0% found this document useful (1 vote)

3K views678 pages

Docx

This document contains a chapter summary and test bank for a business statistics textbook. It includes true/false questions, multiple choice questions, and short answer/essay questions covering topics in descriptive statistics, measurement scales, samples and populations, and how statistics are used in business decision making. Key topics assessed include the differences between descriptive and inferential statistics, measures of central tendency and dispersion, and the four measurement scales used in statistics.

Uploaded by

lana del rey

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

0% found this document useful (1 vote)

3K views678 pages

Docx

Uploaded by

lana del rey

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

You are on page 1/ 678

Chapter 1.

A Preview of
Business Statistics
Test Bank

TRUE/FALSE

1. True or False
Regardless of your eventual career destination, whether it is accounting or
marketing, finance or human resource management, you will find statistics
relevant to your field.

ANS: T PTS: 1 OBJ: Section 1.1

2. True or False
Business statistics can be described as the collection, summarization,
analysis,and reporting of numerical findings relative to a business decision or
situation.

ANS: T PTS: 1 OBJ: Section 1.1

3. True or False
The sole purpose of the U.S. Census Bureau is to simply count how many people
live in the United States.

ANS: F PTS: 1 OBJ: Section 1.2

4. True or False
ATP singles rankings for tennis players rank Rafael Nadal as 2 and Roger Federer
as 1. This is an example of an interval scale.

ANS: F PTS: 1 OBJ: Section 1.4

5. True or False
Quantitative variables usually represent membership in groups or categories.

ANS: F PTS: 1 OBJ: Section 1.4

6. True or False
In inferential statistics, we simply summarize and describe the data we’ve
collected.

ANS: F PTS: 1 OBJ: Section 1.3

7. True or False
The population is sometimes referred to as the universe and is the entire set of
people or objects of interest.

ANS: T PTS: 1 OBJ: Section 1.3

8. True or False
Prior to making decisions, companies often collect information through a series
of steps called the research process.

ANS: T PTS: 1 OBJ: Section 1.5

9. True or False
Improperly used, statistics can become an effective weapon with which to
persuade or manipulate others into beliefs or behaviors that we would like them
to adopt.

ANS: T PTS: 1 OBJ: Section 1.6

10. True or False

Unlike many other pursuits, improper actions in business statistics can
sometimes work in your favor.

ANS: T PTS: 1 OBJ: Section 1.6

11. True or False

In the nominal measurement scale numbers represent “greater than” or “less
than” measurements, such as rankings or preferences.

ANS: F PTS: 1 OBJ: Section 1.4

12. True or False

Stating that Wal-Mart’s sales increased 6.2% this quarter when compared to last
quarter is an example of descriptive statistics.
ANS: T PTS: 1 OBJ: Section 1.3

13. True or False

The sample statistic is a characteristic of the sample that the population
parameter attempts to estimate.

ANS: F PTS: 1 OBJ: Section 1.7

14. True or False

Six classmates told you their scores on the last statistics exam. Based on this
information, you conclude that the average exam score for the entire class was
82. This is an example of descriptive statistics.

ANS: F PTS: 1 OBJ: Section 1.3

MULTIPLE CHOICE

1. Which of the following statements involve descriptive statistics as opposed to

inferential statistics?
a. The Alcohol, Tobacco and Firearms Department reported that Houston had
1,791 registered gun dealers in 1997.
b. Based on a survey of 400 magazine readers, the magazine reports that 45%
of its readers prefer double column articles.
c. The FAA samples 500 traffic controllers in order to estimate the percent
retiring due to job stress related illness.
d. Based on a sample of 300 professional tennis players, a tennis magazine
reported that 25% of the parents of all professional tennis players did not play
tennis.
e. The admission’s office in a southern university samples 200 college students
in business in order to estimate the percentage of business majors who prefer
accounting to economics.
ANS: A PTS: 1 OBJ: Section 1.3

2. Which of the following statements involve inferential statistics as opposed to

descriptive statistics?
a. A total of 4,785 people voted for Mike Johnson in a local election.
b. The FAA reported there were 200 near misses among airplanes last year.
c. A class of fifty statistics students earned an average grade of 75.5.
d. The city business office reported 40 building permits for new single-family
housing units.
e. Based on a sample of 500 subscribers, a local cable system estimates that
forty percent of its subscribers watch a premium channel at least once per day.
ANS: E PTS: 1 OBJ: Section 1.3

3. Which of the following sample statistics is a measure of spread (dispersion)?

a. Sample mean
b. Sample standard deviation
c. Sample median
d. Sample proportion
e. Sample mode
ANS: B PTS: 1 OBJ: Section 1.3

4. A summary measure that is computed using the entire population is called:

a. a parameter
b. a statistic
c. a sample
d. inferential statistics
ANS: A PTS: 1 OBJ: Section 1.3

5. The difference between the highest and lowest values in the sample is known
as the sample:
a. mean
b. median
c. range
d. proportion
ANS: C PTS: 1 OBJ: Section 1.3

6. A summary measure that is computed from a sample to describe a

characteristic of the population is called:
a. a parameter
b. a statistic
c. a population
d. inferential statistics
ANS: B PTS: 1 OBJ: Section 1.3

7. When data are collected in a statistical study for only a portion or subset of all
elements of interest we are using a:
a. sample
b. parameter
c. statistic
d. population
ANS: A PTS: 1 OBJ: Section 1.3

8. Which of the following is not the goal of descriptive statistics?

a. Summarizing data
b. Displaying aspects of the collected data
c. Reporting numerical findings
d. Estimating characteristics of the population
ANS: D PTS: 1 OBJ: Section 1.3

9. Which of the following is most likely a continuous quantitative variable?

a. The number of gallons of paint purchased.
b. The number of quarts of milk purchased.
c. The population of Egypt.
d. The number of miles of interstate highways.
e. The number of times you sharpen your pencil working statistics problems.
ANS: D PTS: 1 OBJ: Section 1.4

10. The statistic that describes the midpoint of the data which has just as many
values above it as below it is known as the sample:
a. mean
b. median
c. mode
d. range
e. standard deviation
ANS: B PTS: 1 OBJ: Section 1.3
11. Daily ambient temperatures in degrees Fahrenheit are being recorded for a
global warming study. This scale of measurement for this data would be:
a. nominal
b. ordinal
c. interval
d. ratio
ANS: C PTS: 1 OBJ: Section 1.4

12. An automobile insurance agent believes that company A is more reliable

than company B. Which scale of measurement does this information represent?
a. Nominal
b. Ordinal
c. Interval
d. Ratio
ANS: B PTS: 1 OBJ: Section 1.4

13. A customer service survey asks respondents for their birthdates, which are
used to calculate their ages. Which scale of measurement does age represent?
a. nominal
b. ordinal
c. interval
d. ratio
ANS: D PTS: 1 OBJ: Section 1.4

14. Which of the following statements is false?

a. Statistics can be divided into two branches: descriptive and inferential.
b. The mean, median and mode, are measures of typicalness or central
tendency.
c. The range and standard deviation are measures of spread or dispersion or
variability.
d. A discrete quantitative variable can take on a value at any point along an
interval.
e. The four scales of measurement are important in determining appropriate
methods for data description and analysis.
ANS: D PTS: 1 OBJ: Section 1.7
15. A survey that asks the respondent to indicate the number of cats in the
household is an example of which type of variable?
a. discrete qualitative
b. continuous qualitative
c. discrete quantitative
d. continuous quantitative
ANS: C PTS: 1 OBJ: Section 1.4

COMPLETION

1. When a sample is so large as to include all members of the population, it is

referred to as a completed ____________________.

ANS: census

PTS: 1 OBJ: Section 1.3

2. The temperature of the room in which you are taking this test is a
____________________ quantitative variable.

ANS: continuous

PTS: 1 OBJ: Section 1.4

3. The distinguishing feature of discrete variables is that ____________________

exist between the possible values.

ANS: gaps

PTS: 1 OBJ: Section 1.4

4. Prior to making decisions, companies often collect information through a

series of steps called the ___________________________________.

ANS: research process

PTS: 1 OBJ: Section 1.5

MATCHING
Match the terms with the definitions. (Note: there are more definitions than
terms)
a. a characteristic of the population
b. indicates that a person or object belongs in a category
c. the entire set of people or objects of interest
d. the arithmetic average of the data
e. a measurement scale with an absolute zero
f. a measured characteristic of a sample
g. helps us determine how much of something is possessed
h. a subset of people or objects that exist within the entire set
1. population

2. sample

3. parameter

4. statistic

5. quantitative variable

6. qualitative variable

1. ANS: C PTS: 1 OBJ: Section 1.3

2. ANS: H PTS: 1 OBJ: Section 1.3

3. ANS: A PTS: 1 OBJ: Section 1.3

4. ANS: F PTS: 1 OBJ: Section 1.3

5. ANS: G PTS: 1 OBJ: Section 1.4

6. ANS: B PTS: 1 OBJ: Section 1.4

SHORT ANSWER

1. A recent Wall Street Journal poll asked a group of American voters to rate
economic conditions in the United States. 22% of the respondents rated
economic conditions as “favorable.” Identify the population, sample, sample
statistic, and population parameter in this survey.
Population: ________________________________________

Sample: ________________________________________

Sample statistic: ________________________________________

Population parameter: ________________________________________.

ANS:
All eligible voters in the U.S.; Voters selected to participate in the survey.; 22%;
The percentage of all voters who would rate economic conditions as favorable.

PTS: 1 OBJ: Section 1.3

ESSAY

1. As a business person, in what ways may you find yourself involved with
statistics?

ANS:
You may find yourself involved with statistics in at least one of the following
ways: (a) as a practitioner collecting, analyzing, and presenting findings based
on statistical data, or (b) as a consumer of statistical claims and findings offered
by others, some of whom may be either incompetent or unethical.

PTS: 1 OBJ: Section 1.1

2. What is business statistics?

ANS:
Business statistics can be described as the collection, summarization, analysis,
and reporting of numerical findings relevant to a business decision or situation.

PTS: 1 OBJ: Section 1.1

3. What was the primary use of statistics in ancient times?

PTS: 1 OBJ: Section 1.3

13. For each of the following indicate whether the variable of interest would be
qualitative or quantitative.
A) Whether you are a US citizen
B) Your marital status
C) Number of cars in a parking lot
D) Amount of time you spend per week on your homework
E) Lily’s travel time from her apartment to the student union at Central Michigan
University
F) Heidi’s favorite brand of tennis balls

ANS:
Qualitative; Qualitative; Quantitative; Quantitative; Quantitative; Qualitative

PTS: 1 OBJ: Section 1.4

14. Before leaving a particular restaurant, customers are asked to respond to

the questions listed below. For each question, determine whether the possible
responses are discrete or continuous variables.
A) What is the approximate distance of the restaurant from your residence?
B) How many minutes did you wait until your server greeted you?
C) How many times a month do you typically dine out?
D) How many people were in your dinner party tonight?

ANS:
Continuous; Continuous; Discrete; Discrete

PTS: 1 OBJ: Section 1.4

15. A research firm observes that men are twice as likely as women to hunt.
Does this information represent descriptive statistics or inferential statistics?
Why?
ANS:
Inferential; This information would represent inferential statistics, since a sample
is used to make generalizations about the population.

PTS: 1 OBJ: Section 1.3

Chapter 2. Visual Description

of Data
Test Bank

TRUE/FALSE

1. True or False
Raw data are converted to frequency distributions and visual displays that
provide us with a “big picture” of the information collected.

ANS: T PTS: 1 OBJ: Section 2.1

2. True or False
The appropriate methods for representing the data do not depend on whether
the variable of interest is quantitative or qualitative.

ANS: F PTS: 1 OBJ: Section 2.1

3. True or False
Contingency tables are used primarily for counts involving qualitative data.

ANS: T PTS: 1 OBJ: Section 2.1

4. True or False
In a raw data listing, data are listed in increasing or decreasing numerical order.

ANS: F PTS: 1 OBJ: Section 2.2

5. True or False
Compared to the frequency distribution, the stem-and-leaf display provides
more detail since it can describe the individual data values as well as show how
many are in each group, or stem.
ANS: T PTS: 1 OBJ: Section 2.3

6. True or False
The following stem-and-leaf output has been generated by Minitab. This data
has a negative mode.

ANS: T PTS: 1 OBJ: Section 2.3

7. True or False
When some of the variables represent categories, we can apply a useful
summarization method called tabulation, where we simply count how many
people or items are in each category or combination of categories.

ANS: T PTS: 1 OBJ: Section 2.6

8. True or False
To more concisely communicate the information contained, raw data can be
visually represented and expressed in terms of statistical summary measures.

ANS: T PTS: 1 OBJ: Section 2.7

9. True or False
A histogram describes a frequency distribution by using a series of adjacent
rectangles, each of which has a length that is proportional to the frequency of
observations within the range of values it represents.

ANS: T PTS: 1 OBJ: Section 2.1

10. True or False

A frequency distribution may be converted to show either relative or cumulative
frequencies for the data.

ANS: T PTS: 1 OBJ: Section 2.2

11. True or False

The set of classes in the frequency distribution should be selected so that any
given value falls into at least one category.

ANS: F PTS: 1 OBJ: Section 2.2

12. True or False
The simple tabulation and cross-tabulation are tabular methods that can be
extended to include the mean or other measures of a selected quantitative
variable for persons or items within a category or combination of categories.

ANS: T PTS: 1 OBJ: Section 2.7

13. True or False

The width (class interval) of a frequency distribution class is the difference
between the smallest and largest values in a data set.

ANS: F PTS: 1 OBJ: Section 2.2

MULTIPLE CHOICE

1. Which of the following techniques are applicable to quantitative data?

a. The data array
b. Frequency distributions
c. Stem-and-leaf display
d. Scatter diagram and Dotplot
e. All of these
ANS: E PTS: 1 OBJ: Section 2.1

2. The midway point between the upper and lower class limits for a frequency
distribution is known as the:
a. class interval.
b. class width.
c. class mark.
d. class frequency.
e. class average.
ANS: C PTS: 1 OBJ: Section 2.2

3. The __________ consists of line segments connecting the points formed by the
intersections of the class marks with the class frequencies.
a. frequency polygon
b. histogram
c. stem-and-leaf diagram
d. scatter plot
e. bar graph
ANS: A PTS: 1 OBJ: Section 2.2

4. The class interval is the:

a. number of categories of the frequency distribution.
b. number of data values falling within each class.
c. lower and upper limits of each class.
d. width of each class.
e. mid-point of each class.
ANS: D PTS: 1 OBJ: Section 2.2

5. The __________ is a graphical display providing cumulative values for

frequencies, relative frequencies, or percentages.
a. stem-and-leaf display
b. dotplot
c. line graph
d. pie chart
e. ogive
ANS: E PTS: 1 OBJ: Section 2.2

6. Class limits are the:

a. number of categories of the frequency distribution.
b. number of data values falling within each class.
c. lower and upper boundaries of each class.
d. width of each class.
e. mid-point of each class.
ANS: C PTS: 1 OBJ: Section 2.2

7. The largest value in a set of data is 160, and the smallest value is 70. If the
resulting frequency distribution is to have six classes of equal width, what will be
the class interval?
a. 15
b. 6
c. 12
d. 5
ANS: A PTS: 1 OBJ: Section 2.2

8. A requirement for a frequency distribution is that the set of classes must be

mutually exclusive. This means that
a. the set of classes must include all possible data values.
b. a given data value can fall into only one class.
c. the classes must have equal widths.
d. classes must have an upper limit.
e. classes must have a lower limit.
ANS: B PTS: 1 OBJ: Section 2.2

9. A frequency distribution is a(n):

a. table of the individual observations collected from a sample.
b. individual listing of the random values found in a data set.
c. listing of the individual observations arranged in ascending or descending
order.
d. table, which classifies the number of data values into classes.
ANS: D PTS: 1 OBJ: Section 2.2

10. The relative frequency distribution describes the

11. The cumulative frequency distribution describes the

a. number of observations that fall within each class.
b. proportion of observations that fall within each class.
c. number of observations that are within or below each of the classes.
d. proportion of observations that are within or below each of the classes.
e. None of these is correct.
ANS: C PTS: 1 OBJ: Section 2.2
12. Which of the following is not a guideline for constructing a frequency
distribution?
a. If possible, open-end classes should be avoided.
b. The set of classes must be mutually exclusive and exhaustive.
c. Whenever possible, the classes should have equal width.
d. Whenever possible, class widths should be round numbers.
e. All of these are guidelines for constructing a frequency distribution.
ANS: E PTS: 1 OBJ: Section 2.2

13. In a scatter diagram, data are represented as:

a. dots which allow us to readily see the shape of the distribution as well as the
high and low values.
b. frequencies according to the relative length of a set of rectangles.
c. a subset of the original digits as class descriptors.
d. a circular display divided into sections based on the number of observations
within the segments.
e. pairs of known values of two variables, one being referred to as independent
and the other, dependent.
ANS: E PTS: 1 OBJ: Section 2.5

14. In the stem-and-leaf display, data are represented as:

15. A stem-and-leaf display describes two-digit integers between 20 and 80. For
one of the classes displayed, the row appears as 5|246. What numerical values
are being described?
a. 25, 45, and 65
b. 60, 50, 40, and 20
c. 52, 54, and 56
d. 46 and 52
ANS: C PTS: 1 OBJ: Section 2.3

16. The following stem-and-leaf output has been generated by Minitab.

Which of the following statements are correct?

a. This data set has a mean that is negative.
b. This data set has a median less than -0.5
c. There is no modal class
d. This data set has six negative values
e. All of these are correct
ANS: E PTS: 1 OBJ: Section 2.3

17. The difference between a histogram and a bar chart is that:

a. the histogram reflects qualitative data while the bar chart represents
quantitative data.
b. the adjacent rectangles in a histogram have a gap while those for a bar chart
do not.
c. the histogram reflects quantitative data while the bar chart represents
qualitative data.
d. the adjacent rectangles in a bar chart have a gap while those for a histogram
usually do not.
e. Both answers C and D are correct.
ANS: E PTS: 1 OBJ: Section 2.4

18. In cross-tabulation:
a. data are represented in a table showing how many people or items are in
combinations of categories.
b. we can identify possible relationships between the variables.
c. data are represented as a circular display divided into sections based on the
number of observations within the segments.
d. data are represented as a pair of known values of two variables, one being
referred to as independent and the other, dependent.
e. Both A and B are correct.
ANS: E PTS: 1 OBJ: Section 2.6

19. In a __________, we can generate a display that describes how a selected

qualitative variable tends to differ from one category to another.
a. histogram
b. crosstab
c. relative frequency distribution
d. pie chart
e. line graph
ANS: B PTS: 1 OBJ: Section 2.6

NUMERIC RESPONSE

1. The following stem-and-leaf output has been generated by Minitab.

How many values are positive?

ANS: 4

PTS: 1 OBJ: Section 2.3

2. The grades on a chemistry exam for a sample of 40 students are as follows:

Estimate the percentage of grades that are between 80 and 90.

ANS: 12.5%

PTS: 1 OBJ: Section 2.2

COMPLETION

1. A cumulative frequency distribution lists the number of observations that are

within or ____________________ each of the classes.

ANS: below

PTS: 1 OBJ: Section 2.2

2. A relative frequency distribution describes the____________________ or

____________________ of data values that fall within each category.
ANS: proportion; percentage

PTS: 1 OBJ: Section 2.2

3. The ____________________ describes a frequency distribution by using a series

of adjacent rectangles with no gaps in-between, each of which has the length
that is proportional to the frequency of the observations within the range of
values it represents.

ANS: histogram

PTS: 1 OBJ: Section 2.2

4. ____________________ is also known as marginal or one-way tabulation.

ANS: Simple tabulation

PTS: 1 OBJ: Section 2.6

5. The ____________________ is also known as the contingency table.

ANS: cross-tabulation

PTS: 1 OBJ: Section 2.6

6. The ____________________ is a diagram in which each point represents a pair of

known or observed values of two variables.

ANS: scatter diagram

PTS: 1 OBJ: Section 2.5

7. The ____________________ a variant of the frequency distribution, uses a subset

of the original digits in the raw data as class descriptors and class members.

ANS: stem-and-leaf display

PTS: 1 OBJ: Section 2.3

SHORT ANSWER

1. A physician takes the following sample of blood cholesterol levels form a

group of volunteers (one reading per volunteer): 221, 202, 216, 227, 232, 218,
225, 234, 203, 247.
a. In what form, if any are these data organized?
b. Construct a frequency distribution, with class intervals of 10 points for these
results.

ANS:
a. Raw data
b.
Cholesterol Number of Readings
200-209 2
210-219 2
220-229 3
230-239 2
240-249 1
PTS: 1 OBJ: Section 2.2

2.
Price of a Home Number of Homes Sold
Under $100,000 35
$100,000 – under $120,000 45
$120,000 – under $140,000 60
$140,000 – under $160,000 75
$160,000 – under $180,000 55
$180,000 – under $200,000 30

a. What is the frequency of the $120,000 – under $140,000 class?

b. What is the width of each class?
c. What is the class mark for the $140,000 – under $160,000 class?
d. If we were to convert thee data to a relative frequency distribution, what
value would be associated with the $180,000 – under $200,000 class?
e. For a cumulative frequency distribution (less than or within), what value
would be associated with the $160,000 – under $180,000 class?
f. For a cumulative relative frequency distribution (less than or within), what
value would be associated with the $100,000 – under $120,000 class?
ANS:
a. 60
b. $20,000
c. $150,000
d. 0.10
e. 270
f..2667

PTS: 1 OBJ: Section 2.2

3. Voters participating in a recent election exit poll in Michigan were asked to

state their political party affiliation. Coding the data 1 for Democrat, 2 for
Republican and 3 for Independent, the data collected were as follows: 1, 1, 2, 3,
1, 2, 3, 2, 1, 2, 3, 2, 1, 1, 3, 2, 1, 1, 1, 2, 3, 2, 1, 1, 3

Develop a frequency distribution and proportion distribution for the data. What
does the data suggest about the strength of the political parties in Michigan?

ANS:

Party Frequency Proportion

Democrat 11 0.44
Republican 8 0.32
Independent 6 0.24
The Democratic Party in Michigan is stronger than the Republican and
Independent parties.

PTS: 1 OBJ: Section 2.2

4. Consider the following cumulative frequency distribution.

Class Limits Cumulative Frequency

0 – under 5 10
5 – under 10 15
10 – under 15 21
15 – under 20 29
20 – under 25 36
Find the frequencies for each of the following classes:
a. 0 – under 5
b. 5 – under 10
c. 10 – under 15
d. 15 – under 20
e. 20 – under 25

ANS:
a. 10
b. 5
c. 6
d. 8
e. 7

PTS: 1 OBJ: Section 2.2

5. The grades on a statistics exam for a sample of 40 students are as follows:

63 74 42 65 51 54 36 56 68 57
62 64 76 67 79 61 81 77 59 38
84 68 71 94 71 86 69 75 91 55
48 82 83 54 79 62 68 58 41 47

Construct frequency and relative frequency distributions for the data using
seven class intervals.

ANS:

Class Limits Frequency Relative Frequency

30 up to 40 2 .050
40 up to 50 4 .100
50 up to 60 8 .200
60 up to 70 11 .275
70 up to 80 8 .200
80 up to 90 5 .125
90 up to 100 2 .050
TOTAL 40 1.000
PTS: 1 OBJ: Section 2.2

6. The following table represents exam grades from 36 students in a statistics

class. Construct a stem-and-leaf display.

60 79 75 84 85 74
81 95 89 58 66 98
99 99 62 86 85 99
79 82 98 72 72 72
75 88 86 81 96 86
78 91 83 85 92 68
ANS:
5|8
6|0268
7|222455899
8|1123455566689
9|125688999

PTS: 1 OBJ: Section 2.3

7. The following table represents exam grades from 36 students in a statistics

class. Construct a pie chart using classes with grades 51-60, 61-70, 71-80, 81-
90, and 91-100.

60 79 75 84 85 74
81 95 89 58 66 98
99 99 62 86 85 99
79 82 98 72 72 72
75 88 86 81 96 86
78 91 83 85 92 68
ANS:

PTS: 1 OBJ: Section 2.4

8. A medical statistician wanted to examine the relationship between the

amount of sunshine (x) and incidence of skin cancer (y). As an experiment he
found the number of skin cancers detected per 100,000 of population and the
average daily sunshine in eight counties around the country. These data are
shown below.

Draw a scatter plot and find the least squares regression line.

____________________

ANS:

= -1.115 + 1.846x

PTS: 1 OBJ: Section 2.5

9. The general manager of a chain of furniture stores believes that experience is

the most important factor in determining the level of success of a salesperson.
To examine this belief she records last month’s sales (in $1,000s) and the years
of experience of 10 randomly selected salespeople. These data are listed below.
Draw a scatter diagram of the data and determine the least squares regression
line.

