Professional Documents
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/Wathen , 7 edition
by Lind/ Marchal
th
:
:
15%
10%
Mid-Term-1
Mid-Term-2
Final Examination
Total:
:
:
:
25%
25 %
25 %
100%
P.T.O.
Course regulations:
1. Mobile phones must be switched off during the class hour.
2. Make-up exams will be arranged only in case of emergency , subject to
submission of genuine documents. There will be NO MAKE-UP for quiz tests
under any circumstances.
3. Distracting the instructor by talking to other classmates is not allowed.
4. Students are free to consult the instructor regarding the class material only
during the office hour mentioned.
5. Attendance is important to earn satisfactory grade in this course.
Spring 2014
BUS 173 Applied Statistics -2
Worksheet -1
Instructor: Humaira Husain
Q2. The rent for a one bed room apartment in California follows Normal
distribution with a mean of 2200 dollars per month and a standard deviation of
250 dollars per month. What is the probability of selecting a sample of 50 one bed
room apartments and finding the mean to be at least 1950 dollars per month?
Q3. Antelope Coffee is considering the possibility of opening a gourmet coffee
shop. Shops will be successful if per capita annual income is above $60000.
Standard deviation of income is $5000. A random sample of 36 people was
obtained and the mean income was 62300$. Does this sample provide evidence
that the shop will be opened?
Q4.Given a population with mean 100 and variance 2 81 . The central limit
theorem applies when the sample size n 25 . A random sample of size n 25 is
obtained.
a. What are the mean and variance of sampling distribution of sample mean?
b. What is the probability that x > 102?
c. What is the probability that 98 x 101?
d. What is the probability that x 101.5 ?
Spring 2014
BUS 173 Applied Statistics -2
Worksheet 2
Instructor: Humaira Husain
a. Find 90% confidence interval for population mean score of the current group of
applicants.
b. Based on these sample results, a statistician found for the population mean
with a confidence interval extending from 165.8 to 210.0 points. Find the
confidence level of this interval.
Q2. A college admissions officer for an M.B.A program has determined that
historically applicants have undergraduate grade point averages that are
normally distributed with standard deviation 0.45. From a random sample of 25
applications from the current year, the sample mean grade average is 2.90.
a. Find 95% confidence interval for population mean.
b. Based on these sample results, a statistician computes for the population mean
a confidence interval extending from 2.81 to 2.99. Find the confidence level
associated with this interval.
Q3. The owner of Brittens egg farm wants to estimate mean number of eggs laid
per chicken . A sample of 20 chickens shows they laid on average of 20 eggs per
month with a standard deviation of 2 eggs pee month.
a. Find the value of population mean?
b. Explain why we need to use the t distribution . What assumption do you need
to make?
c. For a 95 % confidence interval , what is the value of t?
d. Develop 90% confidence interval for population mean.
H0: 100
H1: > 100
Using a random sample of size n 25 , a probability of Type error equal to .05, and the
following sample statistics.
a. x 106 ,
s 15
b. x 104 , s 10
c. x 95 , s 10
d. x 92 , s 18
Q2. Test the Hypotheses
H 0 : 100
H 1 : < 100
Using a random sample of size n 36 , a probability of type error equal to 0.05 and the
following sample statistics.
a. x 106 ,
s 15
b. x 104 , s 10
c. x 95 , s 10
d. x 92 , s 18
Q3. The accounts of a corporation show that , on average, accounts payable are $125.32.
An auditor checked a random sample of 16 of these accounts. The sample mean was
$131.78 and the sample standard deviation was $25.41. Assume that the population
distribution is normal . Test at the 5% significance level against a two sided alternative
the null hypothesis that the population mean is $125.32.
Q4. A process that produces bottles of shampoo when operating correctly , produces
bottles whose contents weigh, on average , 20 ounces. A random sample of nine bottles
from a single production run yielded the following content weights (in ounces):
21.4 19.7
19.7
20.6
20.8
20.1
19.7
20.3
20.9
Assuming that the population distribution is normal, test at the 5% level against a two
sided alternative the null hypothesis that the process is operating correctly.
