaints received by a consumer court in a month is 500 on the average.

The chance of a complaint being settled in a months time is 60%.

(a) Find the probability distribution of the number of complaints settled in a months time stating the assumptions you make (If you just write down the distribution, 30% credit will be given). (6 points) (b) Find the average number of complaints in a year that take more than one months time to settle. (If you write down the answer without proper justification 30% credit will be given). (4 points)

Solution Q1: a. X = Number of complaints received in a month X ~ P(500) Y = Number of complaints settled in a month Y ~ B(n, 0.6)

P(X = x) = P(Y = y) = Probability Distribution of the number of complaints settled in a months time =

b. Now, average number of complaints not settled in a months time are (X X) = 500-300 = 200 Average number of complaints in a year not settled = 200 * 12 = 2400.

Q2. Suppose Ram and Shyam, respectively, use unbiased estimators T1 and T2 to estimate the

average age at marriage, say, of the married females living in Ahmedabad in 2011 based on two independent random samples. Ram uses simple random sampling without replacement and Shyam uses stratified random sampling. Suppose further variances of T1 and T2 are known to be 70 and 30.

Two new estimators of are proposed and are given by

T = (T1 + T2)/2 and

T * (0.3 T1 0.7 T2 ) .

(a) Prove that both these estimators are unbiased. (2 points) (b) Which of these estimators would you prefer (For just writing the estimator you will be given no credit)? You need to justify your choice. (4 points) * (c) Prove that T and T are consistent for given that T1 and T2 are consistent for and their variances tend to 0 as sample size tends to infinity (You may use the sufficient conditions for consistency, i.e., as the sample size tends to infinity, the expected value of the estimator approaches the true population value and the variance approaches zero). (4 points)

Solution Q 2: (a) T1 & T2 are unbiased estimators of Therefore, E(T1)= & E(T2)= Therefore, T = (T1+T2)/2 E(T)= E(T1+T2)/2 =1/2[E(T1) + E(T2) ] = [ = Now, E(T*) = E (0.3 T1 + 0.7 T2) = 0.3 E (T1) + 0.7 E(T2) =0.3 + 0.7 = Thus T & T* are unbiased estimators of . .

(b) V(T) = V (T1+T2)/2 = [V(T1)+ V(T2)] =1/4 ( 70 + 30) V(T) = 25. Now, V(T*) = V( 0.3 T1 + 0.7 T2) = 0.09 V(T1)+ 0.49 V(T2) = 0.09 (70) + 0.49 (30) V(T*)=21 V(T ) > V(T*) Thus, T* would be preferred (c ) Since it is given that V(T) 0 & V(T*) 0 as n . therefore V(T) = V (T1+T2)/2 = *V(T1)+ V(T2)+ 0 as n (i.e. (0+0)), and V(T*) = V( 0.3 T1 + 0.7 T2) = 0.09 V(T1)+ 0.49 V(T2) 0 as n Also we have already shown E(T) = E(T*)= .

Thus, T and T* are consistent for . Q3. According to the Department of Transportation, 74% of all cars on an expressway were exceeding the 80 km/h speed limit. The department runs a public campaign to increase awareness among drivers about the dangers of exceeding the speed limit. The department then takes a sample of 2000 cars on the expressway and finds that 72% of the sampled cars exceed the 80 km/h speed limit. The department wants to find whether the awareness campaign has resulted in reduction of the percentage of speeding cars.

(a) Formulate a hypotheses testing problem. Justify the choice of null and alternative hypotheses. (2 points)

(b) Test the null hypothesis at 5% level of significance. (4 points) (c) Find the probability of type II error if the true proportion of speeding cars reduces to 73.99% as a result of the awareness programme. (4 points)

Solution 3 (a)

P= proportion of cars exceeding speed limits Therefore , H0 : P 0.74 V/S Ha: P< 0.74

(b)

n= 2000,

, = 0.05

Z= Z = -2.0391 And Z = 1.645

Z < - Z .therefore we reject H0 (c) Given P* = 0.7399 We reject H0 if Z<-1.645 Or < 0.7238

Now, = P,accept H0/Ha is true= P{ /P=0.7399} = P{Z>-1.634} = 0.9488 Q4. Suppose the marketing manager in charge of promoting a new brand of cookies has chosen a random sample of 3100 customers nationally from the target population. The respondents are then categorized in the form of a contingency table as shown below.

North Zone South Zone East Zone West Zone Liked the cookies 450 650 700 250 Disliked the cookies 150 150 300 450

The manager wants to find out based on the above data whether there is a zonal effect on liking and disliking of the product.

(a) Formulate a hypotheses testing problem writing the null and alternative hypotheses explicitly. (2 points)

(b) Calculate the value of the appropriate Pearsonian Chi-square statistic. (5 points) (c) Carry out the test at 5% level of significance and interpret the result in the context of the managers problem. (3 points) Solution Q4: Ho: There is no zonal effect on liking and disliking of the product (cookies) Ha: There is zonal effect on liking and disliking of the product (cookies) f(I,j)[ f(I,j)-e(I,j)]^2 / e(I,j) e(I,j) [ f(I,j)-e(I,j)]^2 e(I,j) 396.774 53.2258 2 1 2832.986472 7.140047207 529.032 120.967 3 7 14633.19459 27.66030685 661.290 38.7096 3 8 1498.439126 2.265932337 462.903 2 -212.903 45327.78356 97.92064741 203.225 8 -53.2258 2832.986472 13.94009217 270.967 7 -120.968 14633.19459 54.00345622 338.709 7 -38.7097 1498.439126 4.423963134 237.096 212.903 8 2 45327.78356 191.1784068 = 398.5328522

Liking/Disliking Liking Liking Liking Liking Disliking Disliking Disliking Disliking

Zones North South East West North South East West

f(I,j) 450 650 700 250 150 150 300 450

D.F. = (r-1) (c-1)

= (2-1) (4-1) =3 Tab. Value for .05,3 =7.815

2
2 Since the observed value of Pearsonian 2 > .05,3 we reject Ho at 5% level of significance and conclude

that there is a zonal effect on the liking and disliking of the product (cookies).