ANS:

= 8.63 + 1.0817x

PTS: 1 OBJ: Section 2.5

10. The ages for a sample of 25 car dealers are as follows:

30 40 31 41 53 37 54 28 45 30
45 21 32 34 26 34 24 24 35 47
38 45 28 43 35

Use Minitab to draw each of the following graphs.

a. A stem and leaf plot
b. a dot plot

ANS:
a)
Stem-and-leaf of Age N = 25
Leaf Unit = 1.0
3 2 144
6 2 688
12 3 001244
(4) 3 5578
9 4 013
6 4 5557
2 5 34

PTS: 1 OBJ: Section 2.3

11. Voters participating in a recent election exit poll in Michigan were asked to
state their political party affiliation. Coding the data 1 for Republican, 2 for
Democrat and 3 for Independent, the data collected were as follows: 3, 2, 3, 2,
1, 1, 3, 2, 1, 3, 1, 2, 3, 1, 3, 3, 3, 3, 2, 1, 1, 3, 2, 3, 1

Construct a frequency bar chart.

ANS:

PTS: 1 OBJ: Section 2.4

12. A grocery store’s monthly sales (in thousands of dollars) for the last year
was as follows:

Month 1 2 3 4 5 6 7 8 9 10 11 12
Sales 78 74 83 87 85 93 100 105 103 89 78 94

Construct a line graph for these data.

ANS:

PTS: 1 OBJ: Section 2.4

13. The ages of a sample of 25 salespersons are as follows:

47 21 37 53 28 40 30 32 34
34 24 24 35 45 38 35 28 43
30 45 31 41 54 26 45
Use Excel or Minitab to draw a histogram with five classes.

ANS:

6. What is the difference between a histogram and a bar chart? For what type of
data would each be appropriate?

ANS:
A histogram graphically displays class intervals as well as class frequencies. A
bar chart displays the frequencies for a set of categories or classes. Histograms
are appropriate for quantitative data, while bar charts are better for qualitative
data. Adjacent rectangles in the histogram share a common side while those in
the bar chart have a gap between them.

PTS: 1 OBJ: Section 2.4

7. What is a scatter diagram, and for what kind of data is it a useful descriptive
device?

ANS:
A scatter diagram is a plot in which each point represents a pair of known or
observed values of x and y. The variables are represented on the horizontal (x)
and vertical (y) axes. The scatter diagram is useful in examining whether the
variables might be related to each other in some way.

PTS: 1 OBJ: Section 2.5

8. Differentiate between a positive linear relationship and a negative linear

relationship between variables.

ANS:
In a positive linear relationship, y tends to increase linearly with increases in x.
In a negative linear relationship, y tends to decrease linearly as x increases.

PTS: 1 OBJ: Section 2.5

9. A professor of economics wants to study the relationship between income and

education. A sample of 10 individuals is selected at random, and their income
(in thousand of dollars) and education (in years) are shown below:

Draw a scatter diagram for these data with the income on the vertical axis.
Describe the relationship between income and education.

ANS:

There is a very strong positive relationship between education and income; as

years of education increase, there is a definite tendency for income to linearly
increase.
PTS: 1 OBJ: Section 2.5

10. The general manager of a chain of furniture stores believes that experience
is the most important factor in determining the level of success of a
salesperson. To examine this belief she records last month’s sales (in $1,000s)
and the years of experience of 10 randomly selected salespeople. These data
are listed below.

Interpret the value of the slope of the regression line.

ANS:
For each additional year of experience, monthly sales of a salesperson increase
on average by $1,081.70.

PTS: 1 OBJ: Section 2.5

11. When variables are used as the basis for a cross-tabulation, what scale of
measurement must they represent?

ANS:
The classificatory variables that represent the rows and columns in cross-
tabulation (contingency tables) will be in the nominal scale of measurement.
The variables described within the table can be nominal (categories) when
counts are being expressed. They can be interval or ratio when measures such
as the mean or median are being expressed.

PTS: 1 OBJ: Section 2.6

12. Define and give a real or hypothetical example of simple tabulation.

ANS:
Simple tabulation involves just one variable. Example: we may express a count
of how many students in a class are males and how many are females.

PTS: 1 OBJ: Section 2.6

13. Define and give a real or hypothetical example of cross-tabulation.

ANS:
In cross-tabulation, we express a count of how many people or items are in
combinations of categories. Example: we may express a count of how many
students in a class are males majoring in accounting and how many are females
majoring in finance.

PTS: 1 OBJ: Section 2.6

14. A recent Wall Street Journal survey found that 523 Democrats and 765
Republicans and believe legal immigration has a positive effect on the Untied
States. Display this data in a bar chart.

ANS:

PTS: 1 OBJ: Section 2.4

Chapter 3. Statistical
Description of Data
Test Bank

TRUE/FALSE

9. True or False
The mean of a set of values describes the 50th percentile.

ANS: F PTS: 1 OBJ: Section 3.3

10. True or False

Standardized values have no units, even though the original data, the standard
deviation, and the mean may each represent units such as dollars, hours, or
pounds.

ANS: T PTS: 1 OBJ: Section 3.4

11. True or False
A standardized value that is either a large positive number or a large negative
number is a relatively usual occurrence.

ANS: F PTS: 1 OBJ: Section 3.4

12. True or False

The range is a measure of dispersion that includes all the values in the data set
in the calculation.

ANS: F PTS: 1 OBJ: Section 3.3

13. True or False

The box-and-whisker plot is a graphical device that simultaneously displays
measures of central tendency and dispersion.

ANS: T PTS: 1 OBJ: Section 3.4

14. True or False

The Empirical Rule states that approximately 68% of the observations in any
distribution will fall within one standard deviation of the mean.

ANS: F PTS: 1 OBJ: Section 3.4

15. True or False

Measures of central tendency and dispersion determined from frequency
distributions are only approximations of the actual values.

ANS: T PTS: 1 OBJ: Section 3.5

MULTIPLE CHOICE

1. Which of the following is not a measure of central tendency?

a. Mean absolute deviation
b. Arithmetic mean
c. Weighted mean
d. Median
e. Mode
ANS: A PTS: 1 OBJ: Section 3.1
2. Which of the following is not a measure of dispersion?
a. Mean absolute deviation
b. Quantiles
c. Weighted mean
d. Range
e. Standard deviation.
ANS: C PTS: 1 OBJ: Section 3.1

3. The measure of central tendency that is least affected by extreme values is

the:
a. the weighted mean.
b. the mean.
c. the variance.
d. the standard deviation.
e. the median.
ANS: E PTS: 1 OBJ: Section 3.2

4. The measure of central tendency that is most affected by extreme values is

the:
a. range.
b. mean.
c. median.
d. mode.
e. coefficient of variation.
ANS: B PTS: 1 OBJ: Section 3.2

5. Which of the following statements is true regarding the normal distribution?

a. The mean is greater than the median and the median is greater than the
mode.
b. The mean is less than the median and the median is less than the mode.
c. There is no difference in the values of the mean, median, and mode.
d. The mean is greater than the mode, which in turn is greater than the median.
e. The mean is less than the mode, which in turn is less than the median.
ANS: C PTS: 1 OBJ: Section 3.2
6. In a positively skewed distribution, the:
a. mean is greater than the median and the median is greater than the mode.
b. mean is greater than the median and the median is smaller than the mode.
c. mean is smaller than the median and the median is greater than the mode.
d. mean is smaller than the median and the median is smaller than the mode.
e. mean is equal to the median and the median is equal to the mode.
ANS: A PTS: 1 OBJ: Section 3.2

7. In a negatively skewed distribution, the:

a. mean is greater than the median and the median is greater than the mode.
b. mean is greater than the median and the median is smaller than the mode.
c. mean is smaller than the median and the median is greater than the mode.
d. mean is smaller than the median and the median is smaller than the mode.
e. mean is equal to the median and the median is equal to the mode.
ANS: D PTS: 1 OBJ: Section 3.2

8. When a distribution is bell-shaped with the left half identical to the right half,
it is:
a. skewed positively
b. symmetrical
c. equilateral
d. skewed negatively
e. not applicable for Chebyshev’s theorem
ANS: B PTS: 1 OBJ: Section 3.2

9. The value in the data set that occurs with the greatest frequency is known as
the:
a. mode.
b. median.
c. mean.
d. weighted mean.
e. variance.
ANS: A PTS: 1 OBJ: Section 3.2
10. The average score for a class of 25 students was 75. If the 15 female
students in the class averaged 70, then the male students in the class averaged:
a. 85.0
b. 82.5
c. 77.5
d. 75.0
e. 70.0
ANS: B PTS: 1 OBJ: Section 3.2

11. Which of the following statements are true for the following data values: 9,
7, 8, 6, 9, 10, and 14?
a. The mean, median and mode are all equal
b. Only the mean and median are equal
c. Only the mean and mode are equal
d. Only the median and mode are equal
ANS: A PTS: 1 OBJ: Section 3.2

12. Which of the measures of central tendency would best represent the data
below?

a. Range
b. Mean
c. Median
d. Mode
e. Standard deviation
ANS: C PTS: 1 OBJ: Section 3.2

13. Which of the following statements is correct?

a. The mode gives equal consideration to even very extreme values in the data.
b. There will be just one value for the mean, median , and mode in the data set.
c. The median can be strongly influenced by just one or two very low or high
values.
d. The mean is able to make the most complete use of the data when compared
to the median and mode.
e. None of the above are correct.
ANS: D PTS: 1 OBJ: Section 3.2

14. Which of the following statements is correct?

a. The range is found by taking the difference between the high and low values
and dividing by 2.
b. The interquartile range is found by taking the difference between the 1st and
3rd quartiles and dividing that value by 2.
c. The standard deviation is expressed in terms of the original units of
measurement but the variance is not.
d. The values of the standard deviation may be either positive or negative, while
the value of the variance will always be positive.
e. None of these statements is true.
ANS: C PTS: 1 OBJ: Section 3.3

15. Which of the following statements is correct?

a. The mean is a measure of the deviation in a data set.
b. The standard deviation is a measure of dispersion.
c. The range is a measure of central tendency.
d. The median is a measure of dispersion.
e. The variance is a measure of central tendency.
ANS: B PTS: 1 OBJ: Section 3.3

16. The difference between the largest and smallest values in a data set is
called the:
a. standard deviation.
b. variance.
c. coefficient of variation.
d. range.
e. mean.
ANS: D PTS: 1 OBJ: Section 3.3

17. Deciles:
a. are an array of values in 10 parts of equal size.
b. indicate the median with the fifth decile.
c. divide the values into four parts of equal size.
d. indicate the median with the second decile.
e. both A and B are correct.
ANS: E PTS: 1 OBJ: Section 3.3

18. Which of the following is the simplest measure of dispersion?

a. Range
b. Mean absolute deviation
c. Standard deviation
d. Coefficient of variation
e. Variance
ANS: A PTS: 1 OBJ: Section 3.3

19. Which of the following is not a measure of variability?

a. The range
b. The variance
c. The standard deviation
d. The median
e. The interquartile range
ANS: D PTS: 1 OBJ: Section 3.3

20. Expressed in percentiles, the interquartile range is the difference between

the:
a. 15th and 65th percentiles
b. 20th and 70th percentiles
c. 25th and 75th percentiles
d. 30th and 80th percentiles
e. 35th and 85th percentiles
ANS: C PTS: 1 OBJ: Section 3.3

21. A sample of 15 observations has a standard deviation of 4. The sum of the

squared deviations from the sample mean is:
a. 19
b. 56
c. 60
d. 224
e. 240
ANS: D PTS: 1 OBJ: Section 3.3

22. Which of the following is not a correct statement?

a. The coefficient of variation allows us to compare two sets of data based on
different measurement units.
b. Chebyshev’s theorem applies only to normal distributions.
c. Standardized values have no units of measure.
d. For distributions that are bell-shaped and symmetric, about 68% of the
observations will fall within one standard deviation of the mean.
e. The vertical line within the box in the box-and-whisker plot represents the
median.
ANS: B PTS: 1 OBJ: Section 3.4

23. Chebyshev’s Theorem states that the percentage of observations in a data

set that should fall within five standard deviations of their mean is:
a. 90%.
b. at least 90%.
c. 96%.
d. at least 96%.
e. 25%.
ANS: D PTS: 1 OBJ: Section 3.4

24. The Empirical Rule states that the percentage of observations in a data set
(providing that the data set has a bell-shaped and symmetric distribution) that
fall within one standard deviation of their mean is approximately:
a. 68%
b. 75%
c. 95%
d. 99%
ANS: A PTS: 1 OBJ: Section 3.4

25. A study was conducted of the 12-month earnings per share for two
categories of airline companies.
Based on the above data, which of the following statements is correct?
a. The large airlines have a coefficient of variation of 2.44 while the small
airlines have a coefficient of variation of 3.64.
b. Because the large airlines have mean earnings per share of 3.40 and the
small airlines have mean earnings per share of 1.11, the large airlines have the
largest coefficient of variation.
c. Because the large airlines have mean earnings per share of 3.54 and the
small airlines have mean earnings per share of 1.71, the large airlines have the
largest coefficient of variation.
d. The large airlines have a coefficient of variation of 0.85 and the small airlines
have a coefficient of variation of 2.72.
e. The large airlines have a coefficient of variation of 0.81 and the small airlines
have a coefficient of variation of 1.17.
ANS: D PTS: 1 OBJ: Section 3.4

26. The length of the box in the box-and-whisker plot portrays the:
a. mean
b. median
c. range
d. interquartile range
ANS: D PTS: 1 OBJ: Section 3.4

27. For a set of data, the mean is 50 and the standard deviation is 10. In the raw
data, one of the observations is equal to 74. After the data are standardized,
what will be the standardized value of this observation?
a. +7.4
b. -7.4
c. +2.4
d. -2.4
ANS: C PTS: 1 OBJ: Section 3.4

28. When the standard deviation is expressed as a percentage of the mean, the
result is the:
a. coefficient of correlation.
b. coefficient of determination.
c. coefficient of variation.
d. coefficient of dispersion.
ANS: C PTS: 1 OBJ: Section 3.4

29. Which of the following statements is not correct?

a. Measures of central tendency determined from frequency distributions will
only be approximations of the actual values.
b. Measures of dispersion determined from frequency distributions will only be
approximations of the actual values.
c. In grouped data, each observation is given the value of its classification’s mid-
point.
d. When data are grouped, the value of each individual observation is lost.
e. All of the above statements are correct.
ANS: E PTS: 1 OBJ: Section 3.5

30. If the coefficient of correlation , then the best-fit linear equation will include:
a. 75% of the data points.
b. 85% of the data points.
c. 95% of the data points.
d. all of the data points.
ANS: D PTS: 1 OBJ: Section 3.6

31. The coefficient of correlation r is a number that indicates the:

a. direction of the relationship between the dependent variable y and the
independent variable x.
b. strength of the relationship between the dependent variable y and the
independent variable x.
c. proportion of the variation in the dependent variable y that is explained by
the independent variable x.
d. Only A and B are correct.
e. A, B, and C are all correct.
ANS: D PTS: 1 OBJ: Section 3.6

32. If the coefficient of correlation r = 0, then:

a. the slope of the regression line is zero.
b. there is no linear relationship whatsoever between the dependent variable y
and the independent variable x.
c. the coefficient of determination is zero.
d. All of these are correct.
e. None of these is correct.
ANS: D PTS: 1 OBJ: Section 3.6

33. The numerical value of the coefficient of determination r 2

a. is the proportion of the variation in the dependent variable y that is explained
by the best-fit linear equation.
b. is the proportion of the variation in the independent variable x that is
explained by the best-fit linear equation.
c. indicates the direction of the relationship between the dependent variable y
and the independent variable x.
d. Both A and B are correct.
e. A, B, and C are all correct.
ANS: A PTS: 1 OBJ: Section 3.6

34. A perfect straight line sloping upward would produce a correlation coefficient
equal to:
a. +1.
b. -1.
c. +2.
d. -2.
ANS: A PTS: 1 OBJ: Section 3.6

35. The difference between the mean of a data set and the individual values of
that set is known as the:
a. variance
b. standard deviation
c. residual
d. mean absolute deviation
e. quartile
ANS: C PTS: 1 OBJ: Section 3.3
NUMERIC RESPONSE

1. Heidi has been keeping track of what she spends to eat out. The last week’s
expenditures (in dollars) for meals eaten out were 3.69, 3.95, 4.19, 8.91, 5.49,
12.53, and 5.66. Calculate the mean amount she spent on meals last week.

ANS: $6.35

PTS: 1 OBJ: Section 3.2

2. A sample of 10 U.S. families spent the following amounts (in dollars) on

groceries during a one-week period: 31.36, 68.76, 12.25, 10.85, 24.89, 31.48,
49.52, 48.24, 30.04, and 25.63. Find the median amount spent on groceries.

ANS: $30.70

PTS: 1 OBJ: Section 3.2

3. For each of the past 10 years, the U.S. unemployment rate has been recorded
as follows: 6.7, 5.5, 5.7, 5.2, 4.5, 3.8, 3.8, 3.6, 3.5, and 4.9. Find the mean
unemployment rate for this period.

ANS: 4.72

PTS: 1 OBJ: Section 3.2

4. A sample of interest rates on unpaid credit card balances yields the following
data: 13.25, 13.67, 13.60, 13.29, 12.97, 12.90, 12.76, 12.66, 12.58, 12.77, and
12.91. Find the median interest rate.

8. A student scores 89, 72, 93, and 84 on four exams during the semester and
96 on the final exam. If the final is weighted double and the four others
weighted equally, what would the student’s final average be?

13. Consider the following sample data: 4, 14, 6, 9, 21, 3, 7, and 10.
Calculate the mean.

ANS: 9.25

PTS: 1 OBJ: Section 3.2

14. Consider the following sample data: 4, 14, 6, 9, 21, 3, 7, and 10.

Calculate the median.

ANS: 8.00

PTS: 1 OBJ: Section 3.2

15. Find the range for the following data: 9, 94, 48, 62, 11, 50, and 6.

ANS: 88

PTS: 1 OBJ: Section 3.3

16. Find the midrange for the following data: 14, 99, 53, 67, 16, 55, and 11.

PTS: 1 OBJ: Section 3.4

32. Your final statistics grade will be based on your final exam score, a
homework score, and a final project, each weighted according to the following
table.

Type Score Weight

Exam 94 50%
Project 89 35%
Homework 83 15%

Determine your final grade.

ANS: 90.6

PTS: 1 OBJ: Section 3.2

33. The following table represents the number of days that a hardware store
experienced various daily demands for a particular hammer during the past 65
days of business.

Daily Demand Number of Days

0 10
1 15
2 12
3 18
4 16
54

Determine the average daily demand over this time period.

ANS: 2.36 hammers per day

PTS: 1 OBJ: Section 3.2

NARRBEGIN: Cell phone calls

The frequency of cell phone call per day on a certain account is tabulated in the
following table:

Calls per Day Number of Days

0-2 12
3-5 8
6-8 5
9-11 3
12-14 1
15-17 1

PTS: 1 OBJ: Section 3.5

39. Compute the sample standard deviation for the data above.

A monthly report to the Texas Department of Health, division of Water Hygiene,
contained the following water production data in thousands of gallons:
NARREND
49. Calculate the interquartile range.

ANS: 936.75

PTS: 1 OBJ: Section 3.3

COMPLETION

1. Measures of ____________________ are numbers that describe typical values in

ANS: central tendency

PTS: 1 OBJ: Section 3.2

5. The measure of dispersion which sums the absolute values of the differences
between the individual values and the mean, and then divides by the number of
individual values is known as the ____________________.

ANS: mean absolute deviation

PTS: 1 OBJ: Section 3.3

6. The ____________________, a variant of the range, is the average of the lowest

data value and the highest data value.

ANS: midrange

PTS: 1 OBJ: Section 3.3

7. ____________________ divide the values into 100 parts of equal size, each
comprising 1% of the observations.
ANS: Percentiles

PTS: 1 OBJ: Section 3.3

8. ____________________ divide the values into 10 parts of equal size, each

comprising 10% of the observations.

ANS: Deciles

PTS: 1 OBJ: Section 3.3

9. In order to specify the minimum percentage of observations that will fall

within a given number of standard deviations from the mean,
____________________ applies to any distribution, regardless of shape of the
distribution, while the ____________________ applies only to distributions that are
bell-shaped and symmetrical.

ANS: Chebyshev’s theorem; empirical rule

PTS: 1 OBJ: Section 3.4

10. The ____________________ is a graphical device that simultaneously displays

several of the measures of central tendency and dispersion.

ANS: box-and-whisker plot

PTS: 1 OBJ: Section 3.4

11. When approximating the mean or standard deviation from a frequency

distribution, each observation is considered to be located at the
____________________ of its class.

ANS: midpoint

PTS: 1 OBJ: Section 3.5

12. If the coefficient of correlation r is positive, the dependent variable y and the
independent variable x are said to be ____________________ related.

ANS: directly

PTS: 1 OBJ: Section 3.6

13. If the coefficient of correlation r is negative, the dependent variable y and
the independent variable x are said to be ____________________ related.

ANS: inversely

PTS: 1 OBJ: Section 3.6

SHORT ANSWER

1. Find the mean, median, mode, and range for these data values: 14, 12, 11,
11, 16, 18, 11, and 10.

Mean = ____________________

Median = ____________________

Mode = ____________________

Range = ____________________

ANS:
12.875; 11.5; 11; 8

PTS: 1 OBJ: Section 3.2

2. Compute the mean, median, and mode from these data: 1.2, 1.6, 2.1, 1.2,
1.8, 2.2, 1.2, 1.6, 1.8, and 2.0.

Mean = ____________________

Median = ____________________

Mode = ____________________

ANS:
1.67; 1.70; 1.2

PTS: 1 OBJ: Section 3.2

3. What are the relative magnitudes of the mean, median, and mode for a
unimodal distribution that is:

A) symmetrical?
Mean ____________________ median ____________________ mode.

B) negatively skewed?

Mean median mode.

C) positively skewed?

Mean median mode.

ANS:
=; =;
<, <;
>>

PTS: 1 OBJ: Section 3.2

NARRBEGIN: Texas Department

A monthly report to the Texas Department of Health, division of Water Hygiene,
contained the following water production data in thousands of gallons:
NARREND
4. What are the 1st, 2nd, and 3rd quartiles?

Q1 = ____________________

Q2 = ____________________

Q3 = ____________________

ANS:
4808.25; 5263.5; 5745.0

PTS: 1 OBJ: Section 3.3

5. What is the quartile deviation?

ANS:
(Q3 – Q1)/2 = 468.375

PTS: 1 OBJ: Section 3.3

6. Between 1980 and 1999, constant dollar spending on non-residential
construction in the United States (in billions of dollars) was as follows:

Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Spending 27.6 30.8 37.8 40.0 36.9 36.0 38.4 35.7 34.7 35.3

Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Spending 37.5 33.3 28.0 27.6 28.6 32.2 36.1 35.4 39.4 41.9

Find the quartiles of these data.

ANS:
31.15, 35.55, 37.725

PTS: 1 OBJ: Section 3.3

7. Consider the following data set:

Calculate the twenty-fifth, fiftieth, and seventy-fifth percentiles:

25th percentile = ____________________

50th percentile = ____________________

75th percentile = ____________________

ANS:
3.5; 12.5; 22.0

PTS: 1 OBJ: Section 3.3

8. Find the range and midrange from these data: 4, 8, 2, 16, 12, 10, 6, and 22.

Range = ____________________

Midrange = ____________________

ANS:
20; 12

PTS: 1 OBJ: Section 3.3

9. Construct a box-and-whisker plot for the following data sample:

219.724 220.426 221.187 217.831 221.883
220.028 219.470 220.654 219.237 220.777
219.325 219.707 220.004 221.600 221.020
219.660 219.447 218.332 220.653 218.243
ANS:

PTS: 1 OBJ: Section 3.4

10. A personnel director takes a random sample of the weekly wages of 25

ANS:
The asterisks represent outliers in the data.; the line represents the second
quartile (median).

PTS: 1 OBJ: Section 3.4

14. The first leadoff hitter, the first second baseman, and the smallest player to
hit a home run over the 94 foot tall, double decked roof at Tiger Stadium is
Detroit’s Lou Whitaker. He stands 5′ 11″ and weighs 160 pounds. Others who
have accomplished this same feat are:

Use Chebyshev’s Theorem to estimate how likely one so small (measured in

weight) could do it by finding the proportion of the data that lies outside the
number of standard deviations the weight 160 is from the mean weight of all the
players who have accomplished the feat.

ANS:
Standard deviation = 24.0675 and the mean = 200.43
k = -1.68
Proportion of observations that fall within 1.68 standard deviations of the mean
is at least [1-1/(1.682] = .64569
Therefore a proportion of 1 – .646 or .354 of the data lies on either extreme of
the distribution and the half on the left is .177.