Q5. In contract negotiations a company claims that a new incentive scheme has resulted
in average weekly earnings of at least $400 for all customer service workers. A union
representative takes a random sample of 15 workers and finds that their weekly earnings
have on average of $381.35 and a standard deviation of $48.60. Assume a normal
distribution.
a. Test the companys claim.
b. If the same sample results had been obtained from a random sample of 50 employees,
could the companys claim be rejected at a lower significance level than that used in part
(a)?
Q6. The production manager of northern Windows has asked you to evaluate a proposed
new procedure for producing its regal line of double hung windows. The present process
has a mean of production of 80 units per hour with a population standard deviation of
8 . Is there any strong evidence that the mean production level is higher with the
new process.? Consider level of risk to be 5% and sample size is 25 and the resulting
sample mean is 83 .
Q7. The production manager of twin Forks ball bearing has asked your assistance in
evaluating a modified ball bearing production process. Ball bearings weights are
normally distributed with mean of 5 ounces and standard deviation of 0.1 ounces. A new
raw material supplier was used for a recent production run and the manager wants to
know if that change has resulted in a lowering of the mean weight of ball bearings
.Consider level of risk to be .05. and sample size = 16 and the sample mean is 4.962.
Q8. The production manager of Circuits unlimited has asked your assistance in
analyzing a production process. This process involves drilling holes whose diameters are
normally distributed with population mean 2 inches and population standard deviation
of 0.06 inches. A random sample of 9 measurements had a sample mean of 1.95
inches.Use a significance level of 5% to determine if the observed sample mean is
unusual and suggests that the drilling machine should be adjusted.
Q9. You have been asked to evaluate single employer plans after the establishment of the
health benefit guarantee corporation. A random sample of 76 percentage changes in
promised health benefits was observed. The sample mean percentage change was .078
and the sample standard deviation was .201. Find and interpret the p value of a test of
null hypothesis that the population percentage change is 0 against the two sided
alternative.
Q10 A sample of 64 observations is selected from normal population. The sample mean
is 215 and population standard deviation is 15. Conduct the following test of hypothesis
using 3% level of significance.
H0: 220
H1: < 220
Worksheet-4
.05
10
n 100
Q2. A statistics practitioner wants to test the following hypotheses with 20 and
n 100 .
H O : 100
H 1 : > 100
a. using 0.10 , find the Type 2 Error for the following test of hypothesis, given that
102.
b. Repeat part a with 0.02
c. Describe the effect on of decreasing
H 1 : < 50
.05
, 10 , n 40
Q4. Compute the p value in order to test the following hypotheses given that x 52 ,
n 9 and 5 , .03 .
H O : 50
H 1 : > 50
a. repeat part a with n 25.
b. repeat part a with n 100.
c. Describe what happens to the value of the test statistic and p value when the sample
size increases.
Q5. A statistics practitioner formulated the following hypotheses and learned that
x 190 , n 9
and 50 . Compute the p value in order to test the following
hypotheses.
H O : 200
H 1 : < 200
a. repeat part a with n 30
b. repeat part a with n 10
Q6.
and p value
when the
H O : 200
H 1 : < 200
Find the probability of a type 2 error for the following test of hypothesis given that
196. consider significance level to be 10%, population standard deviation is 30 and the
sample size is 25.
a. repeat part (a) with sample size =100.
b. describe the effect on error type 2 of increasing sample size.
Q7. Compute the p value in order to test the following hypotheses given that x 990 ,
n 100 and 50 .
H O : 1000
H 1 : < 1000
a. repeat part a with 50
b. repeat part a with 100
c. Describe what happens to the value of the test statistic
standard deviation increases.
and p value
when the
= 74
s1 18
= 71
s 2 16
a. Test with .05 to determine whether we can infer that population means
differ.
b. Repeat part (a) increasing standard deviations to s1 210 and s 2 198 ,
describe the result.
c. Repeat part (a) with sample size=150 and discuss the effect of increasing
sample size.
d. Repeat part(a) changing the mean of sample1 ( x1 ) to 76. Discuss the effect of
increasing x1 .
Q2. A number of restaurants feature a device that allows credit card users to
swipe their cards at the table. It allows user to specify a percentage or a dollar
amount to leave as a tip. In an experiment to see how it works , a random sample
of credit card users was drawn. Some paid the usual way and some used new
device. The percent left as a tip was recorded and listed below. Can you infer that
users of new device leave larger tips?