PTS: 1 OBJ: Section 3.4

15. Using the grouped data set below, find the sample mean, variance, and
sample standard deviation:

= ____________________.

s2 = ____________________.

s = ____________________.

ANS:
0.55; 0.0499; 0.2233

PTS: 1 OBJ: Section 3.5

16. Use the frequency distribution below to determine the mean and standard
deviation of this sample.

= ____________________.

s = ____________________.

ANS:
2.47; 1.23

PTS: 1 OBJ: Section 3.5

17. Compute the sample mean and sample standard deviation from the
following set of grouped data:

= ____________________.

s = ____________________.

ANS:
1.625; 1.1252

PTS: 1 OBJ: Section 3.5

18. Using the grouped data below, determine the population mean and
population standard deviation:

= ____________________.

ANS:
31.85; 8.21

PTS: 1 OBJ: Section 3.5

NARRBEGIN: Variables
A sample of eight observations of variables x and y is shown below:
NARREND
19. Calculate the coefficient of correlation r and comment on the relationship
between x and y.

r = ____________________.

Comments:

ANS:
-0.991; There is a very strong, almost perfect, negative linear relationship
between x and y.

PTS: 1 OBJ: Section 3.6

20. Find the best-fit line:

= ____________________.

Estimate the value of y when x = 5.

ANS:
30.155-2.119x; 19.560

PTS: 1 OBJ: Section 3.6

21. Use Minitab or Excel to produce the scatter diagram that includes the best-fit
linear equation.
ANS:

PTS: 1 OBJ: Section 3.6

22. Data set A: 2, 4, 6, 8, and 10.

Data set B: 30, 24, 22, 26, and 28.

Which data set has the larger mean, A or B?

ANS:
Set B

PTS: 1 OBJ: Section 3.2

23. A company counted the number of all of their employees in each of the
following age classes. According to this distribution, what is the standard
deviation for the age of the employees in the company?

Age Range Number of Employees

20-24 8
25-29 37
30-34 25
35-39 48
40-44 27
45-49 10
ANS:
6.90 years old; This assumes the data is a population, rather than a sample.

PTS: 1 OBJ: Section 3.5

24. The average order size for a home shopping company follows a bell-shaped
and symmetrical distribution has a mean equal to $75 and a standard deviation
equal to $10. What range of sales order size would we expect to see 95 percent
of the time?

ANS:
95 percent of the orders should fall between $55 and $95.

PTS: 1 OBJ: Section 3.4

25. The speed of cars traveling down a particular road follows a distribution that
is not bell-shaped and symmetrical has a mean equal to 50 miles per hour (MPH)
and a standard deviation equal to 6 MPH. What is the minimum percent of cars
that would be expected to fall between 38 MPH and 62 MPH?

ANS:
Using Chebyshev’s Theorem, we would expect 75% of the cars to fall within
these limits.

PTS: 1 OBJ: Section 3.4

26. The following data represents the years of service for 10 employees at a
particular company:

8 11 6 2 11 6 5 6 10 15

Determine the quartiles.

ANS:
Q1 = 5.5, Q2 = 7, Q3 = 11

PTS: 1 OBJ: Section 3.3

27. Data set A: 14, 11, 15, 12, and 13.

Data set B: 13, 8, 20, 6, and 18.

Which data set has the larger standard deviation, A or B?

ANS:
Set B

PTS: 1 OBJ: Section 3.3

28. Find the range, median, mean, and variance for the following sample data:

Range = ____________________.

Median = ____________________.

= ____________________.
s2 = ____________________.

ANS:
20.93; 8.97; 11.22; 32.36

PTS: 1 OBJ: Section 3.7

29. A sample of 13 measurements has a mean of 28 and a standard deviation of

3.50. Suppose that the sample is enlarged to 15 measurements, by including
two additional measurements having common value of 28 each.
A) Find the mean of the sample of 15 measurements.
B) Find the standard deviation of the sample of 15 measurements.

ANS:
28; 3.24

PTS: 1 OBJ: Section 3.7

2. True or False
Statistics can be used as an inferential device for using sample findings to draw
conclusions about a population.

ANS: T PTS: 1 OBJ: Section 4.1

3. True or False
An economics student searches the Survey of Current Business for gross
domestic product data as a class report item. This is an example of using
primary data.

ANS: F PTS: 1 OBJ: Section 4.2

4. True or False
A recent graduate of mortuary school samples the death rate statistics for
counties in her state in hopes of finding a good location to start a mortuary. This
is an example of secondary data.

ANS: T PTS: 1 OBJ: Section 4.2

5. True or False
A manufacturer of semiconductors experiments with different designs and
records the data. This is an example of using primary data.

ANS: T PTS: 1 OBJ: Section 4.2

6. True or False
Consumers Union purchases twenty-five brands of lawnmowers and tests them
for various attributes. This is an example of secondary data.

ANS: F PTS: 1 OBJ: Section 4.2

7. True or False
Questionnaires should be pretested by personally administering them to a small
number of persons who are similar to the eventual sample members.

ANS: T PTS: 1 OBJ: Section 4.3

8. True or False
Causal research helps us become familiar with the problem situation, identify
important variables, and use other variables to form hypotheses that can be
tested in subsequent research.

ANS: F PTS: 1 OBJ: Section 4.2

9. True or False
Predictive research attempts to forecast some situation or value that will occur
in the future.

ANS: T PTS: 1 OBJ: Section 4.2

10. True or False

In causal research, the objective is to determine if one variable has an effect on
another.

ANS: T PTS: 1 OBJ: Section 4.2

11. True or False

Exploratory research can be of a qualitative nature.

ANS: T PTS: 1 OBJ: Section 4.2

12. True or False

Regarding causal studies, it should be pointed out that statistical techniques
alone can prove causality.

ANS: F PTS: 1 OBJ: Section 4.2

13. True or False

A sample consisting of firms or persons who have engaged in a specific behavior
or activity are said to be taken from a compiled list.
ANS: F PTS: 1 OBJ: Section 4.3

14. True or False

Response error can occur when an individual fails to return a questionnaire.

ANS: T PTS: 1 OBJ: Section 4.3

15. True or False

In general, multiple choice and dichotomous questions can be easy to formulate,
but data entry and analysis are relatively hard to accomplish.

ANS: F PTS: 1 OBJ: Section 4.3

16. True or False

External validity refers to whether the experimental treatment really made the
difference in the measurements obtained.

ANS: F PTS: 1 OBJ: Section 4.4

17. True or False

There are two key variables in an experiment: the independent variable (or
treatment) and the dependent variable (or measurement).

ANS: T PTS: 1 OBJ: Section 4.4

18. True or False

In evaluating experiments, two kinds of validity must be considered: internal and
external.

ANS: T PTS: 1 OBJ: Section 4.4

19. True or False

The persons or objects receiving a treatment in an experiment are said to be in
the control group.

ANS: F PTS: 1 OBJ: Section 4.4

20. True or False

Factor analysis is a set of techniques for studying interrelationships among
variables. This is done by reducing a very large set of variables to a smaller set
of new variables (factors) that are more basic in meaning but contain most of
the information in the original set.

ANS: T PTS: 1 OBJ: Section 4.5

21. True or False

In cluster analysis, the individuals or objects are categorized into different
groups where the members of each group tend to be different.

ANS: F PTS: 1 OBJ: Section 4.5

22. True or False

A statistic is a characteristic of a sample such as the sample mean or sample
standard deviation.

ANS: T PTS: 1 OBJ: Section 4.6

23. True or False

A census can be viewed as a “sample” that includes the entire population.

ANS: T PTS: 1 OBJ: Section 4.6

24. True or False

Bias is a type of error that can occur because a sample has been taken rather
than a census.

ANS: F PTS: 1 OBJ: Section 4.6

25. True or False

In practice, a sample can be more accurate than a census.

ANS: T PTS: 1 OBJ: Section 4.6

26. True or False

The convenience sample is an example of probability sampling where every
person or element in the population may not have an equal chance for inclusion
in the sample.

ANS: F PTS: 1 OBJ: Section 4.7

27. True or False
The quota sample is an example of nonprobability sampling that is similar to the
stratified probability sample, except that members of the various strata are not
chosen through the use of a probability sampling technique.

ANS: T PTS: 1 OBJ: Section 4.7

28. True or False

Business research studies can be categorized according to the objective
involved and may be exploratory, descriptive, causal, or predictive.

ANS: T PTS: 1 OBJ: Section 4.8

29. True or False

Secondary data tends to require more time and expense, but have the
advantage of being more applicable to the research problem or situation.

ANS: F PTS: 1 OBJ: Section 4.8

30. True or False

Nonsampling errors can be reduced by increasing the size of a sample.

ANS: F PTS: 1 OBJ: Section 4.6

31. True or False

In practice, most studies involve relatively large populations for which taking a
sample can provide satisfactory results much more quickly and at considerably
lower cost than a census.

ANS: T PTS: 1 OBJ: Section 4.8

32. True or False

Sampling error is a random, nondirectional error that is inevitable whenever a
sample is taken instead of a census.

ANS: T PTS: 1 OBJ: Section 4.8

33. True or False

In the simple random sample, each person or element has the same chance of
being included in the sample.
ANS: T PTS: 1 OBJ: Section 4.8

MULTIPLE CHOICE

1. Which of the following statements describe secondary external data?

a. A manufacturer of semiconductors experiments with different designs and
records the data.
b. A mail order company conducts a telephone survey among recent purchasers.
c. A presidential candidate commissions a political survey organization to
establish the percent of persons favoring her candidacy.
d. A recent graduate of mortuary school samples the death rate statistics for
counties in her state in hopes of finding a good location to start a mortuary.
e. Consumers Union purchases 25 brands of lawnmowers and tests them for
various attributes.
ANS: D PTS: 1 OBJ: Section 4.2

2. Which of the following statements describe secondary internal data?

a. A manufacturer of semiconductors uses available company sales and
inventory valuation records to prepare an inventory turnover ratio for each
month.
b. A mail order company conducts a telephone survey among recent purchasers.
c. A presidential candidate commissions a political survey organization to
establish the percent of persons favoring her candidacy.
d. A recent graduate of mortuary school samples the death rate statistics for
counties in her state in hopes of finding a good location to start a mortuary.
e. Consumers Union purchases 25 brands of lawnmowers and tests them for
various attributes.
ANS: A PTS: 1 OBJ: Section 4.2

3. Which of the following is not an example of primary data?

a. Data published by the United States Bureau of Census.
b. Data published by Statistics Canada.
c. Data published by the New York Stock Exchange.
d. Financial data tapes that contain data compiled from the New York Stock
Exchange.
ANS: D PTS: 1 OBJ: Section 4.2

4. When a respondent indicates that he is 25 years old when he is actually 35

years old, he is contributing to:
a. sampling error.
b. response error.
c. nonresponse error.
d. bias.
e. nonsampling error.
ANS: B PTS: 1 OBJ: Section 4.3

5. The difference between a sample mean and the corresponding population

mean is called a:
a. nonresponse error
b. systematic error
c. sampling error
d. response error
e. bias
ANS: C PTS: 1 OBJ: Section 4.3

6. Which of the following questionnaire designs requires the respondent to pick

from only two choices?
a. dichotomous questions
b. multiple choice questions
c. open-ended questions
d. demographic questions
ANS: A PTS: 1 OBJ: Section 4.3

7. When a person receives a mail questionnaire and places it in the wastebasket,

they are contributing to:
a. sampling error
b. response error
c. nonresponse error
d. nonsystematic error
e. nonsampling error
ANS: C PTS: 1 OBJ: Section 4.3

8. To overcome one of the shortcomings of telephone surveys due to unlisted

telephone numbers:
a. survey takers purchase mail lists of unlisted telephone number subscribers.
b. survey takers employ random digit dialing facilities.
c. survey takers contact telephone companies for a list of unlisted telephone
numbers.
d. survey takers purchase lists of unlisted telephone numbers from magazine
subscribers.
e. survey takers go door to door and identify the unlisted telephone subscribers.
ANS: B PTS: 1 OBJ: Section 4.3

9. Which of the following questionnaire designs allow the respondent to freely

formulate his or her own answer and expand on the subject of the question?
a. Multiple choice
b. Dichotomous
c. Open-ended
d. All of the above
ANS: C PTS: 1 OBJ: Section 4.3

10. Which of the following must be avoided in designing a questionnaire?

a. Dichotomous questions
b. Leading questions
c. Open-ended questions
d. Demographic questions
ANS: B PTS: 1 OBJ: Section 4.3

11. Which of the following variables probably could be measured in an

observational study of airline travelers?
a. The brand of coffee they drink at home.
b. The occupation of the traveler.
c. How many frequent traveler miles they have earned.
d. The gender of the traveler.
e. The total number of bags taken on the airplane trip (carry-on and checked).
ANS: D PTS: 1 OBJ: Section 4.4

12. Which of the following statements is not true?

a. Extraneous variables refer to outside variables that are not part of the
experiment.
b. Persons or objects receiving a treatment are said to be in an experimental
group.
c. Persons or objects not exposed to a treatment are said to be in a control
group.
d. Internal validity refers to whether the treatment really made the difference in
the measurements obtained.
e. All of these are true.
ANS: E PTS: 1 OBJ: Section 4.4

13. Which of the following statements is not correct?

a. Internal secondary data are those that have been generated by your own firm
or organization.
b. External secondary data are those that have been generated by someone
outside the firm or organization, often for another purpose.
c. Internal secondary data have traditionally existed in the form of accounting or
financial information.
d. All of these statements are correct.
e. None of these statements is correct.
ANS: D PTS: 1 OBJ: Section 4.5

14. A characteristic of a sample, such as the sample mean or sample standard

deviation, is known as a(n):
a. population
b. census
c. parameter
d. observation
e. statistic
ANS: E PTS: 1 OBJ: Section 4.6
15. A sample is:
a. the entire set of elements being observed or measured.
b. a selected portion of elements from the universe.
c. the measurement/observation of the population.
d. that portion of the population that can be theoretically considered.
e. a measurement of the universe.
ANS: B PTS: 1 OBJ: Section 4.6

16. A census is:

a. a complete enumeration of the population.
b. a survey of the entire population.
c. the measurement of a sample.
d. answers A and B are both correct.
e. answers A and C are both correct.
ANS: D PTS: 1 OBJ: Section 4.6

17. Which of the following is a correct statement?

a. A parameter is a characteristic of the universe.
b. A census is a measurement of a sample.
c. A statistic describes a variable for the population.
d. A census is always a better measurement than is a sample.
e. A parameter is a characteristic of the sample.
ANS: A PTS: 1 OBJ: Section 4.6

18. When the sample mean differs from the population mean simply be chance,
the error that results is known as:
a. sampling error.
b. response error.
c. nonresponse error.
d. bias.
e. nonsystematic error.
ANS: A PTS: 1 OBJ: Section 4.6

19. Which of the following represents an advantage of taking a sample?

a. Less expense than a census.
b. Can be completed in a timely fashion.
c. Testing or measuring is a destructive process.
d. The size of the population is very large.
e. Each of these is an advantage of taking a sample rather than a census.
ANS: E PTS: 1 OBJ: Section 4.6

20. When is a sample a better choice than a census?

a. When the population is changing over time.
b. When taking the U.S. Census of the population.
c. When some sampling error can be tolerated.
d. When time is an important factor.
e. Each of these is a reason for taking a sample rather than a census.
ANS: E PTS: 1 OBJ: Section 4.6

21. Which type of sampling would primarily be used in exploratory research

studies where there is no intention of making statistical inferences from the
sample to the population?
a. probability sampling
b. nonprobability sampling
c. simple random sampling
d. cluster sampling
e. stratified sampling
ANS: B PTS: 1 OBJ: Section 4.7

22. Which of the following is an example of nonsampling errors?

a. Errors that arise from the recording of incorrect responses
b. Errors that arise when responses are not obtained from some members of the
sample
c. Errors that arise when some members of the target population cannot
possibly be selected in the sample
d. All of these.
ANS: D PTS: 1 OBJ: Section 4.6

23. If the population for a study is defined as the student body in a particular
high school, and the sample is selected by randomly choosing classrooms at
11:00 AM and administering the survey to all the students in those classes, we
are relying on:
a. simple random sampling.
b. nonprobability sampling.
c. cluster sampling.
d. stratified sampling.
e. convenience sampling.
ANS: C PTS: 1 OBJ: Section 4.7

24. Which of the following is a nonprobability sample?

a. Simple random sample
b. Systematic sample
c. Judgment sample
d. Stratified sample
e. Cluster sample
ANS: C PTS: 1 OBJ: Section 4.7

25. One weakness of a systematic sample is that:

a. it is difficult to separate the population into strata.
b. geographic areas may not be known.
c. taking the sample requires judgment on the part of the researcher.
d. the data may exhibit a pattern of periodicity.
e. the observations are chosen because they are not typical of the population.
ANS: D PTS: 1 OBJ: Section 4.7

26. Which of the following is a major weakness of a nonprobability sample?

a. Not every element has a known chance of being included in the sample.
b. It is convenient for the sample taker.
c. It allows the selection of members, which are not typical.
d. It is used in small exploratory studies.
e. It is cost efficient.
ANS: A PTS: 1 OBJ: Section 4.7

27. At the annual freshman mixer at your university, each student places a card
with his/her name in a large basket. A card is drawn for the evening’s door prize.
This is an example of:
a. a nonprobability sample.
b. a probability sample.
c. a simple random sample.
d. both A and C are correct.
e. both B and C are correct.
ANS: E PTS: 1 OBJ: Section 4.7

28. In order to obtain a sample of persons owning a telephone, you select every
24th name in the local phone book. This is an example of:
a. simple random sampling
b. systematic sampling
c. stratified sampling
d. probability sampling
e. both B and D are correct
ANS: E PTS: 1 OBJ: Section 4.7

29. When the population is divided into mutually exclusive sets, and then a
simple random sample is drawn from each set, this is called:
a. simple random sampling.
b. stratified sampling.
c. cluster sampling.
d. systematic sampling.
e. quota sampling.
ANS: B PTS: 1 OBJ: Section 4.7

30. When all the items in a population have some (nonzero) known or calculable
chance of being selected in the sample, this is called:
a. probability sampling.
b. nonprobability sampling.
c. purposive sampling.
d. convenience sampling.
e. judgment sampling.
ANS: A PTS: 1 OBJ: Section 4.7
31. Which of the following sampling plans use random methods of selections?
a. Simple random sampling
b. Stratified sampling
c. Cluster sampling
d. Systematic Sampling
e. All of these
ANS: E PTS: 1 OBJ: Section 4.7

32. A pharmaceutical company interested in measuring how often physicians

prescribe a certain drug has selected a simple random sample from each of two
groups: M.D. (medical doctors) and D.O (osteopathic doctors). What is this type
of sampling called?
a. Simple random sampling
b. Cluster sampling
c. Stratified sampling
d. Purposive sampling
e. Quota sampling
ANS: C PTS: 1 OBJ: Section 4.7

33. When every possible sample of size n has the same chance of being
selected, this is called:
a. simple random sampling.
b. stratified sampling.
c. cluster sampling.
d. convenience sampling.
e. quota sampling.
ANS: A PTS: 1 OBJ: Section 4.7

34. Which of the following does not characterize stratified sampling?

a. The population is divided into strata that are distinct.
b. The population is divided into strata that are mutually exclusive and
exhaustive.
c. The population is divided into strata that are homogenous.
d. The population is divided into strata that are heterogenous.
ANS: D PTS: 1 OBJ: Section 4.7
35. Which of the following statements is not true?
a. For probability samples, sampling error can be reduced by decreasing the
sample size.
b. Nonsampling error is a tendency toward error in one direction or the other
and can be present even if a complete census is taken.
c. In probability sampling, each element in the population has some (nonzero)
known or calculable chance of being included in the sample.
d. In nonprobability sampling, not everyone in the population has a chance of
being included in the sample.
e. Nonprobability techniques discussed in the text include convenience, quota,
purposive, and judgment sampling.
ANS: A PTS: 1 OBJ: Section 4.8

36. The nonprobability sampling technique where members are chosen

specifically because they are not typical of the population is known as:
a. judgment sampling.
b. quota sampling.
c. convenience sampling.
d. purposive sampling.
e. cluster sampling.
ANS: D PTS: 1 OBJ: Section 4.7

COMPLETION

1. ____________________ helps us become familiar with the problem situation,

identify important variables, and use these variables to form hypotheses that
can be tested in subsequent research.

ANS: Exploratory research

PTS: 1 OBJ: Section 4.2

2. The ____________________ is a method in which a moderator leads a small-

group discussion about a topic and the client watches and listens from behind a
one-way mirror.

ANS: focus group interview

PTS: 1 OBJ: Section 4.2

3. A(n) ____________________ questionnaire leaves respondents free to formulate

their own answers and expand on the subject of the questionnaire.

ANS: open-ended

PTS: 1 OBJ: Section 4.3

4. A(n) ____________________ questionnaire offers respondents only two

alternatives.

ANS: dichotomous

PTS: 1 OBJ: Section 4.3

5. While taking a census is more expensive than taking a sample, taking a

census might help eliminate the problem of ____________________ error.

ANS: sampling

PTS: 1 OBJ: Section 4.3

6. When the respondents to a questionnaire have different characteristics from

those who did not choose to participate in the survey, the survey will likely
suffer from ____________________.

ANS: nonresponse error

PTS: 1 OBJ: Section 4.3

7. ____________________ validity asks whether the results of an experiment can be

generalized to other people or settings.

ANS: External

PTS: 1 OBJ: Section 4.4

8. In experiments, the purpose is to identify ____________________ and

____________________ relationships between variables.

ANS: cause; effect

PTS: 1 OBJ: Section 4.4

9. The ______________________________ technique identifies the variables that best

separate members of two or more groups. It can also be used to predict group
membership on the basis of variables that have been measured or observed.

ANS: discriminant analysis

PTS: 1 OBJ: Section 4.5

10. Fill in the blank: Data that are collected by someone other than the
researcher, for purposes other than the problem or decision at hand, are
referred to as _________________________.

ANS: secondary data

PTS: 1 OBJ: Section 4.5

11. A non-sampling error is also referred to as ____________________, because it is

a directional error.

ANS: bias

PTS: 1 OBJ: Section 4.6

12. A ____________________ is a characteristic of a sample, while a

____________________ is a characteristic of a population.

ANS: statistic; parameter

PTS: 1 OBJ: Section 4.6

13. In a(n) ____________________ sample, the population is divided into layers;

then a simple random sample of members from each layer is selected.

ANS: stratified

PTS: 1 OBJ: Section 4.7

14. In a(n) ____________________ sample, we randomly select a starting point

between 1 and k, then sample every kth element from the population.
ANS: systematic

PTS: 1 OBJ: Section 4.7

15. Sampling methods can be categorized as ____________________ or

____________________ sampling.

ANS: probability; nonprobability

PTS: 1 OBJ: Section 4.7

16. The ____________________ sample involves dividing the population into groups,
then randomly selecting some of the groups and taking either a sample or a
census of their members.

ANS: cluster

PTS: 1 OBJ: Section 4.7

17. ____________________ data are generated by the researcher for the problem or
situation at hand, while ____________________ data have been collected by
someone else for some other purpose.

ANS: Primary; secondary

PTS: 1 OBJ: Section 4.8

18. Secondary data can be classified as ____________________ or

____________________, depending on whether the data have been generated from
within or outside the researcher’s firm or organization.

ANS: internal; external

PTS: 1 OBJ: Section 4.8

SHORT ANSWER

ESSAY

1. What is survey research?

ANS:
A type of research in which we communicate with a sample of individuals in
order to generalize on the characteristics of the population from which they
were drawn.

PTS: 1 OBJ: Section 4.3

2. Comment on the appropriateness of the question, “Have you ever broken the
law and endangered the lives of others by speeding and tailgating?
ANS:
This question is biased and will most likely lead to many false negative answers.

PTS: 1 OBJ: Section 4.3

3. What is data warehouse?

ANS:
Data warehouse is a large collection of data from inside and outside the
company, put together for the express purpose of using sophisticated analytical
techniques to uncover patterns and discover interrelationships within the data.

PTS: 1 OBJ: Section 4.5

4. What is data mining?

ANS:
Data mining is a procedure by which sophisticated analytical techniques are
applied to uncover patterns and discover interrelationships within the data.

ANS:
With probability sampling, each person or element in the population has a
known (or calculable) chance of being included in the sample.

PTS: 1 OBJ: Section 4.7

11. A politician wants to estimate the mean age of registered voters in her
district. Unfortunately, she does not have a complete list of households.
Describe a sampling plan that would be suitable for her purposes.

ANS:
The politician may use cluster sampling by letting each county in the district
represents a cluster.

PTS: 1 OBJ: Section 4.7

12. The dean of a college of arts and sciences with six departments wants to
estimate the student-hours lost per month due to illness of professors. Describe
a sampling plan that would be suitable for estimating the college-wide loss and
for comparing departments.

ANS:
The dean can select stratified random samples where the strata are the six
departments. Simple random sampling can be conducted in each department.

PTS: 1 OBJ: Section 4.7

13. What are the three major sources of error in survey research?

ANS:
Sampling error, response error, and nonresponse error

PTS: 1 OBJ: Section 4.3

ANS: T PTS: 1 OBJ: Section 5.2

8. True or False
The union of events describes two or more events occurring at the same time.

ANS: F PTS: 1 OBJ: Section 5.3

9. True or False
When the events within a set are both mutually exclusive and exhaustive, the
sum of their probabilities is 1.0.

ANS: T PTS: 1 OBJ: Section 5.3

10. True or False

When events are mutually exclusive, two or more of them can happen at the
same time.

ANS: F PTS: 1 OBJ: Section 5.4

11. True or False

If P(A) = 0.5 and P(B) = 0.80, then P(A or B) must be 0.95.

ANS: F PTS: 1 OBJ: Section 5.4

12. True or False

When events A and B are independent, then P(A and B) = P(A) + P(B).

ANS: F PTS: 1 OBJ: Section 5.5

13. True or False

Bayes’ theorem is an extension of the concept of conditional probability.
ANS: T PTS: 1 OBJ: Section 5.6

14. True or False

Prior probability is a marginal probability while posterior probability is a
conditional probability.

ANS: T PTS: 1 OBJ: Section 5.6

MULTIPLE CHOICE

1. If the event of interest is A, then:

a. the probability that A will not occur is [1 – P(A)].
b. the probability that A will not occur is the complement of A.
c. the probability is zero if event A is impossible.
d. the probability is one if event A is certain.
e. All of these are true.
ANS: E PTS: 1 OBJ: Section 5.2

2. The classical approach describes a probability:

a. in terms of the proportion of times an event is observed to occur in a very
large number of trials.
b. in terms of the degree to which one happens to believe that an event will
happen.
c. in terms of the proportion of times that an event can be theoretically
expected to occur.
d. is dependent on the law of large numbers.
e. describes an event for which all outcomes are equally likely.
ANS: C PTS: 1 OBJ: Section 5.2

3. An example of the classical approach to probability would be:

a. the estimate of number of defective parts based on previous production data.
b. your estimate of the probability of a pop quiz in class on a given day.
c. the annual estimate of the number of deaths of persons age 25.
d. the probability of drawing an Ace from a deck of cards.
ANS: D PTS: 1 OBJ: Section 5.2
4. If a set of events includes all the possible outcomes of an experiment, these
events are considered to be:
a. mutually exclusive.
b. exhaustive.
c. intersecting.
d. inclusive.
e. None of the above.
ANS: B PTS: 1 OBJ: Section 5.3

5. A student is randomly selected from a class. Event A = the student is a male

and Event B = the student is a female. Events A and B are:
a. mutually exclusive.
b. exhaustive.
c. intersecting.
d. dependent.
e. both A and B.
ANS: E PTS: 1 OBJ: Section 5.3

6. Which of the following is not an approach to assigning probabilities?

a. The Classical approach
b. The Trial and error approach
c. The Relative frequency approach
d. The Subjective approach
e. All of the above are approaches to assigning probabilities.
ANS: B PTS: 1 OBJ: Section 5.2

7. If Events A and B are not mutually exclusive, then the probability that one of
the events will occur is represented by
a. P(A or B) = P(A) + P(B) – P(A and B)
b. P(A or B) = P(A) + P(B)
c. P(A and B) = P(A) + P(B) – P(A or B)
d. P(A and B) = P(A) + P(B)
e. P(A or B) = P(A) + P(B) + P(A and B)
ANS: A PTS: 1 OBJ: Section 5.3
8. Which of the following statements is not correct?
a. Two events A and B are mutually exclusive if event A occurs and event B
cannot occur.
b. If events A and B occur at the same time, then A and B intersect.
c. If event A does not occur, then its complement A’ will also not occur.
d. A union of events occurs when at least one event in a group occurs, e.g., (A or
B or C).
e. If all possible outcomes of an experiment are represented in a set, the set is
considered exhaustive.
ANS: C PTS: 1 OBJ: Section 5.3

9. If a contingency table shows the sex and classification of undergraduate

students (freshman, sophomore, junior, senior) in your statistics class, which of
the following is true?
a. The sex of the student is an example of mutually exclusive events.
b. Because yours is an undergraduate class, the events are exhaustive, i.e.,
each student must fall in one of the classifications.
c. An example for the intersection of events would be the number of males who
are juniors.
d. An example for the union of events would be the number of students who are
female or juniors.
e. All of these are true.
ANS: E PTS: 1 OBJ: Section 5.3

10. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.

Which of the following represents two mutually exclusive events?

a. (A and D).
b. (A and E).
c. (A and F).
d. (A and G).
e. All of these are mutually exclusive.
ANS: A PTS: 1 OBJ: Section 5.3
11. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.

Which two of the following pairs of events intersect?

a. A and D
b. A and E
c. F and E
d. B and C
e. D and B
ANS: B PTS: 1 OBJ: Section 5.3

12. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.

What is the probability that a randomly selected person would be a Protestant

and at the same time be a Democrat or a Republican?
a. 0.67
b. 0.35
c. 0.95
d. 0.89
e. 0.62
ANS: E PTS: 1 OBJ: Section 5.3

13. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.

What is the probability that a randomly selected person would be an

independent whose religion was neither Protestant nor Catholic?
a. 0.05
b. 0.03
c. 0.02
d. 0.01
ANS: B PTS: 1 OBJ: Section 5.3

14. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.
What is the probability that a randomly selected person would be a Democrat
who was not Jewish?
a. 0.93
b. 0.50
c. 0.47
d. 0.07
e. None of these
ANS: C PTS: 1 OBJ: Section 5.3

15. The table below gives the probabilities of combinations of religion and
political parties in a major U.S. city.

What is the probability that a randomly selected person would be a Republican?

a. 0.67
b. 0.22
c. 0.11
d. 0.39
e. None of these
ANS: D PTS: 1 OBJ: Section 5.3

16. Two events A and B are said to be mutually exclusive if:

a. P (A /B) = 1.
b. P (B /A) =1.
c. P (A and B) =1.
d. P (A and B) = 0.
ANS: D PTS: 1 OBJ: Section 5.4

17. If P(A) = 0.84, P(B) = 0.76 and P(A or B) = 0.90, then P(A and B) is:
a. 0.06.
b. 0.14.
c. 0.70.
d. 0.83.
ANS: C PTS: 1 OBJ: Section 5.4

18. If P(A) = 0.25 and P(B) = 0.60, then P(A and B) is:
a. 0.15.
b. 0.35.
c. 0.85.
d. Cannot be determined from the information given.
ANS: D PTS: 1 OBJ: Section 5.4

NARRBEGIN: Basketball Team

A basketball team at a university is composed of ten players. The team is made
up of players who play either guard, forward, or center position. Four of the ten
are guards; four of the ten are forwards; and two of the ten are centers. The
numbers of the players are 1, 2, 3, 4, for the guards; 5, 6, 7, 8 for the forwards;
and 9 and 10 for the centers. The starting five are numbered 1, 3, 5, 7, and 9.
Let a player be selected at random from the ten. Define the following events:

A = player selected has a number from 1 to 8.

B = player selected is a guard.

C = player selected is a forward.

D = player selected is a starter.

E = player selected is a center.

NARREND
19. P(A) is equal to:
a. 0.80.
b. 0.40.
c. 0.50.
d. 0.20.
e. 0.60.
ANS: A PTS: 1 OBJ: Section 5.5

20. P(B) is equal to:

a. 0.80.
b. 0.40.
c. 0.50.
d. 0.20.
e. 0.30.
ANS: B PTS: 1 OBJ: Section 5.5

21. P(D and E) is equal to:

a. 0.10.
b. 0.05.
c. 0.50.
d. 0.20.
e. 0.60.
ANS: A PTS: 1 OBJ: Section 5.5

22. P(B and D) is equal to:

a. 0.80.
b. 0.40.
c. 0.50.
d. 0.20.
e. 0.30.
ANS: D PTS: 1 OBJ: Section 5.5

23. P(B /D) is equal to:

a. 0.80.
b. 0.40.
c. 0.50.
d. 0.20.
e. 0.60.
ANS: B PTS: 1 OBJ: Section 5.5

24. P(E /D) is equal to:

a. 0.80.
b. 0.40.
c. 0.50.
d. 0.20.
e. 0.10.
ANS: D PTS: 1 OBJ: Section 5.5
25. A useful graphical method of constructing the sample space for an
experiment is:
a. tree diagram.
b. pie chart.
c. histogram.
d. bar graph.
e. scatter plot
ANS: A PTS: 1 OBJ: Section 5.5

26. Assume that A and B are independent events with P(A) = 0.40 and P(B) =
0.30. The probability that both events will occur simultaneously is:
a. 0.10.
b. 0.12.
c. 0.70.
d. 0.75.
e. 1.0.
ANS: B PTS: 1 OBJ: Section 5.5

27. Two events A and B are said to be independent if:

a. P(A and B) = P(A) • P(B).
b. P(A and B) = P(A) + P(B).
c. P(A/B) = P(B).
d. P(B/A) = P(A).
e. P(A or B) = P(A) • P(B).
ANS: A PTS: 1 OBJ: Section 5.5

28. If A and B are independent events with P(A) = 0.25 and P(B) = 0.60, then
P(A/B) is:
a. 0.25.
b. 0.60.
c. 0.35.
d. 0.85.
e. 0.15
ANS: A PTS: 1 OBJ: Section 5.5
29. If the probability of drawing an Ace from a deck of cards is 0.077 and the
probability of rolling a “2” using a fair die is 0.167, then the probability of
drawing an Ace and rolling a “2” is
a. 0.244
b. 0.090
c. 0.454
d. 0.013
e. 0.333
ANS: D PTS: 1 OBJ: Section 5.5

30. The joint probability of Events A and B is described as:

a. The probability of Event A, given that Event B has occurred.
b. The probability of Event B, given that Event A has occurred.
c. The probability that either Event A or Event B has occurred.
d. The probability that both Event A and Event B has occurred.
ANS: D PTS: 1 OBJ: Section 5.3

31. A survey revealed that 21.5% of the households had no checking account,
66.9% had regular checking accounts, and 11.6% had NOW accounts. Of those
households with no checking account 40% had savings accounts. Of the
households with regular checking accounts 71.6% had a savings account. Of the
households with NOW accounts 79.3% had savings accounts.
The probability that a randomly selected household has a savings account is:
a. 0.609.
b. 1.000.
c. 0.227.
d. 0.657.
e. 0.537.
ANS: D PTS: 1 OBJ: Section 5.8

32. A survey revealed that 21.5% of the households had no checking account,
66.9% had regular checking accounts, and 11.6% had NOW accounts. Of those
households with no checking account 40% had savings accounts. Of the
households with regular checking accounts 71.6% had a savings account. Of the
households with NOW accounts 79.3% had savings accounts.
The probability that a randomly selected household has no checking account
and no savings account is:
a. 0.0860.
b. 0.1290.
c. 0.5330.
d. 0.1309.
e. 0.3430.
ANS: B PTS: 1 OBJ: Section 5.8

33. A survey revealed that 21.5% of the households had no checking account,
66.9% had regular checking accounts, and 11.6% had NOW accounts. Of those
households with no checking account 40% had savings accounts. Of the
households with regular checking accounts 71.6% had a savings account. Of the
households with NOW accounts 79.3% had savings accounts.
The probability that a randomly selected household with a savings account has
no checking account is:
a. 0.1309.
b. 0.1290.
c. 0.1437.
d. 0.2150.
e. 0.4000.
ANS: A PTS: 1 OBJ: Section 5.8

34. Which of the following statements is correct given that the events A and B
have nonzero probabilities?
a. A and B cannot be both independent and mutually exclusive
b. A and B can be both independent and mutually exclusive
c. A and B are always independent
d. A and B are always mutually exclusive
ANS: A PTS: 1 OBJ: Section 5.8

NUMERIC RESPONSE

1. The odds of the Dallas Cowboys winning this year’s Super Bowl are 3 to 1.
Compute the probability of the Cowboys winning.
ANS: 0.75

6. Let X be the number of service calls during the warranty period for a
dishwasher. What is the probability that there will be between two and four
(inclusive) service calls?

ANS: 0.128

PTS: 1 OBJ: Section 5.2

11. Determine the probability of event B.

ANS: 0.277

PTS: 1 OBJ: Section 5.2

12. Determine the probability of event C.

ANS: 0.425

PTS: 1 OBJ: Section 5.2

NARRBEGIN: Odds
The odds in favor of an event are the number of successes divided by the
number of failures. The probability of this event occurring is the number of
successes divided by the sum of the number of successes and the number of
failures. The number of successes is five and the number of failures is four.
NARREND
13. Find the probability of failure.

ANS: 0.4444

PTS: 1 OBJ: Section 5.2

NARRBEGIN: Shoe store

A shoe store carries 590 pairs of Stacy-Adams and 610 pairs of Freeman brands
of shoes. Let a success be the event of randomly selecting a pair of Stacy-
Adams shoes.
NARREND
14. Find the probability of a success.

ANS: 0.4917
PTS: 1 OBJ: Section 5.2

15. In the board game called TRIVIAL PURSUIT, a single die is used to determine
the number of spaces a player is allowed to move. A player is currently
positioned 3 spaces from a space where a correct answer will earn a “pie” and 4
spaces from a space where “roll again” is the option. Assuming a fair die, what is
the probability the player will get to answer a question for a “pie” or get to “roll
again”?

ANS: 0.333

PTS: 1 OBJ: Section 5.3

NARRBEGIN: Event

NARREND
16. Find P (C1 and D1).

ANS: 0.075

PTS: 1 OBJ: Section 5.4

17. Find P (D1) or P (C1).

ANS: 0.60

PTS: 1 OBJ: Section 5.4

18. Find P (C1 or D1).

ANS: 0.525

PTS: 1 OBJ: Section 5.4

19. Find P (D1 or D2 or D3).

ANS: 1.00

PTS: 1 OBJ: Section 5.4

NARRBEGIN: Candidate
Six candidates for a new position of vice-president for academic affairs have
been selected. Three of the candidates are female. The candidates’ years of
experience are as follows:

Suppose one of the candidates is selected at random. Define the following

events:

A = person selected has 9 years experience.

B = person selected is a female.

NARREND
20. Find P(A).

ANS: 0.167

PTS: 1 OBJ: Section 5.5

21. Find P(B).

ANS: 0.500

PTS: 1 OBJ: Section 5.5

22. Find P(A / B).

ANS: 0.333

PTS: 1 OBJ: Section 5.5

23. Find P(not A / B).

ANS: 0.667

PTS: 1 OBJ: Section 5.5

NARRBEGIN: Manufacturers
A large men’s store in a mall purchases suits from four different manufacturers
in short, regular, and long. Their current selections are given in the contingency
table below:

32. What is the probability that a randomly selected respondent was a Democrat
or not in favor of the proposed law?

ANS: 0.617

PTS: 1 OBJ: Section 5.5

33. Given that the respondent was in favor of the proposed law, what is the
probability that they were a Republican?

ANS: 0.554

PTS: 1 OBJ: Section 5.5

NARRBEGIN: Gulf Coast

A Gulf Coast travel park has the following accommodations:

Number of Bedrooms
Location 3 Bedroom 4 Bedroom Total
Beach Front 17 24 41
Non Beach Front 6 210 216
Total 23 234 257

NARREND
34. What is the probability of selecting a beachfront site?

ANS: 0.1595

PTS: 1 OBJ: Section 5.5

35. What is the probability of selecting a non beach front site with 3 bedrooms?

ANS: 0.023

PTS: 1 OBJ: Section 5.5

36. What is the probability of selecting a non beach front site given that the
facility had 4 bedrooms?

ANS: 0.897

PTS: 1 OBJ: Section 5.5

NARRBEGIN: Gender
The physical science degrees conferred by a school between 1992 and 1995
were broken down as follows:

Suppose a person is selected at random from these graduates. Consider the

following events:

M: The person is a male.

F: The person is a female.

P: The person graduated in physics.

C: The person graduated in chemistry.

G: The person graduated in geology.

NARREND
37. Find P(M).
ANS: 0.575

PTS: 1 OBJ: Section 5.5

38. Find P(M / P).

ANS: 0.500

PTS: 1 OBJ: Section 5.5

39. Find P(M and P).

ANS: 0.4375

PTS: 1 OBJ: Section 5.6

NARRBEGIN: Event 1
The prior probabilities of events A1, A2, and A3 are P(A1) = .50, P(A2) = .20 and
P(A3) = .30. The conditional probabilities of event B given A1, A2, and A3 are
P(B / A1) = .40, P(B / A2) = .50 and P(B / A3) = .30.
NARREND
48. Compute P(B and A1).
ANS: 0.20

PTS: 1 OBJ: Section 5.6

49. Compute P(B and A2).

ANS: 0.10

PTS: 1 OBJ: Section 5.6

50. Compute P(B and A3).

64. Using the letter identifications, calculate P (A or F).

ANS: 0.25

PTS: 1 OBJ: Section 5.8

65. Using the letter identifications, calculate P (B and D).

ANS: 0.00

PTS: 1 OBJ: Section 5.8

NARRBEGIN: Burger Queen Co.

The Burger Queen Company has 124 locations along the west coast. The general
manager is concerned with the profitability of the locations compared with major
menu items sold. The information below shows the number of each menu item
selected by profitability of store.
NARREND
66. If a menu item is selected at random, what is the probability that the store is
a high profit store?

ANS: 0.414

PTS: 1 OBJ: Section 5.8

67. What is the probability that an item selected at random is a Mother burger?

ANS: 0.218

PTS: 1 OBJ: Section 5.8

68. What is the probability of selecting a menu item from a high profit store and
it is nachos?

ANS: 0.174

PTS: 1 OBJ: Section 5.8

69. What is the probability of tacos being selected at a low profit store?

ANS: 0.197

PTS: 1 OBJ: Section 5.8

NARRBEGIN: Plan to buy

Intentions of consumers regarding future automobile purchases and the financial
capability of the consumers are given below:

NARREND
70. For a randomly selected consumer, find the following probability: P(D).

ANS: 0.6

2. Because we can determine the probability without actually engaging in any

experiments, the classical approach is also referred to as the
____________________ approach.

ANS: a priori

PTS: 1 OBJ: Section 5.2

3. The relative frequency approach to probability depends on the law of

______________________________.

ANS: large numbers

PTS: 1 OBJ: Section 5.2

ANS: relative frequency

PTS: 1 OBJ: Section 5.2

9. An event A and its complement A’ are always

___________________________________.

ANS: mutually exclusive

ANS: dependent

PTS: 1 OBJ: Section 5.5

NARRBEGIN: Gender
The physical science degrees conferred by a school between 1992 and 1995
were broken down as follows:

Suppose a person is selected at random from these graduates. Consider the

following events:

M: The person is a male.

F: The person is a female.

P: The person graduated in physics.

C: The person graduated in chemistry.

G: The person graduated in geology.

NARREND
16. Complete the formula: P(M / P) = P(P and M) / ____________________.

ANS: P(P)

PTS: 1 OBJ: Section 5.5

17. ____________________ refer to the number of different ways in which objects

can be arranged in order.

ANS: Permutations
PTS: 1 OBJ: Section 5.7

18. ____________________ consider only the possible sets of objects, regardless of

the order in which the members of the set are arranged.

ANS: Combinations

PTS: 1 OBJ: Section 5.7

The odds are to .

PTS: 1 OBJ: Section 5.2

3. Create a Venn diagram illustrating an Event A, and its complement.

ANS:

PTS: 1 OBJ: Section 5.3

4. From an ordinary deck of 52 playing cards one is selected at random. Define

the following events:

A = card selected is an Ace.

B = card selected is a Queen.

C = card selected is a three.

Are A, B, and C mutually exclusive events?

Use the addition rule to find P(A or B or C).

ANS:
Yes; 0.2308

PTS: 1 OBJ: Section 5.4

5. According to an old song lyric, “love and marriage go together like a horse
and carriage.” Let love be event A and marriage be event B. Are events A and B
mutually exclusive?
ANS:
No

PTS: 1 OBJ: Section 5.4

6. One card is randomly selected from a deck of 52 playing cards. Define the
following events:

A = card selected is a five.

B = card selected is a ten.

C = card selected is a jack.

Find P(not A or not B or not C) using the addition rule.

ANS:
1 – [(4/52) + (4/52) + (4/52)] = 0.7692

PTS: 1 OBJ: Section 5.4

Suppose one of the candidates is selected at random. Define the following

events:

A = person selected has 9 years experience.

B = person selected is a female.

NARREND
7. Are events A and B independent? Explain using probability.

ANS:
No; P(A/B) is not equal to P(A).

PTS: 1 OBJ: Section 5.5

8. A Gulf Coast travel park has the following accommodations:

Number of Bedrooms
Location 3 Bedroom 4 Bedroom Total
Beach Front 17 24 41
Non Beach Front 6 210 216
Total 23 234 257

Is the event of selecting a beach front site independent of the event of selecting
a 3 bedroom facility? Explain.

ANS:
No; P(beach front) = .1595; P(3 bedroom) = .0895 P(beach front/3 bedroom) = .
7391 Since 0.1595 is not equal to 0.7391 or 0.0895 is not equal to 0.7391, these
events are not independent events.

PTS: 1 OBJ: Section 5.5

NARRBEGIN: Gender
The physical science degrees conferred by a school between 1992 and 1995
were broken down as follows:

Suppose a person is selected at random from these graduates. Consider the

following events:

M: The person is a male.

F: The person is a female.

P: The person graduated in physics.

C: The person graduated in chemistry.

G: The person graduated in geology.

NARREND
9. Are the events C and F independent?

NARRBEGIN: Burger Queen Co.

The Burger Queen Company has 124 locations along the west coast. The general
manager is concerned with the profitability of the locations compared with major
menu items sold. The information below shows the number of each menu item
selected by profitability of store.
NARREND
20. If a menu order is selected at random, describe the following in words.

A) P(M5)

B) P(R3)

C) P(R2 and M3)

D) P(M2 / R2)

E) P(R1 / M4)

ANS:
Probability of tacos being ordered.; Probability of a store being a Low Profit
Store.; Probability that a Father Burger is ordered at a Medium Profit Store.;
Probability of a Mother Burger being ordered knowing it was at a Medium Profit
Store.; Probability that the store is High Profit given Nachos are ordered.

PTS: 1 OBJ: Section 5.8

Portfolio Composition
Gender Bonds Stocks Balanced
Male 0.18 0.20 0.25
Female 0.12 0.05 0.20

One client is selected at random, and two events A and B are defined as follows:

A: The client selected is male.

B: The client selected has a balanced portfolio.

NARREND
26. Express each of the following events in words:

A) A or B

B) A and B

C) A and

D) or

ANS:
The client selected either is male or has a balanced portfolio or both.; The client
selected is male and has a balanced portfolio.; The client selected is male and
has an unbalanced portfolio.; The client selected either is female or has an
unbalanced portfolio or both.

PTS: 1 OBJ: Section 5.8

27. Find the following probabilities:

A) P(A)

B) P(B)

ANS:
0.63; 0.45

PTS: 1 OBJ: Section 5.8

28. Find the following probabilities:

A) P(A or B)

B) P(A and B)

ANS:
0.83; 0.25

PTS: 1 OBJ: Section 5.8

29. Express each of the following probabilities in words:

A) P(A/B)

B) P(B/A)

ANS:
The probability that the employee selected is male, given that the employee has
a balanced portfolio.; The probability that the employee selected has a balanced
portfolio, given that the employee is male.

PTS: 1 OBJ: Section 5.8

30. Find the following probabilities:

A) P(A/B)

B) P(B/A)

ANS:
0.555; 0.397
PTS: 1 OBJ: Section 5.8

31. Are A and B independent events? Explain.

ANS:
No; P(A / B) = 0.555 is not equal to P(A) = 0.63

PTS: 1 OBJ: Section 5.8

32. Are A and B mutually exclusive events? Explain.

ANS:
No. Since it’s possible to be both a male and have a balanced fund, P(A and B) =
0.25 which is not equal to zero.

PTS: 1 OBJ: Section 5.8

33. There are 12 players on a basketball team and 5 of those players start the
game. How many different starting lineups are possible?

ANS:
12 C 5 = 792

PTS: 1 OBJ: Section 5.7

ESSAY

1. What is the subjective approach to probability?

ANS:
The degree to which one happens to believe that an event will or will not
happen.

PTS: 1 OBJ: Section 5.2

ANS:
P(A / B) = P(A) or P(B /A) = P(B).