Usual
10.3
15.2
13
9.9
12.1
13.4
Device 13.6
15.7
12.9
12.2
14.9
13.2 12.0
12.1
13.9 15.7
15.4
17.4
Q3. Every month a clothing store conducts an inventory and calculates losses
from theft. The store would like to reduce these losses and is considering two
methods . The first is to hire a security guard, and the second is to install
cameras. To help decide which method to choose , the manager hired a security
guard for 6 months . During the next 6 month period, the store installed cameras.
The monthly losses were recorded and are listed here. Manager decided that
because the cameras were cheaper than the guard, he would install the cameras
unless there was enough evidence to infer that the guard was better. What
should the manager do?
Security guard
355
284
401
398
477
254
Cameras
486
303
270
386
411
435
Q4. How do drivers react to sudden large increases in the price of gasoline? To
help answer the question, a statistician recorded the speeds of cars as they
passed a large service station. He recorded the speeds (mph) in the same location
after the service station sign showed that the price of gasoline had risen by 15
cents. Can we conclude that speeds differ?
36
31
30
28
36
27
36
35
30
32
36
26
30
32
30
33
36
31
32
29
28
39
Before
6.6
6.5
9.0
10.3
11.2
8.1
6.3
11.6
After
6.8
2.4
7.4
8.5
8.1
6.1
3.4
2.0
x x
n
i 1
n 1
= 16.0
x
n
350
i 1
x yi y
n 1
180
420
5.5
380
6
350
6.5
400
6
440
5
380
6.5
450
4.5
420
5
Q3 A fast food chain decided to carry out an experiment to assess the influence of
advertising expenditure on sales . Different relative changes in advertising
expenditure , compared to the previous year were made in eight regions of the
country and resulting changes in sales levels were observed . The accompanying
table shows the results.
Increase in advertising
Expenditure %
0
Increase in sales % 2.4
4
7.2
14
10.3
10
9.1
9
10.2
8
4.1
6
7.6
1
3.5
employee was asked to assess his or her own job separation x on a scale from 1
to 10. In addition, the number of days absent y from work during the last year
were found for these employees. The sample regression line y hat = 12.6 1.2 x
was estimated by least squares for these data. Also found were
= 6.0
x
25
i 1
x = 130.0
SSE 80.6
n 1
250
Test against a two-sided alternative the null hypothesis that the slope of the
population regression line is 0.
Q6. It might be that watching television reduces the amount of physical exercise,
causing weight gains. The number of pounds each child was overweight was
recorded ( a negative number indicates the child is underweight ). In addition, the
number of hours of television viewing per week was also recorded. These data are
listed here.
Television
42
38 28 29
34
Overweight
8
5
3
18
Television
36
18
25
35
-1
37
13
38
31
33
19
29
14
-9
Overweight
14
-7
a)Calculate the sample regression line and describe what the coefficients tell you
about the relationship between the two variables.
b) Determine the coefficient of determination and describe what it tells you.
c) Conduct a test to determine whether there is evidence of a linear relationship
between weight and watching television.
d) Estimate or predict with 90% confidence the Mean overweight for children who
are watching television 20 times per week.
Worksheet -7
Spring 2014
Q1. In an attempt to determine the factors that affect the amount of energy used,
200 households were analyzed. In each the number of occupants and the number
of electricity used measured. We have the following sample statistics: x bar = 4.75
, y bar = 762.6,
variance of x = 4.84 , Variance of y = 56725, covariance
between x and y = 310.0
a) Determine the regression line and interpret the results.
b) Assess the fit of the regression line (Compute the standard error of the
estimate and R square )
c) Estimate the mean number of electricity consumption for households with
90% confidence when the number of occupants = 5.
Spring 2014
b1 0.052
b2 1.14
and
SSR = 88.2
S b2 0.35
e) Test against the appropriate one sided alternative the null hypothesis that for
fixed family size , milk consumption does not depend linearly on Income.
f) Find 95% confidence Interval for 2 .
Q2. A study was conducted to determine whether certain features could be used
to explain variability in the prices of furnaces. For a sample of 19 furnaces the
following regression model was estimated
Where
R 2 0.84
yi =
Price in dollar
x1 = Rating of furnace
x 2 = Energy efficiency ratio
x 3 = Number of settings
a) Find a 95% confidence interval for the expected increase in price resulting from
an additional setting when the values of the rating and the energy efficiency ratio
remains fixed.
b) Test the null hypothesis that all else being equal the energy efficiency ratio of
furnaces does not affect their price against the alternative that the higher the
energy efficiency ratio the higher the price.