PTS: 1 OBJ: Section 5.5

ANS: F PTS: 1 OBJ: Section 6.3

9. True or False
The binomial distribution requires that the probability of a success for each trial
remains constant.
ANS: T PTS: 1 OBJ: Section 6.2

10. True or False

Theoretically, the number of successes in a binomial distribution has no limit.

ANS: F PTS: 1 OBJ: Section 6.2

11. True or False

The probability of success in a hypergeometric distribution does not remain
constant from one trial to another.

ANS: T PTS: 1 OBJ: Section 6.3

12. True or False

The binomial distribution is best used to describe the number of customers
arriving at a service point during a given period of time.

ANS: F PTS: 1 OBJ: Section 6.4

13. True or False

Theoretically, the number of times an event can occur over the given time span
in a Poisson distribution has no limit.

ANS: T PTS: 1 OBJ: Section 6.4

14. True or False

For a Bernoulli process in which the number of trials is large and the probability
of success on any given trial is very small, the Poisson distribution can be used
as an approximation to the binomial distribution.

ANS: T PTS: 1 OBJ: Section 6.5

MULTIPLE CHOICE

1. Which of the following is a discrete random variable?

a. The average daily consumption of water in a U.S. household.
b. The weight of football players in the NFL.
c. The number of three-point shots completed in a college basketball game.
d. The time required to drive from Dallas to Denver.
e. The average daily temperature in the world.
ANS: C PTS: 1 OBJ: Section 6.1

2. Which of the following is not a characteristic of a discrete probability

distribution?
a. The sum of the probabilities is one.
b. The values of x are exhaustive.
c. The value for the probability of any given x ranges from 0 to 1.
d. The values of x are mutually exclusive.
e. The sum of the probabilities for all possible values of x must be between 0
and 1.
ANS: E PTS: 1 OBJ: Section 6.1

3. Which of the following most likely represents a discrete random variable?

a. Length of time between calls to an 800 number.
b. The number of years completed in the military services.
c. The S & P Industrial average of stock prices.
d. The amount of retail sales on a given day.
e. Length of time for which an apartment in a large complex remains vacant.
ANS: B PTS: 1 OBJ: Section 6.1

4. A table, formula, or graph that shows all possible values a random variable
can assume, together with their associated probabilities is referred to as:
a. Discrete probability distribution
b. Continuous probability distribution
c. Mixed probability distribution
d. Contaminated probability distribution
ANS: A PTS: 1 OBJ: Section 6.1

5. A new car salesperson knows that he sells cars to one customer out of 20 who
enter the showroom. The probability that he will sell a car to exactly two of the
next three customers is:
a. 0.9939
b. 0.0075
c. 0.0071
d. 0.0851
e. 0.1354
ANS: C PTS: 1 OBJ: Section 6.2

6. Approximately 84% of persons age 70 to 84 live in their own household and

are income-qualified for home purchases. If four persons are randomly selected
from this population, the probability that exactly two of the four live in their own
household and are income-qualified is:
a. 0.8916
b. 0.4182
c. 0.0138
d. 0.5404
e. 0.1084
ANS: E PTS: 1 OBJ: Section 6.2

7. Approximately 14 percent of the population of Arizona is 65 years or older. A

random sample of five persons from this population is taken. The probability that
less than 2 of the 5 are 65 years or older is:
a. 0.8533
b. 0.1467
c. 0.4704
d. 0.3829
e. None of these.
ANS: A PTS: 1 OBJ: Section 6.2

8. A barbershop requires appointments for perms and hair cuts. Ten percent of
those making appointments cancel or simply fail to show up. Next week’s
appointment calendar has 64 appointments. Let x be the number of missed
appointments out of the 64. The probability that more than 3 cancellations
and/or no-shows will occur during the next week is:
a. 0.3784
b. 0.8937
c. 0.7795
d. 0.9611
e. 0.1063
ANS: B PTS: 1 OBJ: Section 6.2

9. A Company manufactures women’s hosiery. The company sells slightly

irregular panty hose through a mail-order catalog service. If the company
produces 300,000 pairs of hose per day and the probability of a pair not being
irregular is 0.92, the average number that will be available for the catalog order
department is:
a. 22080
b. 148.59
c. 24000
d. 154.92
e. 15.49
ANS: C PTS: 1 OBJ: Section 6.2

10. A survey of college students taking the professional exam to be certified as

public school teachers shows that 15 percent fail. On a national exam day,
12,000 students take the test. Let x denote the number who fail. The mean and
standard deviation of the random variable x are, respectively:
a. 1800; 1530
b. 1800; 39.11
c. 10,200; 1530
d. 10,200; 39.11
e. 1200; 35.71
ANS: B PTS: 1 OBJ: Section 6.2

11. Brendalee and Mohammed go to a coffee shop during their lunch break and
toss a coin to see who will pay. The probability that Brendalee will pay three
days in a row is:
a. 0.2500
b. 0.5000
c. 0.1250
d. 0.0150
e. none of these.
ANS: C PTS: 1 OBJ: Section 6.2
12. Which of the following is not a characteristic of the hypergeometric
distribution?
a. The hypergeometric distribution is similar to the binomial distribution in
focusing on the number of successes in a given number of consecutive trials.
b. The hypergeometric distribution is similar to the binomial distribution in the
fact that the probability of success remains constant from one trail to the rest.
c. The hypergeometric distribution relies on sampling without replacement.
d. The hypergeometric distribution, the consecutive trials are not independent.
e. All of the above are characteristics of the hypergeometric distribution.
ANS: B PTS: 1 OBJ: Section 6.3

13. Which probability distribution is appropriate when sampling is performed

without replacement from a relatively small population?
a. Binomial distribution
b. Poisson distribution
c. Hypergeometric distribution
d. Normal distribution
e. Exponential distribution
ANS: C PTS: 1 OBJ: Section 6.3

14. The expected value, E(x), of a binomial probability distribution is:

a. n +
b. n (1 – )
c. n
d. n + – 1
ANS: C PTS: 1 OBJ: Section 6.2

15. Which of the following is not a characteristic of a binomial experiment?

a. There is a sequence of identical trials.
b. Each trial results in two or more outcomes.
c. The trials are independent of each other.
d. Probability of success p is the same from one trial to another.
ANS: B PTS: 1 OBJ: Section 6.2
16. The variance of a binomial distribution for which n = 75 and = 0.20 is:
a. 375.
b. 75.
c. 15.
d. 12.
ANS: D PTS: 1 OBJ: Section 6.2

17. The likelihood that someone who logs onto a particular site in a “shopping
mall” on the Internet will purchase an item is 0.05 and follows the binomial
distribution. If the site has 35 people accessing it in the next hour, what is the
expected number of successes during this hour?
a. 1.75
b. 2.5
c. 0.05
d. 12
e. 35
ANS: A PTS: 1 OBJ: Section 6.2

18. Which of the following statements are true?

a. For the Poisson distribution = 3.2, the mean and standard deviation are both
equal to 3.2.
b. For the Poisson distribution = 3.2, the mean and variance are both equal to
3.2.
c. For the Poisson distribution = 3.2, the mean is 3.2 and the standard deviation
is 1.79.
d. Both B and C are correct.
e. All of these are correct.
ANS: D PTS: 1 OBJ: Section 6.4

19. Tornadoes for January in Kansas average 3.2 per month. The probability that
in the next January Kansas will experience exactly 2 tornadoes is:
a. 0.7913.
b. 0.4076.
c. 0.2087.
d. 0.1304.
e. 0.2226.
ANS: C PTS: 1 OBJ: Section 6.4

20. Tornadoes for January in Kansas average 3.2 per month. The probability that
in the next January there will be between 1 and 3 tornadoes (inclusive) is:
a. 0.2087.
b. 0.5617.
c. 0.4383.
d. 0.4076.
e. 0.5924.
ANS: B PTS: 1 OBJ: Section 6.4

21. Tornadoes for January in Kansas average 3.2 per month. The probability that
in the next January at least 2 tornadoes will occur is:
a. 0.9592.
b. 0.0408.
c. 0.8288.
d. 0.1712.
e. none of these.
ANS: C PTS: 1 OBJ: Section 6.4

NARRBEGIN: Police
A local police station receives an average 8.1 emergency telephone calls per
hour. These calls are Poisson distributed.
NARREND
22. The probability that the station will get nine calls in an hour is:
a. 0.1256.
b. 0.8744.
c. 0.0408.
d. 0.6918.
e. 0.3082.
ANS: A PTS: 1 OBJ: Section 6.4

23. The probability that the station will get five to seven calls in an hour is:
a. 0.5924.
b. 0.5617.
c. 0.4383.
d. 0.4076.
e. 0.3451.
ANS: E PTS: 1 OBJ: Section 6.4

24. The probability that the station will get at least 4 calls in an hour is:
a. 0.0397.
b. 0.0941.
c. 0.9059.
d. 0.9603.
e. 0.9630.
ANS: D PTS: 1 OBJ: Section 6.4

25. A cashier at Carter’s cafeteria can total an average of 2.2 trays per minute.
The probability that the cashier will total exactly four trays in a minute is:
a. 0.9275.
b. 0.8918.
c. 0.1082.
d. 0.0992.
e. 0.1169.
ANS: C PTS: 1 OBJ: Section 6.4

26. A cashier at Carter’s cafeteria can total an average of 2.2 trays per minute.
The probability that the cashier will total between four and ten trays in a minute
is:
a. 0.9281.
b. 0.8193.
c. 0.1807.
d. 0.3772.
e. 0.0724.
ANS: E PTS: 1 OBJ: Section 6.4

27. A cashier at Carter’s cafeteria can total an average of 2.2 trays per minute.
The probability that the cashier will total no more than three trays in a minute is:
a. 0.1966.
b. 0.6227.
c. 0.9275.
d. 0.8193.
ANS: D PTS: 1 OBJ: Section 6.4

28. As a rule of thumb, a binomial distribution for which the number of trials n is
large can well be approximated by a Poisson distribution when the probability of
success, , is:
a. larger than 0.95.
b. larger than 0.50.
c. between 0.50 and 0.95.
d. smaller than .05.
ANS: D PTS: 1 OBJ: Section 6.4

29. The Poisson random variable is a:

a. discrete random variable with infinitely many possible values.
b. discrete random variable with finite number of possible values.
c. continuous random variable with infinitely many possible values.
d. continuous random variable with finite number of possible values.
ANS: A PTS: 1 OBJ: Section 6.4

30. Which of the following events is best described using a hypergeometric

distribution?
a. The number of customers entering a store during the next hour.
b. The number of accidents at a particular intersection during the next month.
c. The number of male jurors selected from a group of 25 individuals.
d. The number of correct responses in a multiple choice exam.
e. The number of heads after tossing a fair coin 10 times.
ANS: C PTS: 1 OBJ: Section 6.3

NARRBEGIN: Chocolates
A box of chocolates contains 18 pieces, 10 of which have nuts while the
remaining 8 do not. Four pieces are chosen at random.
NARREND
31. What is the probability that exactly 2 pieces have nuts?
a. 0.412
b. 0.564
c. 0.681
d. 0.750
e. 0.833
ANS: A PTS: 1 OBJ: Section 6.3

32. What is the probability that no more than one piece has nuts?
a. 0.116
b. 0.206
c. 0.289
d. 0.444
e. 0.517
ANS: B PTS: 1 OBJ: Section 6.3

33. What is the probability that at least 3 pieces have nuts?

a. 0.051
b. 0.118
c. 0.169
d. 0.242
e. 0.382
ANS: E PTS: 1 OBJ: Section 6.3

NUMERIC RESPONSE

1. The number of vacancies at a Gulf Shore resort motel on a day during

weekends through the tourist season has the following probability distribution:

If the mean is 2.07, compute the variance of this distribution.

ANS: 3.5851

PTS: 1 OBJ: Section 6.1

NARRBEGIN: Egyptian
Let x represent the number of children in an Egyptian household. The probability
distribution of x is as follows:
NARREND
2. What is the probability that a randomly selected Egyptian household will have
more than 2 children?

ANS: 0.42

PTS: 1 OBJ: Section 6.1

3. What is the probability that a randomly selected Egyptian household will have
between 2 and 4 children?

ANS: 0.65

7. A high school play has five roles to fill with students. Seven girls and nine
boys have expressed an interest in the play. What is the probability that exactly
3 girls will be selected?

17. An attorney representing a client in an injury suit surveys the jury panel and
finds that 30% of the potential jurors have experienced some type of job related
injury. The attorney is hopeful that he will have six of the twelve jurors from this
group. What is the probability that at least 6 jurors will have experienced a job-
related injury?

ANS: 0.1178

PTS: 1 OBJ: Section 6.2

NARRBEGIN: Motor Co.

A Motor Company has purchased steel parts from a supplier for several years
and has found that 10% of the parts must be returned because they are
defective. An order of 25 parts is received.
NARREND
18. What is the probability that no more than three of these parts are defective?

ANS: 0.7636

PTS: 1 OBJ: Section 6.2

NARRBEGIN: Appliance store

A small appliance store has 10 VCR’s in stock. Four of the VCR’s were damaged
in shipment. The owner of the store gives his daughter and his son each a VCR
for a birthday present.
NARREND
19. What is the probability that both the gift VCR’s will be defective?

ANS: 0.1209

PTS: 1 OBJ: Section 6.3

20. Ninety-five percent of the stockholders of an electric utility company own

stock in other companies. If three stockholders are selected at random, what is
the probability that exactly one has stock in another company?

ANS: 0.007125

PTS: 1 OBJ: Section 6.2

NARRBEGIN: Stockholders
The listed occupations of stockholders of a regional electric utility company
included 9 percent who were homemakers. Six of these stockholders are
randomly selected.
NARREND
21. What is the probability that no stockholders are homemakers?

ANS: 0.5679

PTS: 1 OBJ: Section 6.2

22. What is the probability that exactly three are homemakers?

ANS: 0.0110

PTS: 1 OBJ: Section 6.2

23. What is the probability that at least one is a homemaker?

ANS: 0.4321

PTS: 1 OBJ: Section 6.2

24. In an intermediate level economics class there are 18 students. Nine of

these are economics majors. For class discussion purposes three students are
randomly selected. What is the probability that at least one is an economics
major?

ANS: 0.8971

PTS: 1 OBJ: Section 6.3

NARRBEGIN: Chamber of Commerce

A local chamber of commerce is backing a plan for a new convention center. The
chamber states that 60 percent of the voters favor the plan, which would raise
tourism business and taxes for the residents. Four of the registered voters in the
community are called at random. X is the number of voters called who say they
favor the plan.
NARREND
25. Find the probability that exactly 2 voters sampled favor the plan.
ANS: 0.3456

PTS: 1 OBJ: Section 6.2

26. Find the probability that no one says they favor the plan.

ANS: 0.0256

PTS: 1 OBJ: Section 6.2

NARRBEGIN: New York City

New York City is estimated to have 21 percent of the homes with T.V. sets served
by cable T.V. If a random sample of four is taken from these homes find the
probability distribution of x where x is the number of T.V. homes in the sample
having cable T.V.
NARREND
27. What is the probability that all four T.V. homes in the sample are served by
cable?

ANS: 0.0019

PTS: 1 OBJ: Section 6.2

28. What is the probability that at least one T.V. home in the sample is served by
cable?

NARRBEGIN: Daisy wheel

A manufacturer of daisy wheel print heads for typewriters and printers knows
that 1.5% of the print heads manufactured have a defect. If a production run is
120 print heads.
NARREND
43. Determine the probability that exactly three print heads are defective.

ANS: 0.1607

PTS: 1 OBJ: Section 6.4

PTS: 1 OBJ: Section 6.4

52. Find the probability that between 8 and 10 (inclusive) students will log-in
during the next 5-minute interval.

ANS: 0.227

PTS: 1 OBJ: Section 6.4

NARRBEGIN: Plywood Manufacturer

A plywood manufacturer produces an exterior grade of plywood for which 0.3
percent fails to meet the industry standard. One thousand sheets are purchased
by a lumberyard for retail sale. Use the Poisson distribution to approximate the
binomial distribution.
NARREND
53. What is the probability that none of the sheets sold are sub-standard?

ANS: 0.0498

PTS: 1 OBJ: Section 6.4

54. What is the probability that more than five sheets are sub-standard?
ANS: 0.0840

PTS: 1 OBJ: Section 6.4

55. What is the probability that fewer than three sheets are sub-standard?

5. The binomial distribution deals with ____________________ trials, each of which

has ____________________ possible outcomes.

ANS:
consecutive; two
consecutive, 2

PTS: 1 OBJ: Section 6.2

6. The Poisson distribution is applied to events for which the probability of

occurrence over a given span of time, space, or distance is ____________________.
ANS: extremely small

PTS: 1 OBJ: Section 6.4

7. The binomial distribution samples ____________________ replacement while the

hypergeometric distribution samples ____________________ replacement.

ANS: with, without

PTS: 1 OBJ: Section 6.3

8. The ____________________ probability distribution deals with consecutive trials

with only two outcomes that are not statistically independent.

ANS: hypergeometric

PTS: 1 OBJ: Section 6.6

9. The ____________________ for a discrete random variable lists all possible

values the variable can assume, along with their respective probabilities of
occurrence.

ANS: probability distribution

PTS: 1 OBJ: Section 6.1

10. The ____________________ probability distribution deals with consecutive trials

that are statistically independent, each of which has only two possible
outcomes, generally referred to as success or failure.

ANS: binomial

PTS: 1 OBJ: Section 6.2

11. The ____________________ applies to events for which the probability of

occurrence over a given span of time, space, or distance is extremely small.

ANS: Poisson distribution

PTS: 1 OBJ: Section 6.4

SHORT ANSWER
NARRBEGIN: Distribution
The probability distribution of a discrete random variable x is shown below.
NARREND
1. Find the expected value, the variance, and the standard deviation of x.

E(x) = ____________________.

Variance = ____________________.

SD = ____________________.

ANS:
1.25; 0.9875; 0.9937

PTS: 1 OBJ: Section 6.1

2. Find the following probabilities:

a. P(X > 1)
2)b. P(X
2) X c. P(1
d. P(0 <X < 1)
3) X e. P(1

ANS:
0.35, 0.85, 0.60, 0.00, 0.75

PTS: 1 OBJ: Section 6.1

NARRBEGIN: MBI Co.

The MBI Company found that at the end of each month, 2% of its two million
accounting entries contained errors. Today, one operator has made 50 computer
entries.
NARREND
3. Determine the mean and standard deviation of errors in accounting entries.

Mean = ____________________

SD = ____________________
ANS:
1; 0.9899

PTS: 1 OBJ: Section 6.2

NARRBEGIN: Motor Co.

A Motor Company has purchased steel parts from a supplier for several years
and has found that 10% of the parts must be returned because they are
defective. An order of 25 parts is received.
NARREND
4. What are the mean and standard deviation of the defective parts?

Mean = ____________________

7. What are the parameters of a random variable described by the binomial

distribution?

ANS:
The parameters are: n; the number of trials, and the probability of success in
any given trial.

PTS: 1 OBJ: Section 6.2

8. The listed occupations of stockholders of a regional electric utility company

included 9 percent who were homemakers. If we randomly select six
stockholders, compute the mean and standard deviation of the number of
stockholders who are homemakers in the sample.

Mean = ____________________

SD = ____________________

ANS:
0.54; 0.7010

PTS: 1 OBJ: Section 6.2

NARRBEGIN: New York City

New York City is estimated to have 21 percent of the homes with T.V. sets served
by cable T.V. If a random sample of four is taken from these homes find the
probability distribution of x where x is the number of T.V. homes in the sample
having cable T.V.
NARREND
9. Compute the mean and standard deviation of the number of T.V. homes with
cable service in the sample.
Mean = ____________________

Standard deviation = ____________________

ANS:
0.84; 0.8146

PTS: 1 OBJ: Section 6.2

NARRBEGIN: Canoe club

A canoe club sponsor has taken canoeing groups through a particularly rough
section of white water on a mountain river. Past trips and experience of the
sponsor lead her to believe that fifty percent of the canoeists who attempt to
paddle their way through this section will overturn. At the present time, there
are five canoes approaching this treacherous section. Assume that the sponsor’s
estimate of the probability of a canoe overturning in this section of water is
accurate.
NARREND
10. Develop the probability distribution of the number of canoes that will
capsize.

ANS:

x P(x)
0 0.0313
1 0.1562
2 0.3125
3 0.3125
4 0.1562
5 0.0313
PTS: 1 OBJ: Section 6.2

11. What is the expected number of canoes that will capsize?

ANS:

PTS: 1 OBJ: Section 6.2

12. What is the standard deviation of the number of canoes that will capsize?
ANS:

PTS: 1 OBJ: Section 6.2

= 0.4, find the following probabilities using the binomial table.13. Given a
binomial random variable with n = 15 and
12)a. P(x
10)b. P(x
c. P(x = 8)
xd. P(9 < 12)
e. P(6 < x < 10)

ANS:
0.9997, 0.0338, 0.1181, 0.0931, 0.3564

PTS: 1 OBJ: Section 6.2

14. A recent survey in Michigan revealed that 60% of the vehicles traveling on
highways, where speed limits are posted at 70 miles per hour, were exceeding
the limit. Suppose you randomly record the speeds of ten vehicles traveling on
US 131 where the speed limit is 70 miles per hour. Let x denote the number
vehicles that were exceeding the limit. Find the following probabilities:
a. P(x = 10)
b. P(4 < x < 9)
xc. P(3

ANS:
0.006, 0.787, 0.988

PTS: 1 OBJ: Section 6.2

15. Compute the following probabilities (to 4 decimal places) using the Poisson
formula:

A) P(x = 3), if = 2.5

B) P(x 1), if = 2.0

C) P(x 2), if = 3.0

ANS:
0.2138; 0.4060; 0.8009

PTS: 1 OBJ: Section 6.4

16. Let x be a Poisson random variable with = 6. Use the table of Poisson
probabilities to find:

A) P(x 8)

B) P(x = 8)

C) P(x 5)

D) P(6 x 10)

ANS:
0.8472; 0.1033; 0.7149; 0.5117

PTS: 1 OBJ: Section 6.4

17. Let x be a Poisson random variable with = 8. Use the table of Poisson
probabilities to find:

A) P(x 6)

B) P(x = 4)

C) P(x 3)

D) P(9 x 14)

ANS:
0.3134; 0.0573; 0.9862; 0.3902

PTS: 1 OBJ: Section 6.4

18. Phone calls arrive at the rate of 30 per hour at the reservation desk for a
hotel.

A) Find the probability of receiving three calls in a five-minute interval of time.

B) Find the probability of receiving exactly seven calls in 15 minutes.

PTS: 1 OBJ: Section 6.1

2. List the four characteristics of a Bernoulli process.

ANS:
(1) There are two or more consecutive trials; (2) in each trial there are just two
possible outcomes, usually denoted as success or failure; (3) The trials are
statistically independent; (4) The probability of a success remains the same from
one trial to the next.

PTS: 1 OBJ: Section 6.2

3. In response to a major competitor, a local pizza company begins to pay $5 to

customers whose home delivered pizza did not arrive within 30 minutes after
the order was placed. Explain why you applied that specific distribution to
answer the preceding question.

ANS:
The Poisson distribution is a discrete probability distribution for an event
occurring over time with a low probability of success.

PTS: 1 OBJ: Section 6.3

4. Assume that you used Minitab statistical package to generate the individual
binomial probabilities when n = 100 and = .042, and then generate the
individual Poisson probabilities for = 4.2. Do you expect the probabilities
obtained in both cases to be similar or different?

Explain.

ANS:
It is expected that the respective probabilities obtained in both cases to be
slightly different, but close to each other. In general, for a given value of , the
Poisson approximation to the binomial distribution becomes closer for longer
values of n.

PTS: 1 OBJ: Section 6.4

Chapter 7. Continuous
Probability Distributions
Test Bank

TRUE/FALSE

1. True or False
In any normal distribution, the mean, median, mode, and standard deviation are
all at the same position on the horizontal axis.

ANS: F PTS: 1 OBJ: Section 7.2

2. True or False
In the normal distribution, the curve is asymptotic but never intercepts the
horizontal axis either to the left or right.

ANS: T PTS: 1 OBJ: Section 7.2

3. True or False
In the normal distribution, the total area beneath the curve represents the
probability for all possible outcomes for a given event.

ANS: T PTS: 1 OBJ: Section 7.2

4. True or False
Under certain conditions, the normal distribution can be used to approximate
the binomial distribution.

ANS: T PTS: 1 OBJ: Section 7.4

5. True or False
There exists a different normal curve for every possible pair of and .
ANS: T PTS: 1 OBJ: Section 7.3

6. True or False
The standard deviation of the binomial distribution with n = 25 and = .50 is
6.25.

ANS: F PTS: 1 OBJ: Section 7.4

7. True or False
The mean of the exponential distribution is the inverse of that of the normal
distribution.

ANS: F PTS: 1 OBJ: Section 7.5

8. True or False
If Excel and Minitab packages are both used to generate its own sample of
10,000 observations from a theoretical continuous distribution, the two sets of
observations are expected to be identical.