Q3. In Question number 1
a) Test the null hypothesis H o : 1 2 0
b) Set out the analysis in variance table.
Q4. The president of a company that manufactures the drywall wants to analyze
the variables that affect demand for his product . Drywall is used to construct the
walls in houses and offices. Consequently the president decides to develop a
regression model in which dependent variable y i is monthly sales of drywall and
followings are the independent variables:
x1
x2
x3
x4
Intercept
Permits
Mortgage
Coefficients
-111.83
4.76
16.99
Standard error
134.34
.395
15.16
t statistic
-.83
12.06
1.12
Apartment vacancy
Office vacancy
-10.53
1.31
6.39
2.79
-1.65
.47
Question:5
Consider the following software generated result sheet of a multiple
regression.
Analysis of Variance
SOURCE
Regression
Error
DF
5
20
SS
100
40
MS
20
2
Predictor
Coef
St Dev.
Constant
X1
X2
X3
X4
3.00
4.00
3.00
0.20
-2.50
1.50
3.00
0.20
0.05
1.00
t statistic
2.00
1.33
15.00
4.00
-2.5
X5
3.00
4.00
0.75
d. Test the regression coefficients individually. Would you consider omitting any
variables? If so, which one(s)? use .05 significance level.
e. Compute the R square and adjusted R square and interpret the result.
f. What assumption you have regarding the model error variance?
g.
assumptions of the multiple regression model do not hold in the above case for
example heteroscedasticity and if the residual terms are serially correlated .
[ E( i j ) 0 ]
DF = degrees of freedom
SS = Sum Square
MS= Mean square
Coef= coefficient
St. Dev = Standard deviation
10
15
20
S2
50
50
50
_________________________________
Sample size
4
4
4
20
S2
10
22
25
10
10
Q3. A management scientist believes that one way of judging whether a computer
came equipped with enough memory is to determine the age of the computer. In a
preliminary study random sample of computer users were asked to identify the
brand of the computer and its age (by months).the categorized responses are
shown below. Do these data provide sufficient evidence to conclude that there are
differences in age between the computer brands? Use level of Significance = .05
IBM
DELL
HEWLETT - PACKARD
OTHER
17
24
10
15
12
13
21
15
Q4. In early 2001 the economy was slowing down and companies were laying off
workers . A gallup poll asked a random sample of workers how long it would be
before they had significant financial hardships if they lost their jobs and could not
find new ones. They also classified their income. The classifications are
More than 50000$
30000$ to 50000$
20000$ to 30000$
Less than 20000$
Sample
xi
S i2
ni
____________________________________________________
1
22.21
121.6
39
18.46
90.39
14
15.49
85.25
81
9.31
65.4
67
Sum of Squares
1000
750
1750
Degrees of freedom
4
15
19
Compute mean squares for between groups and within groups . Compute the F
ratio and test the hypothesis that the group means are equal.
Japanese
European
_________________________________________________
18
17.6
17.4
19.1
16.9
20.1
17.6
16.1
17.3
17.4
19.3
17.4
17.1
18.6
16.1
Analysis of Variance
SOURCE
Regression
Error
DF
5
20
SS
100
40
MS
20
2
Predictor
Coef
St Dev.
Constant
X1
X2
X3
X4
X5
3.00
4.00
3.00
0.20
-2.50
3.00
1.50
3.00
0.20
0.05
1.00
4.00
t statistic
2.00
1.33
15.00
4.00
-2.5
0.75
b. Write the Population regression model and the sample regression line.
c. Check whether the model is valid or not.
d. Test the regression coefficients individually. Would you consider omitting any
variables? If so, which one(s)? use .05 significance level.
e. Compute the R square and adjusted R square and interpret the result.
f. What assumption you have regarding the model error variance?
g.
assumptions of the multiple regression model do not hold in the above case for
example heteroscedasticity and if the residual terms are serially correlated .
[ E( i j ) 0 ]
DF = degrees of freedom
SS = Sum Square
MS= Mean square
Coef= coefficient
St. Dev = Standard deviation
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