ANS: F PTS: 1 OBJ: Section 7.6

9. True or False
According to the law of large numbers, frequency distributions generated by
statistical packages will more closely approach the theoretical distribution from
which they were drawn whenever the number of observations becomes larger.

ANS: T PTS: 1 OBJ: Section 7.6

10. True or False

Continuous probability distributions describe probabilities associated with
random variables that can take on any value along a given range or continuum
and for which there are no gaps between these possible values.

ANS: T PTS: 1 OBJ: Section 7.7

11. True or False

For any specified interval of values, the probability that a continuous random
variable x will assume a value within the interval is the area beneath the curve
between the two points describing the interval.
ANS: T PTS: 1 OBJ: Section 7.7

12. True or False

Any normal distribution is a symmetrical, bell-shaped curve, with mean = 0.0
and standard deviation = 1.0.

ANS: F PTS: 1 OBJ: Section 7.7

13. True or False

Regardless of the shape of a particular normal curve, about 75% of the area is
within the interval , where and are the mean and the standard deviation,
respectively.

ANS: F PTS: 1 OBJ: Section 7.7

14. True or False

The standard normal distribution has a mean of 0.0 and standard deviation of
1.0.

ANS: T PTS: 1 OBJ: Section 7.7

15. True or False

The exponential distribution is a family of discrete distributions, all of which are
negatively skewed.

ANS: F PTS: 1 OBJ: Section 7.7

16. True or False

Computer statistical packages, such as Excel and Minitab, can determine the
exact area beneath a specified portion of the continuous distribution curve, or
probability density function, and eliminate the need for calculations or table
references.

ANS: T PTS: 1 OBJ: Section 7.7

MULTIPLE CHOICE

1. A continuous probability distribution represents a random variable:

a. having outcomes, which occur in counting numbers.
b. having an infinite number of outcomes which may assume any number of
values within an interval.
c. which is best described in a histogram.
d. which has a definite probability for the occurrence of a given integer.
e. None of these is correct.
ANS: B PTS: 1 OBJ: Section 7.1

2. Which of the following are not correct concerning the probability distribution
for any continuous random variable?
a. The vertical coordinate is the probability density function.
b. The range of the random variable is found on the y-axis.
c. The total area represented under the curve will be equal to 1.00.
d. The probability that x will take on a value between a and b will be the area
under the curve between points a and b.
e. The area under the curve represents the sum of probabilities for all possible
outcomes.
ANS: B PTS: 1 OBJ: Section 7.1

3. In a continuous probability distribution, the probability that x will take on an

exact value:
a. is equal to the height of the curve at that value.
b. is calculated using the probability density.
c. is always equal to 0.
d. is always greater than 0.
e. None of these is correct.
ANS: C PTS: 1 OBJ: Section 7.1

4. Which of the following statements are true regarding the areas beneath any
normal curve?
a. About 68.3% of the area is in the interval to .
b. About 95.5% of the area is in the interval to .
c. Nearly all of the area (about 99.7%) is in the interval to
d. All of these are true.
e. None of these is true.
ANS: D PTS: 1 OBJ: Section 7.2
5. Which of the following is not a characteristic for a normal distribution?
a. It is symmetrical distribution
b. The mean is always zero
c. The mean, median, and mode are all equal
d. It is a bell-shaped distribution
e. The area under the curve always equals 1.0
ANS: B PTS: 1 OBJ: Section 7.2

6. A videotape store has an average weekly gross of $1,158 with a standard

deviation of $120. Let x be the store’s gross during a randomly selected week. If
this is a normally distributed random variable, then the number of standard
deviations from $1,158 to $1,360 is:
a. 0.4535.
b. 0.0465.
c. 20.98.
d. 1.683.
e. none of these.
ANS: D PTS: 1 OBJ: Section 7.3

7. Using the standard normal table, the total area between z = -0.75 and z =
1.21 is:
a. 0.2734
b. 0.3869
c. 0.3397
d. 0.2266
e. 0.6603
ANS: E PTS: 1 OBJ: Section 7.3

8. Let z1 be a z score that is unknown but identifiable by position and area. If the
area to the right of z1 is 0.8413, then the value of z1 must be:
a. 1.00.
b. -1.00.
c. 0.00.
d. 0.41.
e. -0.41.
ANS: B PTS: 1 OBJ: Section 7.3

9. Using the standard normal table, the total area between z = -1.82 and z =
-1.38 is:
a. 0.0494
b. 0.4656
c. 0.1554
d. 0.4162
e. 0.1005
ANS: A PTS: 1 OBJ: Section 7.3

10. If the area to the right of a positive z1 is 0.0869, then the value of z1 must
be:
a. -1.36.
b. 1.36.
c. 1.71.
d. 1.80.
e. 0.22.
ANS: B PTS: 1 OBJ: Section 7.3

11. The z-score representing the 10th percentile of the standard normal
distribution is:
a. 0.255.
b. -0.255.
c. -1.645.
d. 1.28.
e. -1.28.
ANS: E PTS: 1 OBJ: Section 7.3

12. The z-score representing the 75th percentile of the standard normal
distribution is:
a. 0.67.
b. -0.67.
c. 1.28.
d. -1.28.
e. 1.645.
ANS: A PTS: 1 OBJ: Section 7.3

13. The z-score representing the 90th percentile of the standard normal
distribution is:
a. 1.28.
b. -1.28.
c. 0.67.
d. -0.67.
e. 1.645.
ANS: A PTS: 1 OBJ: Section 7.3

14. For a normal curve, if the mean is 20 minutes and the standard deviation is
5 minutes, then the area between 22 and 25 minutes is:
a. 0.3413.
b. 0.1554.
c. 0.4967.
d. 0.1859.
e. 0.2248.
ANS: D PTS: 1 OBJ: Section 7.3

15. For a normal curve, if the mean is 20 minutes and the standard deviation is
5 minutes, then the area between 11 and 19 minutes is:
a. 0.4641.
b. 0.0359.
c. 0.3848.
d. 0.8848.
e. 0.9641.
ANS: C PTS: 1 OBJ: Section 7.3

16. A bakery firm finds that its average weight of the most popular package of
cookies is 32.06 ounces with a standard deviation of 0.1 ounces. What portion of
cookie packages will weigh less than 31.9 ounces or more than 32.3 ounces?
a. 0.8000
b. 0.4452
c. 0.4918
d. 0.9370
e. 0.0630
ANS: E PTS: 1 OBJ: Section 7.3

17. A retailer finds that the demand for a very popular board game averages
100 per week with a standard deviation of 20. If the seller wishes to have
adequate stock 95% of the time, how many of the games must she keep on
hand?
a. 139.2
b. 100.0
c. 132.9
d. 195.0
e. 125.6
ANS: C PTS: 1 OBJ: Section 7.3

18. A manufacturer of tow chains finds that the average breaking point is at
3,500 pounds and the standard deviation is 250 pounds. If you pull a weight of
at least 4200 pounds with this tow chain, what percentage of the time would
you expect the chain to break?
a. 2.8%
b. 0.26%
c. 49.74%
d. 99.74%
e. 50%
ANS: B PTS: 1 OBJ: Section 7.3

19. The average labor time to sew a pair of denim jeans is 4.2 hours with a
standard deviation of 30 minutes. If the distribution is normal, then the
probability of a worker finishing a pair of jeans in less than 3.5 hours is:
a. 0.0808.
b. 0.4192.
c. 0.5808.
d. 0.9192.
e. 0.9808.
ANS: A PTS: 1 OBJ: Section 7.3

20. A salesman who uses his car extensively finds that his gasoline bills average
$125.32 per month with a standard deviation of $49.51. The probability that his
bill will be less than $50 a month or more than $150 for a single month is:
a. 0.4357.
b. 0.1915.
c. 0.6272.
d. 0.3728.
e. 0.6915.
ANS: D PTS: 1 OBJ: Section 7.3

21. Given that z is a standard normal random variable and that the area to the
right of z is 0.1949, then the value of z must be:
a. 0.51.
b. -0.51.
c. 0.86.
d. -0.86.
ANS: C PTS: 1 OBJ: Section 7.3

22. Using the standard normal table, the total area between z = 0.45 and z =
1.05 is:
a. 0.1736
b. 0.3531
c. 0.3264
d. 0.6469
e. 0.1795
ANS: E PTS: 1 OBJ: Section 7.3

23. Given that z is a standard normal random variable, a negative value of z

indicates that:
a. The value z is to the left of the mean.
b. The value z is to the right of the median.
c. The standard deviation of z is negative.
d. The area between zero and z is negative.
e. The probability associated with z is negative.
ANS: A PTS: 1 OBJ: Section 7.3

24. Given that z is a standard normal random variable, and that the area to the
right of z is 0.9066, then the value of z must be:
a. 1.32.
b. -1.32.
c. 0.66.
d. -0.66.
ANS: B PTS: 1 OBJ: Section 7.3

25. The proportion of the data from a standard normal distribution that falls
within two standard deviations from the mean is:
a. 0.3413.
b. 0.4772.
c. 0.6826.
d. 0.9544
ANS: D PTS: 1 OBJ: Section 7.3

26. If the z-value for a given value x of the random variable x is z = 1.96, and
the distribution of x is normally distributed with a mean of 60 and a standard
deviation of 6, then the x-value that this z-value corresponds to is:
a. 71.76.
b. 67.96.
c. 61.96.
d. 48.24.
ANS: A PTS: 1 OBJ: Section 7.3

27. Your high school graduating class had 564 members. Thirty-three percent of
these are expected to attend college. If the number of students who attend
college follows the normal distribution, the probability that less than 160 will
attend college is:
a. 0.3610.
b. 0.4900.
c. 0.0090.
d. 0.0832.
e. 0.2500
ANS: C PTS: 1 OBJ: Section 7.4

28. A large mail house which mails such items as catalogues, magazines, and
other bulk mailings guarantees that there will be no more than a 3% error rate
on its mailing labels. A customer who contracted a mailing to 190,000
individuals experienced a return of 5,900 items, which had incorrect addresses.
Which of the following statements is true?
a. There is a 3% chance of an incorrect return.
b. There is a 0.0054 probability that a return of 5900 or more incorrect
addresses could occur if the true error rate is 3%.
c. There is a 0.4964 probability that a return of 5900 or more incorrect
addresses could occur if the true error rate is 3%.
d. There is a 2.69 percent possibility that a return of 5900 incorrect addresses
could occur if the true error rate is 3%.
e. None of these statements are correct.
ANS: B PTS: 1 OBJ: Section 7.4

29. In your college campus, 30% of the students use tobacco in some form. In
your statistics class of 40 students, the probability of finding at least 15 students
who use tobacco is:
a. 0.3051.
b. 0.1949.
c. 0.8051.
d. 0.1515.
e. 0.3485.
ANS: B PTS: 1 OBJ: Section 7.4

30. A zipper manufacturer has found that 1.5% of its zippers are defective. The
company averages 4982 zippers per day. The probability of finding between 90
and 100 defects in a given day is:
a. 0.4981.
b. 0.0310.
c. 0.0360.
d. 0.5310.
e. 0.4671.
ANS: B PTS: 1 OBJ: Section 7.4

31. Which of the following is not a correct statement?

a. The exponential distribution describes the Poisson process as a continuous
random variable.
b. The exponential distribution is a family of curves, which are completely
described by the mean.
c. The mean of the exponential distribution is the complement of the mean of
the Poisson.
d. The Poisson is a probability distribution or a discrete random variable while
the exponential distribution is continuous.
e. All of these are correct.
ANS: C PTS: 1 OBJ: Section 7.5

32. A local radio station maintains a very popular phone service, which provides
callers with current weather reports. The incoming calls have a Poisson
distribution with an average of 5 calls for each 15 minute-period. If x = time
between calls, then the probability of receiving four or fewer calls in the next 15
minutes is:
a. 0.2341.
b. 0.7659.
c. 0.2636.
d. 0.7364.
e. 0.9502.
ANS: D PTS: 1 OBJ: Section 7.5

33. A dispatcher for an airport shuttle averages sending a van to the airport 2
times every 60 minutes. The distribution is Poisson, and the driver must take a
15-minute lunch break. The probability that he can finish lunch before getting a
call is:
a. 0.1350.
b. 0.6065.
c. 0.3935.
d. 1.6490.
e. 0.8650.
ANS: C PTS: 1 OBJ: Section 7.5

34. A very large logging operation has serious problems keeping their skidders
operating properly. The equipment fails at the rate of 3 breakdowns every 48
hours. Assume that x is time between breakdowns and is exponentially
distributed. The probability of two or less breakdowns in the next 48-hour period
is:
a. 0.9672.
b. 0.0307.
c. 0.2231.
d. 0.7769.
ANS: B PTS: 1 OBJ: Section 7.5

35. If the mean of an exponential distribution is 2, then the value of the

parameter is:
a. 4.0.
b. 2.2.
c. 1.0.
d. 0.5.
ANS: D PTS: 1 OBJ: Section 7.5

36. If the random variable x is exponentially distributed with parameter = 4,

then P(x 0.25), up to 4 decimal places, is:
a. 0.6321.
b. 0.3679.
c. 0.2500.
d. 0.5000.
ANS: A PTS: 1 OBJ: Section 7.5

37. If the random variable x is exponentially distributed with parameter = 1.5,

then P(2 x 4), up to 4 decimal places, is:
a. 0.6667.
b. 0.0473.
c. 0.5000.
d. 0.2500.
ANS: B PTS: 1 OBJ: Section 7.5

38. Which of the following is not true for an exponential distribution with
parameter ?
a. Mean = .
b. Standard deviation = .
c. The distribution is completely determined once the value of is known.
d. The distribution is a two-parameter distribution since the mean and standard
deviation are equal.
ANS: D PTS: 1 OBJ: Section 7.5

39. Like the normal distribution, the exponential density function f(x):
a. is bell-shaped.
b. is symmetrical.
c. approaches infinity as x approaches zero.
d. approaches zero as x approaches infinity.
ANS: D PTS: 1 OBJ: Section 7.5

40. Which of the following distributions is suitable to model the length of time
that elapses before the first telephone call is received by a switchboard?
a. Exponential
b. Normal
c. Poisson
d. Binomial
e. Hypergeometric
ANS: A PTS: 1 OBJ: Section 7.5

41. The mean of the exponential distribution equals the mean of the Poisson
distribution only when the former distribution has a mean equals:
a. 1.00.
b. 0.50.
c. 0.25.
d. 2.00.
ANS: A PTS: 1 OBJ: Section 7.5

42. Which of the following distributions is appropriate to measure the length of

time between arrivals at a grocery checkout counter?
a. Binomial
b. Normal
c. Exponential
d. Poisson
e. Hypergeometric
ANS: C PTS: 1 OBJ: Section 7.5

43. Which of the following statements are true regarding the normal distribution
curve?
a. It is symmetrical.
b. It is bell-shaped.
c. It is asymptotic in that each end approaches the horizontal axis, but never
reaches it.
d. Its mean, median, and mode are located at the same position.
e. All of these statements are true.
ANS: E PTS: 1 OBJ: Section 7.7

NUMERIC RESPONSE

1. Assume x is normally distributed with mean = 15 and standard deviation = 3.

Use the approximate areas beneath the normal curve, as discussed in this
section, to find P(x 15).

ANS: 0.50

PTS: 1 OBJ: Section 7.2

2. Assume x is normally distributed with mean = 15 and standard deviation = 3.

Use the approximate areas beneath the normal curve, as discussed in this
section, to find P(12 x 18).

ANS: 0.683
PTS: 1 OBJ: Section 7.2

7. In 2000, the average charge of tax preparation was $95. Assuming a normal
distribution and a standard deviation of $10, use the approximate areas beneath
the normal curve, as discussed in this section, to answer: What proportion of tax
preparation fees were more than $95?

ANS: 0.50
PTS: 1 OBJ: Section 7.2

16. Assuming a standard normal distribution, determine P(z -0.75).

ANS: 0.2266

PTS: 1 OBJ: Section 7.3

34. A company sells toothpaste in a tube advertised to contain 8 ounces. The

tube filling process is set with a mean of 8.21 ounces. In this continuous
production process, the amount of toothpaste put in a tube is normally
distributed with a mean of 8.21 ounces and a standard deviation of 0.09 ounces.
If the actual capacity of the tubes used is 8.45 ounces, what proportion of the
tubes will be filled beyond capacity?

PTS: 1 OBJ: Section 7.4

55. A coin is flipped 14 times. Using the normal distribution, calculate the
probability of observing either 4, 5, or 6 heads.

ANS: 0.3629

PTS: 1 OBJ: Section 7.4

56. An efficiency expert makes periodic checks for weighting errors for a long
distance shipping firm. The expert inspects for errors in weighing, in recording
weights, and errors in processing the bills of lading. Based on past records, the
number of weekly errors for all shipments averages 5.30 with a standard
deviation of 1.23, and the frequency histogram approximates a normal
distribution. Suppose x is the number of weighing errors that will occur next
week. Compute the approximate probability for (x = 6).

ANS: 0.2729

PTS: 1 OBJ: Section 7.4

ANS: 0.5488
PTS: 1 OBJ: Section 7.5

61. In a paper mill, which produces newsprint from Southern Pine, the
production manager finds a flaw for each 1000 feet of newsprint. He knows that
the outcome is a Poisson process with a continuous distribution. A group of
visitors is touring the plant. After arriving at the final stage of production, if they
remain long enough to observe 330 feet of newsprint produced, what is the
probability that they will miss seeing the next defect?

ANS: 0.2811

PTS: 1 OBJ: Section 7.5

62. In 1997, private planes had 1.5 fatal crashes per 100 thousand flying hours.
For a continuous random variable with an exponential distribution: What is the
probability that the time between the next two crashes will fall between 50 and
70 thousands hours, i.e. P(50 x 70); x = thousands of flying hours between fatal
crashes.

ANS: 0.1224

PTS: 1 OBJ: Section 7.5

63. In 1997, private planes had 1.5 fatal crashes per 100 thousand flying hours.
Assume a continuous random variable with a exponential distribution. A national
association of private plane owners has 560 members who fly 1.5 million miles
each year. The mileage crash rate has been estimated to be 20 per 100 million
miles of air travel. What is the probability that the next crash by a member of
the association will not occur until more than one year from now?

ANS: 0.2592

PTS: 1 OBJ: Section 7.5

64. Grades for a statistics exam for a certain class follow the normal probability
distribution with a mean of 82 and a standard deviation of 12. What percentage
of the students in the class had a grade 81 or more?

ANS: 0.5319
PTS: 1 OBJ: Section 7.3

65. Grades for a statistics exam for a certain class follow the normal probability
distribution with a mean of 82 and a standard deviation of 12. What percentage
of the students in the class earned a C grade (70-79)?

ANS: 0.2426

PTS: 1 OBJ: Section 7.3

66. Grades for a statistics exam for a certain class follow the normal probability
distribution with a mean of 82 and a standard deviation of 12. What percentage
of the students in the class earned a B grade (80-89)?

ANS: 0.2865

PTS: 1 OBJ: Section 7.3

67. The time it takes a technician to fix a computer problem is exponentially

distributed with a mean of 15 minutes. What is the probability that it will take a
technician less than 10 minutes to fix a computer problem?

ANS: 0.4866

71. The total area beneath the curve of any continuous distribution is
____________________.

ANS: 1.0

PTS: 1 OBJ: Section 7.7

72. The probability that any continuous random variable x will take on any
specific value along an interval is ____________________.

ANS: 0.0

PTS: 1 OBJ: Section 7.7

COMPLETION

1. In the normal distribution, the total area under the curve is equal to
____________________.

ANS:
one
1
PTS: 1 OBJ: Section 7.2

2. In the normal distribution, the right half of the curve is a mirror image of the
_________________________, since the distribution is ____________________.

ANS: left half; symmetric

PTS: 1 OBJ: Section 7.2

3. If we ____________________ the normal curve, we express the original x values

in terms of their number of standard deviations away from the mean.

ANS: standardize

PTS: 1 OBJ: Section 7.3

4. The binomial distribution is symmetrical whenever the population proportion

is ____________________, and approaches symmetry for values that are close to
____________________.

ANS: 0.5; 0.5

PTS: 1 OBJ: Section 7.4

5. For a Poisson process, the ____________________ distribution describes the

continuous random variable x, where x is the amount of time, space, or distance
between occurrences of these rare events.

ANS: exponential

PTS: 1 OBJ: Section 7.5

SHORT ANSWER

1. In 2000, the average charge of tax preparation was $95. Assuming a normal
distribution and a standard deviation of $10, use the approximate areas beneath
the normal curve, as discussed in this section, to answer: What proportion of tax
preparation fees were exactly $100?

ANS:
P(x = 100) = 0
PTS: 1 OBJ: Section 7.2

2. If z is a standard normal random variable, find the value z1 for which:

A) P(0 z z1) = 0 .276

B) P(z z1) = 0.341

C) P(z z1) = 0.819

D) P(-z1 Z z1) = 0.785

ANS:
0.76; 0.41; -0.91; 1.24

PTS: 1 OBJ: Section 7.3

3. If x is a normal random variable with a mean of 100 and a standard deviation

of 10, find the following probabilities:

A) P(x 128)

B) P(x 113)

C) P(87 x 98)

ANS:
0.0026; 0.9032; 0.3239

PTS: 1 OBJ: Section 7.3

= 10. Sketch the approximate box-and-whisker plot for the resulting data. =
50 and standard deviation 4. A computer statistical package has simulated
1000 random observations from a normal distribution with mean

ANS:

PTS: 1 OBJ: Section 7.6

5. If a computer statistical package were to simulate 500 random observations

from a normal distribution with mean = 100 and standard deviation = 50, what
percentage of these observations would you expect to have a value of 200 or
more? Do you think the actual number in the ” 200″ range would equal the
expected number in this range? If so, why? If not, why not?

ANS:
2.28%; No. We would expect 11.4 of the 500 observations (2.28%) to have a
value of 200 or more. The actual number would not be equal to the expected
number. However, the more observations we select, the closer we will tend to
come to what we expect.

PTS: 1 OBJ: Section 7.6

6. Scores of high school students on a national mathematics exam in Egypt were

normally distributed with a mean of 86 and a standard deviation of 4.

A) What is the probability that a randomly selected student will have a score of
80 or higher?
B) If there were 97,680 students with scores higher than 91, how many students
took the test?

____________________ (Remove all commas from your answer before submitting).

ANS:
0.9332; 925000

PTS: 1 OBJ: Section 7.3

7. The time it takes a technician to fix a computer problem is exponentially

distributed with a mean of 15 minutes. What is the probability density function
for the time it takes a technician to fix a computer problem?

ANS:
0f(x) = (1/15) e-x/15, x

PTS: 1 OBJ: Section 7.5

8. What are the mean and standard deviation of a normally distributed random
variable, which has been “standardized”?

Mean = ____________________
SD = ____________________

ANS:
0.0; 1

PTS: 1 OBJ: Section 7.3

9. A certain brand of flood lamps has a lifetime that is normally distributed with
a mean of 3,750 hours and a standard deviation of 300 hours.

A). What proportion of these lamps will last for more than 4,000 hours?

B). What lifetime should the manufacturer advertise for these lamps in order
that only 2% of the lamps will burn out before the advertised lifetime?

____________________ hours (Remove all commas from your answer before

submitting).

ANS:
0.2033; 3132

PTS: 1 OBJ: Section 7.3

10. The normal distribution is a very good approximation to the binomial

distribution whenever ____________________ and ____________________ are 5.

ANS:
); n(1-n

PTS: 1 OBJ: Section 7.4

11. Complete the following table indicating which procedure to use in calculating
binomial probabilities:

PTS: 1 OBJ: Section 7.3

11. Why is it important to use the correction for continuity when approximating
binomial probabilities with the normal distribution?

ANS:
Because the binomial distribution has gaps between possible values of x (since
it is discrete), while the normal distribution is continuous, the normal
approximation to the binomial involves a correction for continuity. The correction
consists of expanding each possible value of the discrete random variable x by
0.5 in each direction.

PTS: 1 OBJ: Section 7.4

12. A continuous random variable x has the following probability density

function:

f(x) = 2e-2x , x 0

What is the distribution of the random variable x?

ANS:
Exponential distribution with = 2

PTS: 1 OBJ: Section 7.5

Chapter 8. Sampling
Distributions
Test Bank

TRUE/FALSE

1. True or False
Sample data are used as the basis from which to make probability statements
about the true (but unknown) value of the population mean or proportion.

ANS: T PTS: 1 OBJ: Section 8.1

2. True or False
The sampling distribution of the mean will be approximately normal regardless
of the distribution of the original population or the sample size.

ANS: F PTS: 1 OBJ: Section 8.2

3. True or False
The standard error for the sampling distribution of the mean is equal to .

ANS: T PTS: 1 OBJ: Section 8.3

4. True or False
The number of all possible simple random samples of size 2 that can be taken
from a population of 5 elements is 6.

ANS: T PTS: 1 OBJ: Section 8.3

MULTIPLE CHOICE

1. In a given year, the average annual salary of a NFL football player was
$189,000 with a standard deviation of $20,500. If a sample of 50 players was
taken, then probability that the sample mean will be $192,000 or more is:
a. 0.6970.
b. 0.3485.
c. 0.1515.
d. 0.0398.
e. 0.4602.
ANS: C PTS: 1 OBJ: Section 8.3

2. A manufacturing company packages peanuts for Piedmont Airlines. The

individual packages weigh 1.4 grams with a standard deviation of 0.6 grams. For
a flight of 152 passengers receiving the peanuts, the probability that the
average weight of the packages is less than 1.3 grams is:
a. 0.0202.
b. 0.2040.
c. 0.9798.
d. 0.4798.
e. 2.0500.
ANS: A PTS: 1 OBJ: Section 8.3

3. The standard error is:

a. the standard deviation of the sampling distribution.
b. the squared value of the population variance.
c. the same value as the population standard deviation.
d. is the same for distributions of all sample sizes.
e. is the mean of the sampling distribution
ANS: A PTS: 1 OBJ: Section 8.2

4. If all possible samples of size n are drawn from an infinite population with a
mean of and a standard deviation of , then the standard error of the sample
mean is inversely proportional to:
a. .
b. .
c. .
d. n.
ANS: B PTS: 1 OBJ: Section 8.3
5. The concept that allows us to draw conclusions about the population based
strictly on sample data without having any knowledge about the distribution of
the underlying population is
a. the central limit theorem.
b. the standard error of the mean.
c. the normal distribution.
d. the standard deviation.
e. the variance.
ANS: A PTS: 1 OBJ: Section 8.3

6. The average number of customers that visited a particular store during the
past year is 160 per day and a standard deviation of 25 customers per day. A
random sample of 64 days is chosen from this population. The standard
deviation of the sample mean equals:
a. 12.649.
b. 25.0.
c. 2.56.
d. 3.125.
e. 8.0
ANS: D PTS: 1 OBJ: Section 8.3

7. The average sales per customer at a home improvement store during the past
year is $75 with a standard deviation of $12. The probability that the average
sales per customer from a sample of 36 customers, taken at random from this
population, exceeds $78 is:
a. 0.4332.
b. 0.0668.
c. 0.0987.
d. 0.9013.
e. 0.5000
ANS: B PTS: 1 OBJ: Section 8.3

8. The average speed of cars passing a checkpoint is 60 miles per hour with a
standard deviation of 8 miles per hour. Fifty (50) passing cars are clocked at
random from this checkpoint. The probability that the sample mean will be
between 57 and 62 miles per hour is:
a. 0.9576.
b. 0.9960.
c. 0.2467.
d. 0.3520.
e. 0.4659
ANS: A PTS: 1 OBJ: Section 8.3

9. If all possible samples of size n are drawn from an infinite population with a
mean of 15 and a standard deviation of 5, then the standard error of the sample
mean equals 1.0 only for samples of size:
a. 5.
b. 15.
c. 25.
d. 75.
ANS: C PTS: 1 OBJ: Section 8.3

10. Each of the following are characteristics of the sampling distribution of the
mean except:
a. The sampling distribution of the mean has the same mean as the original
population.
b. The standard deviation of the sampling distribution of the mean is referred to
as the standard error.
c. If the original population is normally distributed, the sampling distribution of
the mean will also be normal.
d. If the original population is not normally distributed, the sampling distribution
of the mean will also be approximately normal for large sample sizes.
e. All of the above are characteristics of the sampling distribution of the mean.
ANS: E PTS: 1 OBJ: Section 8.2

11. A sample of size n is selected at random from an infinite population. As n

increases, which of the following statements is true?
a. The population standard deviation decreases
b. The standard error of the sample mean decreases
c. The population standard deviation increases
d. The standard error of the sample mean increases
e. The sample mean increases.
ANS: B PTS: 1 OBJ: Section 8.3

12. The Coca-Cola Company has 40% of the cola market. The probability that a
sample proportion for n = 30 falls within 0.10 of the true population proportion
of 0.40, which represents the proportion of cola drinkers who prefer a Coca-Cola
drink is:
a. 0.7372.
b. 0.3686.
c. 0.4599.
d. 0.9198.
e. not enough information given to make calculation.
ANS: A PTS: 1 OBJ: Section 8.4

13. Fifty percent of all college students attend schools within 50 miles of their
homes. In a sample of 500 college students, the probability that the sample
proportion will be between 0.45 and 0.55 is:
a. 0.4875.
b. 0.9818.
c. 0.4909.
d. 0.9750.
e. 0.5000.
ANS: D PTS: 1 OBJ: Section 8.4

14. Suppose an actual census showed that 18.4% of the households in California
have incomes in excess of $50,000. The probability that the sample proportion
will be 0.22 or greater for a random sample of 750 households is:
a. 0.0055.
b. 0.9945.
c. 0.9949.
d. 0.0041.
e. not enough information given for estimation.
ANS: A PTS: 1 OBJ: Section 8.4
15. In a simple random sample of 1,000 automobile owners between ages 25-
35, there were 142 owners of a Ford Explorer. If the expected number of owners
of this vehicle was 125 out of 1000, the values of p, and n are, respectively:
a. 125,142,1000.
b. 142,125,1000.
c. 0.142, 0.125, 1000.
d. 0.125, 0.142, 1000.
e. 0.142, 0.125, 1350.
ANS: D PTS: 1 OBJ: Section 8.4

16. As a general rule, the normal distribution is used to approximate the

sampling distribution of the sample proportion only if:
a. the sample size n is greater than or equal to 30.
b. the population proportion is close to 0.50.
c. the underlying population is normal.
d. n and n are both greater than or equal to 5.
ANS: D PTS: 1 OBJ: Section 8.4

17. Sixty percent of a company’s customers are females. What is the probability
that a random sample of 200 customers is greater than 64 percent female?
a. 0.1229
b. 0.1556
c. 0.1898
d. .02158
e. 0.2847
ANS: A PTS: 1 OBJ: Section 8.4

18. Historically, a company that mails its monthly catalog to potential customers
receives orders from 8 percent of the addresses. If 500 addresses are selected
randomly from the last mailing, what is the probability that between 35 and 50
orders were received from this sample?
a. 0.0496
b. 0.2049
c. 0.7444
d. 0.7951
e. 0.9504
ANS: C PTS: 1 OBJ: Section 8.4

19. The Coca-Cola Company has 40% of the cola market. Determine the
probability that a sample proportion for n = 30 is within 0.10 of the true
proportion of 0.40, which is the proportion of cola drinkers who prefer a Coca-
Cola drink. In this particular market, the population size of those who drink cola
is 50.
a. 0.7372
b. 0.3686
c. 0.4599
d. 0.9198
e. Not enough information given to make calculation.
ANS: D PTS: 1 OBJ: Section 8.5

20. Fifty percent of all college students attend schools within 50 miles of their
homes. In a sample of 500 college students from a city with 5000 college
students, what is the probability that the sample proportion will be between 0.45
and 0.55?
a. 0.4875
b. 0.9818
c. 0.4909
d. 0.9750
e. 0.5000
ANS: B PTS: 1 OBJ: Section 8.5

21. Suppose an actual census showed that 18.4% of the households in California
have incomes in excess of $50,000. What is the probability that the sample
proportion will be 0.22 or greater for a random sample of 750 households from a
city population which totals 10,000?
a. 0.0055
b. 0.9945
c. 0.9949
d. 0.0041
e. Not enough information given for estimation.
ANS: D PTS: 1 OBJ: Section 8.5

6. Your company is located in New York City and your job requires that you travel
by air to many other major cities such as Boston, Chicago, Los Angeles, Detroit,
Houston, Dallas, Atlanta, Denver, and Washington, DC. Your average round-trip
airfare for the past year has been $495 with a standard deviation of $240. If for
your next year’s planning budget you estimate your average air ticket between
$395 and $550, what is the probability that the mean, , of your next 36 flights
will fall in this range?
ANS: 0.9100

PTS: 1 OBJ: Section 8.3

7. A manufacturer of printers claims that their color cartridge will print an

average of 200 4-by-6 photos with a standard deviation of 60 photos. A random
sample of 40 customers counted the number of photos printed with one
cartridge. If the manufacturer’s claim is correct, what is the probability that the
average customer printed at least 210 pages with one cartridge?

ANS: 0.1469

PTS: 1 OBJ: Section 8.3

ANS: 0.1314

PTS: 1 OBJ: Section 8.3

14. The heights of men in the USA are normally distributed with a mean of 68
inches and a standard of 4 inches. What is the probability that the mean height
of a random sample of 35 men is greater than 70 inches?

ANS: 0.0015

PTS: 1 OBJ: Section 8.3

15. The amount of time spent by American adults playing sports per day is
normally distributed with a mean of 4 hours and standard deviation of 1.25
hours. Find the probability that a randomly selected American adult plays sports
for more than 5 hours per day.

ANS: 0.2119

PTS: 1 OBJ: Section 8.3

16. The amount of time spent by American adults playing sports per day is
normally distributed with a mean of 4 hours and standard deviation of 1.25
hours. Find the probability that if four American adults are randomly selected,
their average number of hours spent playing sports is more than 5 hours per
day.

ANS: 0.0548

PTS: 1 OBJ: Section 8.3

17. If young children watch an average of 105 minutes of TV per day with a
standard deviation of 30 minutes per day, what is the probability that a random
sample of 60 children will watch more than 110 minutes of TV per day?

ANS: 0.0985

PTS: 1 OBJ: Section 8.3

18. In a production of 1000 plastic moldings, 75 were incompletely formed and

had to be discarded. Based on these data the total production of plastic
moldings should have what estimated proportion of incompletely formed
moldings?

ANS: 0.075

PTS: 1 OBJ: Section 8.4

19. In an effort to identify the true proportion of shoplifters who are under age
18, a random sample of 300 shoplifting cases was taken. One hundred and
twenty of those cases involved persons under age 18. What value would be used
to estimate the true proportion of under age 18 shoplifters?

ANS: 0.40
PTS: 1 OBJ: Section 8.4

20. A videocassette rental store wants to know what proportion of its stock
should include the Beta format VCR. A random sample of the owners of VCRs is
suggested. Five hundred VCR owners are asked if they own the Beta or VHS
format. Out of 500 interviewed, 125 were owners of the Beta format. Presume
that the true population proportion of Beta format VCRs is = 0.32. What is the
probability that the sample proportion p will be within 0.04 of the true proportion
of Beta format ownership?

ANS: 0.9438

PTS: 1 OBJ: Section 8.4

21. A producer of a juice drink advertises that it contains 10% real fruit juices. A
sample of 75 bottles of the drink is analyzed and the percent of real fruit juices
is found to be 6.5%. If the true proportion is actually 0.10, what is the probability
that the sample percent will be 6.5% or less?

ANS: 0.1562

PTS: 1 OBJ: Section 8.4

22. The Sunbelt City Peewee baseball organization has ordered 48 dozen balls
from the Liteflite Company for use in its summer program. The company has
guaranteed a 10% discount on the total cost if 32 or more of the balls are
defective. Experience in the past has shown 5% defects. A sample of 50 balls
will be taken, and the discount will be given if the sample proportion of defective
balls is at least 32 in 48 dozen. What is the probability that the organization will
get the 10% discount?

NARRBEGIN: Vehicles
Four families live on a cul-de-sac represent a very small population. The number
of vehicles owned by each family is shown below:
NARREND
35. Calculate the population mean.

ANS: 1.75

PTS: 1 OBJ: Section 8.7

36. Calculate the population standard deviation.

ANS: 0.8292

PTS: 1 OBJ: Section 8.7

37. Assume that all possible simple random samples of size two are taken from
this population, and that the original population is normally distributed. Apply
the Central Limit Theorem to find the mean of the sampling distribution of
sample means.

ANS: 1.75

PTS: 1 OBJ: Section 8.7

38. Assume that all possible simple random samples of size two are taken from
this population, and that the original population is normally distributed. Apply
the Central Limit Theorem to find the standard error of the sampling distribution
of sample means.

ANS: 0.4787

PTS: 1 OBJ: Section 8.7

39. List all possible simple random samples of size two that can be taken from
this population and determine the mean number of vehicles for each sample.

ANS:

Sample Sample mean

Ali, Brown 1.0
Ali, Cosby 1.5
Ali, Davis 2.0
Brown, Cosby 1.5
Brown, Davis 2.0
Cosby, Davis 2.5
PTS: 1 OBJ: Section 8.7

40. Calculate the mean of the sample means.

ANS: 1.75

PTS: 1 OBJ: Section 8.7

41. Calculate the standard deviation of the sample means.

ANS: 0.4787

PTS: 1 OBJ: Section 8.7

COMPLETION

1. Using information from a sample to reach conclusions about the population

from which it was drawn is referred to as ____________________.

ANS: inferential statistics

PTS: 1 OBJ: Section 8.1

2. The standard deviation of the sampling distribution of the mean is referred to

as the ____________________.

ANS: standard error of the mean

PTS: 1 OBJ: Section 8.2

3. If the original population from which the samples were drawn is not normally
distributed, then the sampling distribution of the mean will be
____________________ for large sample sizes.

ANS: approximately normal

PTS: 1 OBJ: Section 8.2

4. When a great many simple random samples of size n are drawn from a
population that is normally distributed, the sampling distribution of the sample
means will be ____________________ regardless of sample size n. As n increases,
the ____________________ of the sample distribution will become smaller.

ANS: normal; standard error

PTS: 1 OBJ: Section 8.3

SHORT ANSWER

NARRBEGIN: Pets

NARREND
1. Determine the probability distribution for the discrete random variable, x =
number of pets owned.

ANS:
x1234
P(x) .2 .4 .2 .2
PTS: 1 OBJ: Section 8.2

2. Calculate the population mean and standard deviation.

Mean = ____________________

SD = ____________________

ANS:
2.4; 1.0198

PTS: 1 OBJ: Section 8.2

3. List all possible samples of size n = 2 from the five individuals and determine
the mean for each sample.

ANS:

Sample Mean Number of Pets owned

Abby, Brenda 1.5
Abby, Carol 2.5
Abby, David 3.0
Abby, Ed 2.0
Brenda, Carol 2.0
Brenda, David 2.5
Brenda, Ed 1.5
Carol, David 3.5
Carol, Ed 2.5
David, Ed 3.0
PTS: 1 OBJ: Section 8.2

4. Find the mean and standard deviation of the sampling distribution of the
mean.

Mean = ____________________

SD = ____________________
ANS:

PTS: 1 OBJ: Section 8.2

5. A sample of size 400 is drawn from a population whose mean and variance
are 5,000 and 10,000, respectively. Find the following probabilities:

A) ____________________

B) ____________________

C) ____________________

ANS:
0.0228; 0.8185; 0.00

PTS: 1 OBJ: Section 8.3

6. A sample of 50 observations is drawn at random from a normal population

whose mean and standard deviation are 75 and 6, respectively.

A) What does the central limit theorem say about the sampling distribution of
the sample mean? Why?

B) Find the mean and standard error of the sampling distribution of the sample
mean.

Mean = ____________________

SD = ____________________

ANS:
is normally distributed because the parent population is normal.; 75; 0.8485;
0.9909; 0.1190

PTS: 1 OBJ: Section 8.3

7. In opposing the establishment of a new bank in a community an existing bank
stated that the area to be served by the proposed bank contained 75 percent of
its accounts. An economic consulting firm randomly sampled the households to
determine the sample proportion, p, which had accounts at the existing bank.
The sample size was 225. Find the probability that p is:

A) Less than 69 percent.

B) More than 78 percent.

C) Within 0.05 of the true proportion stated as 0.75.

ANS:
0.0188; 0.1492; 0.9164

PTS: 1 OBJ: Section 8.4

8. Complete this equation:

Answer 1: ____________________

Answer 2: ____________________

ANS:
Number of trials; x

PTS: 1 OBJ: Section 8.4

9. A firm claims that only 10% of its accounts receivables are over 30 days past
due. The bank that supplies working capital or interim loans to the firm is
suspect of the figure and accordingly takes a random sample of 100 accounts of
the firm. Find the probability that the sample proportion, p, will be:

A) between 9 and 10%.

C) n = 100; = 0.05

D) n = 100; = 0.99

ANS:
Rule is not satisfied; Rule is satisfied; Rule is satisfied; Rule is not satisfied

PTS: 1 OBJ: Section 8.4

14. A simple random sample of 300 observations is taken from a population

whose proportion = 0.6.

A) What is the expected value of the sample proportion p?

B) What is the standard error of the sample proportion p?

C) What is the probability that the sample proportion p will be within 0.02 of the
population proportion ?
ANS:
0.6000; 0.0283; 0.5222

PTS: 1 OBJ: Section 8.4

15. The chairman of a statistics department in a certain college believes that

70% of the department’s graduate assistantships are given to international
students. A random sample of 50 graduate assistants is taken. Assume that the
chairman is correct and that = 0.70. What is the sampling distribution of the
sample proportion p? Explain.

ANS:
Approximately normal, since n*pi = 35 and n(1- pi) = 15 are both greater than
5.

PTS: 1 OBJ: Section 8.4

16. The chairman of a statistics department in a certain college believes that

70% of the department’s graduate assistantships are given to international
students. A random sample of 50 graduate assistants is taken. Assume that the
chairman is correct and that = 0.70. Find the expected value and the standard
error of the sampling distribution of p.

E(p):

SE:

ANS:
0.70; 0.0648

PTS: 1 OBJ: Section 8.4

17. Determine which of the following population size and sample size
combinations would require the use of the finite population correction factor in
calculating the standard error.

A) N = 150; n = 25

B) N = 1500; n = 300

C) N = 2500; n = 75

D) N = 15,000; n = 1000

ANS:
Yes; Yes; No; Yes

PTS: 1 OBJ: Section 8.5

18. In order to estimate the mean salary for a population of 500 employees, the
president of a certain company selected at random a sample of 40 employees.
Would you use the finite population correction factor in calculating the standard
error of the sample mean? Explain.

ANS:
Yes; n/N = 0.08 > 0.05; therefore, the finite population correction factor is
necessary.

PTS: 1 OBJ: Section 8.5

19. In order to estimate the mean salary for a population of 500 employees, the
president of a certain company selected at random a sample of 40 employees. If
the population standard deviation is $800, compute the standard error both with
and without using the finite population correction factor.

With correction factor:

Without correction factor:

26. Determine the sampling distribution of for all possible samples of 2 families
that can be selected without replacement from this population and calculate the
mean and standard deviation of .

ANS:

1.5 2.0 2.5 3.0 3.5

p( ) 1/6 1/6 2/6 1/6 1/6

PTS: 1 OBJ: Section 8.7

ESSAY

1. Briefly, what is the difference between a probability distribution and a

sampling distribution?

ANS:
The sampling distribution of a statistic is a probability distribution of the sample
statistic (such as or p) for all possible samples of that particular size. Therefore,
a sampling distribution is a probability distribution. It is for a statistic (which is a
random variable) with a sample size specified.

PTS: 1 OBJ: Section 8.2

2. Briefly, what is the difference between a standard deviation and a standard

error?
ANS:
The standard deviation of the sampling distribution of a statistic (such as or p) is
referred to as the standard error of the sample statistic.

PTS: 1 OBJ: Section 8.2

3. State the central limit theorem.

ANS:
For large, simple random samples from a population that is not normally
distributed, the sampling distribution of the mean will be approximately normal,
with the mean , and the standard deviation . As the sample size (n) is increased,
the sampling distribution of the mean will more closely approach the normal
distribution.

PTS: 1 OBJ: Section 8.3

4. Why is the central limit theorem basic to the concept of statistical inference?

ANS:
Because it permits us to draw conclusions about the population based strictly on
sample data, and without having any knowledge about the distribution of the
underlying population.

PTS: 1 OBJ: Section 8.3

Chapter 9. Estimation from

Sample Data
Test Bank

TRUE/FALSE

1. True or False
A confidence interval will allow us to say with complete certainty that our
sample result will actually include the population mean.

ANS: F PTS: 1 OBJ: Section 9.3

2. True or False
If the population mean and population standard deviation are both known and a
sample size that is greater than 30, one can invoke the central limit theorem
and make probability statements about the means of samples taken from the
population.

ANS: T PTS: 1 OBJ: Section 9.1

3. True or False
An estimator is unbiased if the expected value of the sample statistic is the
same as the actual value of the population parameter it is intended to estimate.

ANS: T PTS: 1 OBJ: Section 9.2

4. True or False
If the population mean is unknown, one can use sample data as the basis from
which to make probability statements about the true (but unknown) value of .

ANS: T PTS: 1 OBJ: Section 9.1

5. True or False
Whenever sample data are used for estimating a population mean or proportion,
sampling error will not be present, since the observed sample statistic ( or p) will
not differ from the actual value of the population parameter ( or ).

ANS: F PTS: 1 OBJ: Section 9.1

6. True or False
The sample statistic s is an unbiased estimator of the population parameter
when (n – 1) is used as a divisor when we calculate the standard deviation of the
sample.

ANS: F PTS: 1 OBJ: Section 9.2

7. True or False
A 0.95 confidence coefficient is equivalent to a 5% confidence level.

ANS: F PTS: 1 OBJ: Section 9.3

8. True or False
A confidence interval is an estimate for which there is a specified degree of
certainty that the population parameter will be in the interval.

If a sample has 16 observations and a 95% confidence estimate for is needed,
the appropriate t-score is 1.746.

ANS: F PTS: 1 OBJ: Section 9.5

16. True or False

If a sample has 16 observations from a normal population and a 90% confidence
estimate for is needed, the appropriate t-score is 2.12.

ANS: F PTS: 1 OBJ: Section 9.5

17. True or False

A 95% confidence interval means that there is a 95% probability that the
interval will include the true population mean.

ANS: F PTS: 1 OBJ: Section 9.4

18. True or False

The Student’s t distribution has a mean of zero and the shape is determined by
the number of degrees of freedom.

ANS: T PTS: 1 OBJ: Section 9.5

19. True or False

If we want to cut the maximum likely error in half, we will have to double the
sample size.

ANS: F PTS: 1 OBJ: Section 9.7

20. True or False

In determining the necessary sample size in making an interval estimate for a
population mean, it is necessary to first make an estimate of the population
standard deviation.

ANS: T PTS: 1 OBJ: Section 9.7

21.
True or False
The finite population correction factor should be employed in determining
confidence intervals and calculating required sample size whenever the sample
size n is at least 5% as large as the population size N; that is, n .05N.

ANS: T PTS: 1 OBJ: Section 9.8

22. True or False

The finite population correction factor will lead to a wider confidence interval
than if an infinite population had been assumed.

ANS: F PTS: 1 OBJ: Section 9.8

23. True or False

The technique used to determine a confidence interval to estimate a population
proportion uses the normal distribution as an approximation to the Poisson
distribution.

ANS: F PTS: 1 OBJ: Section 9.6

24. True or False

The appropriate procedure for constructing an interval estimate for the
population mean depends largely on whether the population standard deviation
is known.

ANS: T PTS: 1 OBJ: Section 9.9

25. True or False

Since the t-interval is often associated with interval estimates based on small
samples, it is not appropriate for large samples.

ANS: F PTS: 1 OBJ: Section 9.9

26. True or False

Accuracy, or sampling error, is equal to one-half of the confidence interval width.

ANS: T PTS: 1 OBJ: Section 9.9

27. True or False
To use the normal approximation to determine a confidence interval to estimate
a population proportion, np and n(1-p) must both be greater than or equal to 5.

ANS: T PTS: 1 OBJ: Section 9.6

28. True or False

In determining the necessary sample size in making an interval estimate for a
population mean, it is necessary to decide on the maximum likely error that is
acceptable.

ANS: T PTS: 1 OBJ: Section 9.7

MULTIPLE CHOICE

1. Inferential statistics is the:

a. process of using a population parameter to estimate the values for sample
statistics.
b. process of using sample statistics to estimate population parameters.
c. process which allows the researcher to determine the exact values for
population parameters.
d. process that eliminates the problem of sampling error.
e. branch of statistics involving using population parameters to estimate
sampling distributions.
ANS: B PTS: 1 OBJ: Section 9.1

2. Which of the following statements are correct?

a. A point estimate is an estimate of the range of a population parameter.
b. A point estimate is a single value estimate of the value of a population
parameter.
c. A point estimate is an unbiased estimator if its standard deviation is the same
as the actual value of the population standard deviation.
d. All of these statements are correct.
e. None of these statements is correct.
ANS: B PTS: 1 OBJ: Section 9.2
3. An unbiased estimator is:
a. any sample statistic used to approximate a population parameter.
b. a sample statistic, which has an expected value equal to the value of the
population parameter.
c. a sample statistic, which is usually less than the population parameter.
d. represented by a sample mean, the sample proportion, the sample variance,
and the sample standard deviation.
e. any standard error of the mean or standard error of the proportion.
ANS: B PTS: 1 OBJ: Section 9.2

4. An interval estimate is defined as:

a. the average of the sample values.
b. the range of the sample values.
c. the range of values that are likely to include the actual population parameter.
d. the range of values that are likely to include the actual sample statistic.
e. the population standard deviation.
ANS: C PTS: 1 OBJ: Section 9.1

5. Thirty-six months were randomly sampled and the discount rate on new
issues of 91-day Treasury Bills was collected. The sample mean is 4.76% and the
standard deviation is 171.21. What is the unbiased estimate for the mean of the
population?
a. 29312.86
b. 13.0847
c. 0.0476
d. 4.76%
e. 8.1496
ANS: D PTS: 1 OBJ: Section 9.2

6. A federal auditor for nationally chartered banks from a random sample of 100
accounts found that the average demand deposit balance at the First National
Bank of small town was $549.82. If the auditor needed a point estimate for the
population mean for all accounts at this bank, what would she use?
a. The average of $54.98 for this sample.
b. The average of $549.82 for this sample.
c. There is no acceptable value available.
d. She would survey the total of all accounts and determine the mean.
e. Not enough information is given to answer this question.
ANS: B PTS: 1 OBJ: Section 9.2

7. The sample variance s 2 is an unbiased estimator of the population variance

when the denominator of s 2 is:
a. n + 2.
b. n + 1.
c. n.
d. n – 1.
ANS: D PTS: 1 OBJ: Section 9.2

8. Which of the following statements are correct?

a. A confidence level expresses the degree of certainty that an interval will
include the actual value of the population parameter.
b. A confidence level expresses the degree of certainty that a point estimate will
include the actual value of the population parameter.
c. A confidence level expresses the degree of certainty that an interval will
include the actual value of the sample statistic.
d. A confidence level expresses the degree of certainty that a point estimate will
include the actual value of the sample statistic.
e. None of these statements is correct.
ANS: A PTS: 1 OBJ: Section 9.3

9. A confidence interval is defined as:

a. a point estimate plus or minus a specific level of confidence.
b. a lower and upper confidence limit associated with a specific level of
confidence.
c. an interval that has a 95% probability of containing the population parameter.
d. a lower and upper confidence limit that has a 95% probability of containing
the population parameter.
e. the difference between the observed sample statistic and the actual value of
the population parameter being estimated.
ANS: B PTS: 1 OBJ: Section 9.3
10. A production manager is concerned with the average weight of metal ingots.
From past data, she knows that is 1.6 lbs. The manager wishes to make a 95%
interval estimate for using a sample of 64 ingots. The accuracy of this sample in
estimating the population mean will be:
a. 0.20.
b. 0.392
c. 1.96.
d. 1.6.
e. 0.05.
ANS: B PTS: 1 OBJ: Section 9.4

11. A sample of 32 orders for a home shopping channel has an average of

$78.25. The standard deviation for all orders (the population) is $37.50. A 90%
confidence interval around this sample mean would be:
a.
b.
c.
d. .
e. .
ANS: B PTS: 1 OBJ: Section 9.4

12. In developing an interval estimate for a population mean, the population

standard deviation was assumed to be 10. The interval estimate was 50.92 2.14.
Had equaled 20, the interval estimate would be:
a. 60.92 2.14.
b. 50.92 12.14.
c. 101.84 4.28.
d. 50.92 4.28.
ANS: D PTS: 1 OBJ: Section 9.4

13. In developing an interval estimate for a population mean, a sample of 50

observations was used. The interval estimate was 19.76 1.32. Had the sample
size been 200 instead of 50, the interval estimate would have been:
a. 19.76 .33.
b. 19.76 .66.
c. 9.88 1.32.
d. 4.94 1.32.
ANS: B PTS: 1 OBJ: Section 9.4

14. A 98% confidence interval estimate for a population mean is determined to

be 75.38 to 86.52. If the confidence level is reduced to 90%, the confidence
interval for :
a. Becomes wider.
b. Remains the same.
c. Becomes narrower.
d. None of these answers is correct.
ANS: C PTS: 1 OBJ: Section 9.4

15. An auditor for a large oil corporation has taken a random sample of monthly
credit card charges for 32 individual (non-corporate) accounts. She found a
mean of $81.76. Assume that the population standard deviation is 48.2. A 98%
confidence interval estimate for the population mean of individual credit card
charges would be:
a. 81.76 19.89.
b. 81.76 16.72.
c. 81.76 112.94.
d. 81.76 22.0.
e. 81.76 2.33.
ANS: A PTS: 1 OBJ: Section 9.4

16. Delivery time by courier services is important to stock brokers. One such
firm wishes to estimate the average time taken by couriers delivering negotiable
securities in New York City. Specifically, the firm randomly samples 36 courier
pickup and delivery times. The collected data, in minutes, represent the time
between pickup and delivery. Suppose the population standard deviation is 0.3
minutes and the sample mean is 9.975. Find the sample mean and compute. A
90-percent confidence interval for the true mean delivery time, is:
a. 9.852 to 10.05.
b. 119.60 to 119.80.
c. 119.62 to 119.78.
d. 119.26 to 119.87.
e. 9.893 to 10.057.
ANS: E PTS: 1 OBJ: Section 9.4

17. Your statistics instructor wants you to determine a confidence interval

estimate for the mean test score for the next exam. In the past, the test scores
have been normally distributed with a mean of 74.2 and a standard deviation of
30.9. A 95% confidence interval estimate if your class has 30 students is:
a. 68.72 to 79.68.
b. 13.64 to 134.76.
c. 64.92 to 83.48.
d. 62.66 to 85.73.
e. 63.14 to 85.26.
ANS: E PTS: 1 OBJ: Section 9.4

18. The owner of a large shopping center is besieged with complaints

concerning the shortage of parking space. He feels that the 1000 spaces are
adequate. In an effort to address the problem, he obtains a sample of the
average number of cars on the parking lot during prime hours. The sample of 40
has a mean of 952. Assume a population standard deviation of 396. The 95%
confidence interval estimate for prime hour parking is:
a. 889.36 to 932.60.
b. 932.60 to 971.40.
c. 829.28 to 1074.72.
d. 849.00 to 1054.99.
e. 952.00 to 1052.00.
ANS: C PTS: 1 OBJ: Section 9.4

19. The national sales manager of Fast Grow Corp is working on next year’s
budget projections. He knows that the population standard deviation is $17.66.
To estimate the daily per diem cost for outside sales people, he has taken a
random sample of 36 individual expense accounts and found a mean of $90.29.
The 91.08 percent confidence interval for the per diem expense is:
a. 86.45 to 94.13.
b. 60.27 to 120.37.
c. 85.29 to 95.29.
d. 74.43 to 107.9.
e. 84.32 to 96.26.
ANS: C PTS: 1 OBJ: Section 9.4

20. The security department of a state university is planning its budget for the
next year. In estimating the man-hours for security during university sponsored
music concerts, the average length of music concerts is needed. A random
sample from thirty-six security departments at universities was taken and the
sample mean length of concerts was 160 minutes. Suppose the population
standard deviation is 45 minutes. A 95 percent confidence interval for the true
mean duration of music concerts is:
a. 157.55 to 162.45.
b. 147.63 to 172.37.
c. 71.8 to 248.2.
d. 145.3 to 174.7.
e. 160 1.96(45 / 36).
ANS: D PTS: 1 OBJ: Section 9.4

21. In the formula , the subscript refers to the:

a. probability that the confidence interval will contain the population mean.
b. probability that the confidence interval will not contain the population mean.
c. area in the lower tail or upper tail of the sampling distribution of the sample
mean.
d. level of confidence.
e. sampling error.
ANS: C PTS: 1 OBJ: Section 9.4

22. The larger the level of confidence used in constructing a confidence interval
estimate of the population mean the:
a. smaller the probability that the confidence interval will contain the population
mean.
b. smaller the value of .
c. wider the confidence interval.
d. narrower the confidence interval.
ANS: C PTS: 1 OBJ: Section 9.4

23. If a sample containing 20 observations is taken from a normally distributed

population and a 90% confidence estimate for is needed, the appropriate t-score
is:
a. 2.12.
b. 1.746.
c. 2.131.
d. 1.729.
e. 2.602.
ANS: D PTS: 1 OBJ: Section 9.5

24. If a sample containing 30 observations is taken from a normally distributed

population and a 98% confidence estimate for is needed, the appropriate t-score
is:
a. 2.247.
b. 2.756.
c. 2.462.
d. 2.750.
e. 2.330.
ANS: C PTS: 1 OBJ: Section 9.5

25. If a sample containing 12 observations is taken from a normally distributed

population and a 99% confidence estimate for is needed, the appropriate t-score
is:
a. 2.681.
b. 2.718.
c. 3.169.
d. 3.055.
e. 3.106.
ANS: E PTS: 1 OBJ: Section 9.5

26. The t-distribution approaches the normal distribution as the:

a. degrees of freedom increase.
b. degrees of freedom decrease.
c. sample size decreases.
d. population size increases.
ANS: A PTS: 1 OBJ: Section 9.5

27. A sample of 200 light bulbs was tested and it was found that 11 were
defective. Calculate a 95% confidence interval around this sample proportion.
a.
b.
c.
d.
e.
ANS: C PTS: 1 OBJ: Section 9.6

28. In an effort to estimate the proportion of female shoppers at a particular

store, 175 customers were randomly selected, of which 110 were female. Which
of the following would represent a 90% confidence interval around this sample
proportion?
a.
b.
c.
d.
e.
ANS: E PTS: 1 OBJ: Section 9.6

29. A total of 150 households were asked if they had Internet access, of which
57 responded “Yes”. Which of the following would represent a 98% confidence
interval around this sample proportion?
a.
b.
c.
d.
e.
ANS: B PTS: 1 OBJ: Section 9.6
30. In order to estimate the average daily down time, a manufacturer randomly
samples 40 days of production records and found a mean of 55.576 minutes and
standard deviation of 77.9 minutes. An 80% confidence interval is:
a. 55.675 1.28(12.32).
b. 55.675 1.304(12.32).
c. 55.675 1.28(77.9).
d. 55.675 1.304(77.9).
ANS: B PTS: 1 OBJ: Section 9.5

31. For a sample of size 20 taken from a normally distributed population with
standard deviation equal to 5, a 90% confidence interval for the population
mean would require the use of:
a. t = 1.328.
b. t = 1.729.
c. z = 1.96.
d. z = 1.645.
ANS: D PTS: 1 OBJ: Section 9.5

32. A random sample of size 15 taken from a normally distributed population

revealed a sample mean of 75 and a sample variance of 25. The upper limit of a
95% confidence interval for the population mean would equal:
a. 77.769.
b. 72.231.
c. 72.727.
d. 77.273.
ANS: A PTS: 1 OBJ: Section 9.5

33. The lower limit of a confidence interval at the 95% level of confidence for
the population proportion if a sample of size 200 had 40 successes is:
a. 0.2554.
b. 0.1446.
c. 0.2465.
d. 0.1535.
ANS: B PTS: 1 OBJ: Section 9.6
34. You are interested in determining the average cost of a 3-minute telephone
call to locations within the continental U.S. What sample size must you take to
be 96% confident that the results will be within $.75 of the true mean cost per
call? From the phone company, you have gotten an estimate of = 7.71.
a. 185
b. 445
c. 406
d. 574
e. 22
ANS: B PTS: 1 OBJ: Section 9.7

35. Because of the popularity of movies as an entertainment medium for college

students, you plan to do a national study of the average cost of a movie ticket. If
you assume that = $0.50, what sample size would you have to take to be 95%
confident that your estimate was within $0.25 of the true mean ticket prices?
a. 15
b. 7
c. 8
d. 4
e. 16
ANS: E PTS: 1 OBJ: Section 9.7

36. The banking industry has suffered in recent years because of a high default
rate on energy-related loans. The standard deviation is $10,000. How large a
sample must you take from banking records to be 98% confident that your
estimate for the amount of these defaults is within $1000 of the true mean loan
amount?
a. 567
b. 233
c. 240
d. 543
e. 890
ANS: D PTS: 1 OBJ: Section 9.7
37. The Arkansas State Police wish to estimate the average mph being traveled
on the Interstate Highways, which cross the state. If the estimate is to be within
8 mpg of the true mean with 98% confidence and the estimated standard
deviation is 22 mph, how large a sample size must be taken?
a. 42
b. 15
c. 329
d. 14
e. 41
ANS: A PTS: 1 OBJ: Section 9.7

38. The Ford Motor Company is interested in consumer acceptance of its

subcompact car based on the proportion of positive responses to a survey. How
large a survey must the company take to have 95% confidence and no more
than 0.01 error?
a. 19208
b. 9604
c. 49
d. 4900
e. 9603
ANS: B PTS: 1 OBJ: Section 9.7

39. Your state is considering raising the legal age for consumption of alcoholic
beverages to 21 years old. How large a sample size must be taken to make an
estimate of the true proportion of citizens who favor this move. The error should
be no more than 0.01 with 99% confidence.
a. 167
b. 16641
c. 6450
d. 65
e. 1670
ANS: B PTS: 1 OBJ: Section 9.7

40. After calculating the sample size needed to estimate a population proportion
to within .04, your statistics professor told you the maximum allowable error
must be reduced to just .01. If the original calculation led to a sample size of
800, the sample size will now have to be:
a. 800.
b. 3200.
c. 12,800.
d. 6400.
ANS: C PTS: 1 OBJ: Section 9.7

41. Which of the following is not a part of the formula for constructing a
confidence interval estimate of the population mean?
a. A point estimate of the population mean
b. The standard error of the sampling distribution of the sample mean
c. The confidence level
d. The value of the population mean
e. The sample size
ANS: D PTS: 1 OBJ: Section 9.9

NUMERIC RESPONSE

1. A fund raiser for United Way wants to know the average annual income of
workers in a very large vegetable processing plant. She is able to obtain a
sample of 30 annual wage levels (in thousands). She finds that the summation
of the wages for the 30 is 370.7 and the standard deviation of 3.3. What
estimate may be used for ?

ANS: 12.36

PTS: 1 OBJ: Section 9.2

2. A simple random sample of 10 students is selected from a large college. For

the 10 students, the number of days each was absent during the last semester
was to be 3, 7, 2, 1, 0, 2, 4, 2, 6, and 2. What is the point estimate for the mean
number of days absent for the college’s students?

ANS: 2.9

PTS: 1 OBJ: Section 9.2

3. A simple random sample of 10 students is selected from a large college. For
the 10 students, the number of days each was absent during the last semester
was to be 3, 7, 2, 1, 0, 2, 4, 2, 6, and 2. What is the point estimate for , the
variance of the number of days absent for the college’s students?

ANS: 4.767

PTS: 1 OBJ: Section 9.2

4. A simple random sample of 10 students is selected from a large college. For

the 10 students, the number of days each was absent during the last semester
was to be 3, 7, 2, 1, 0, 2, 4, 2, 6, and 2. What is the point estimate for , the
standard deviation of the number of days absent for the college’s students?

ANS: 2.183

PTS: 1 OBJ: Section 9.2

5. In surveying a simple random sample of 1000 assistant professors, we found

that 573 of them felt they were underpaid by at least $3500. Based on these
results, we have a 95% confidence that the proportion of the population of
assistant professors who share this sentiment is between .548 and .598.

Identify the point estimate of the population proportion.

ANS: 0.573

PTS: 1 OBJ: Section 9.3

6. In surveying a simple random sample of 1000 assistant professors, we found

that 573 of them felt they were underpaid by at least $3500. Based on these
results, we have a 90% confidence that the proportion of the population of
assistant professors who share this sentiment is between .548 and .598.

Identify the accuracy of the sample result.

The sample proportion would not differ from the actual population proportion by
more than:

ANS: 0.025
PTS: 1 OBJ: Section 9.3

7. A cost accountant wished to establish the average amount, , spent by

executives per day on travel and lodging. Then a comparison, between the
average and the amount turned in to be reimbursed, will be made and
unreasonably high or low expense amounts audited. A random sample of 50
executive expense receipts is taken. The average in the sample was $208. From
a similar survey the standard deviation of the amounts is approximately = $29.
The accountant prepares a 90-percent confidence level for . What is its
maximum error?

ANS: $6.75

PTS: 1 OBJ: Section 9.4

8. A large bank in a metropolitan area has a large number of secured loans on

apartment facilities throughout the area. Local economic indicators suggest the
percentage of vacant apartments ranges from 7% to 10%. Concerned about the
borrowers’ ability to meet loan obligations on time the bank decides to sample
from the apartments used to secure loans. The officer responsible for the sample
decides to allow a maximum error of the estimate of 0.01 with 99 percent
confidence. The officer wishes to take a sample large enough to cover all
proportions within the estimated vacancy range. Compute the sample size
needed for this study.

ANS: 5973

PTS: 1 OBJ: Section 9.7

9. Coffee for breakfast in the 1960’s was a commonplace method of becoming

more alert for classes among college students. However, coffee makers have
seen a decline in U.S. coffee consumption and are obviously concerned about it.
One coffee maker decides to estimate the proportion of college students (likely
candidates for coffee) who drink coffee for breakfast nationally. The proportion
of the total population who drink coffee for breakfast is about 0.55. The coffee
maker decides to use 0.55 as the value for p in determining the sample size to
select from among college students. A 92% confidence interval is chosen and
the estimate, p, is to be within 0.05 of the true proportion of college students
who drink coffee for breakfast. Compute the needed sample size.

ANS: 304

PTS: 1 OBJ: Section 9.7

10. An auditor wishes to take a sample to verify the accounts receivable

balances for a very large corporation. From past history, he knows that is
$102.49. What sample size must be taken to be 99% confident that the estimate
will be within $5 of the true mean account balance?

ANS: 2789

PTS: 1 OBJ: Section 9.7

11. An auditor wishes to take a sample to verify the accounts receivable

balances for a company having 500 accounts. From past history, he knows that
is $102.49. What sample size must be taken to be 99% confident that the
estimate will be within $10 of the true mean account balance?

ANS: 292

PTS: 1 OBJ: Section 9.8

12. A medical records manager would like to review hospital records in order to
determine the average hospital stay for surgery patients during the past year.
What sample size must be taken in order to be 95% confident that the estimate
is within 1 day of the true mean? She has past studies, which indicate that is
20.25 days.

ANS: 1576

homes receiving both HBO and ShowTime cable service. The class plans to use a
confidence coefficient of 0.95 and a maximum error of the estimate equal to
0.10. Determine the sample size for the class to use.

ANS: 97

PTS: 1 OBJ: Section 9.7

20. A marketing class is engaged in a project to estimate the proportion of

ANS: 93

PTS: 1 OBJ: Section 9.8

21. Texas passed a law requiring drivers and passengers in the front seat to
wear seat belts. In order to estimate the compliance with the law an unmarked
car will operate in a selected county and the officer will observe whether or not
seat belts are in use. The proportion complying, , in the county is to be
estimated by randomly selecting the cars to examine. A confidence coefficient
of 0.98 is desired with the estimate, p, to be within 0.05 of the true proportion.
How many cars are needed in this sample?

ANS: 542

PTS: 1 OBJ: Section 9.7

COMPLETION

1. The use of sample information to draw conclusions about the population is

known as ____________________.

ANS: inferential statistics

PTS: 1 OBJ: Section 9.1

2. When an interval estimate is associated with a degree of confidence that it
actually includes the population parameter of interest, it is referred to as a
____________________.

ANS: confidence interval

PTS: 1 OBJ: Section 9.1

3. An estimator is unbiased if the expected value of the ____________________ is

the same as the actual value of the ____________________ it is intended to
estimate.

ANS: sample statistic; population parameter

PTS: 1 OBJ: Section 9.2

4. Interval limits refer to the upper and lower values of the ____________________.

ANS: interval estimate

PTS: 1 OBJ: Section 9.3

5. If the population cannot be assumed to be normal distributed, the sample size

must be at least ____________________ for the central limit theorem to apply.

ANS:
thirty
30

PTS: 1 OBJ: Section 9.4

SHORT ANSWER

1. The statistics and p are unbiased estimators of the parameters

____________________ and ____________________, respectively.

ANS:
;

PTS: 1 OBJ: Section 9.2

2. A random sample of thirty daily water productions (expressed in thousands)
for a given city yielded a mean of 2489.067 and standard deviation of 74.67.
What are the point estimates for the true mean daily water production and the
point estimate for the variance of this population?

Mean = ____________________

Variance = ____________________

ANS:
2489.067; 5575.61

PTS: 1 OBJ: Section 9.2

3. A glass company produces panes of glass that have specifications for a

thickness of 0.3 inches. The process standard deviation is known to be 0.04
inches. A random sample of 45 panes of glass has an average thickness of 0.322
inches. What is the 90% confidence interval around the mean? What can we say
about this process?

ANS:
0.312 inches, 0.332 inches. Since this interval does not include the 0.30 inches
in the specifications, the process is not performing satisfactorily.

PTS: 1 OBJ: Section 9.4

4. Explain whether the standard normal distribution or the t-distribution is

employed under the following circumstances:

A) Population: Not given; Sample size: 50; Population standard deviation: Given

B) Population: Normal; Sample size: 16; Population standard deviation: Not given

C) Population: Not given; Sample size: 40; Population standard deviation: Given

D) Population: Normal; Sample size: 9; Population standard deviation: Given

ANS:
Standard normal; t-distribution; Standard normal; Standard normal

PTS: 1 OBJ: Section 9.3

5. In surveying a simple random sample of 1000 assistant professors, we found
that 573 of them felt they were underpaid by at least $3500. Based on these
results, we have a 95% confidence that the proportion of the population of
assistant professors who share this sentiment is between .548 and .598.

Identify the confidence interval estimate for the population proportion.

____________________ to ____________________.

ANS:
0.548; 0.598

PTS: 1 OBJ: Section 9.3

6. In surveying a simple random sample of 1000 assistant professors, we found

Confidence level:

Confidence coefficient:

ANS:
95%; .95

PTS: 1 OBJ: Section 9.3

7. Determine the limits of the 88% confidence interval for , given that n = 72; =
18; and = 6.

____________________ to ____________________.

ANS:
16.9; 19.1

PTS: 1 OBJ: Section 9.4

8. Determine the limits of the 90% confidence interval for , given that n = 144;
= 7; and = 2.
____________________ to ____________________

ANS:
6.73; 7.27

PTS: 1 OBJ: Section 9.4

9. Determine the limits of the 68.26% confidence interval for , given that n = 64;
= 118; and = 8.

____________________ to ____________________

ANS:
117; 119

PTS: 1 OBJ: Section 9.4

10. Determine the limits of the 75% confidence interval for , given that n = 90;
= 50; and = 12.

____________________ to ____________________

ANS:
48.5; 51.5

PTS: 1 OBJ: Section 9.4

11. A cost accountant wishes to establish the average amount, , spent by

____________________ to ____________________

ANS:
$201.25; $214.75
PTS: 1 OBJ: Section 9.4

12. There are 300 students enrolled in Business Statistics. Historically, exam
scores are normally distributed with a standard deviation of 30.9. Your instructor
randomly selected a sample of 30 examinations and finds a mean of 74.2.
Determine a 90% confidence interval for the mean score for all students taking
the course.

____________________ to ____________________

ANS:
64.92; 83.48

PTS: 1 OBJ: Section 9.4

13. Suppose that the amount of time teenagers spend on the internet is
normally distributed with a standard deviation of 1.5 hours. A sample of 100
teenagers is selected at random, and the sample mean computed as 6.5 hours.

A) Determine the 95% confidence interval estimate of the population mean.

____________________ to ____________________

B) Interpret what the interval estimate in part (a) tells you.

ANS:
6.206; 6.794; If we repeatedly draw samples of size 100 from the population of
teenagers, 95% of the values of sample means will be such that the population
mean amount of time teenagers spend on the internet ( ) would be somewhere
between 6.206 hours and 6.794, and 5% of the values of will produce intervals
that would not include .

PTS: 1 OBJ: Section 9.4

14. A filling machine is designed to fill soda bottles with 16 ounces of soda. The
distribution for the weight of the bottles is normal. Twenty bottles are selected
and weighed. The sample mean is 15.3 ounces and sample standard deviation is
1.5 ounces. Develop a 90% confidence interval for this sample. What can we
conclude about this filling process?
ANS:
14.72 ounces, 15.88 ounces. Since this interval does not contain 16 ounces, the
process is not working properly.

PTS: 1 OBJ: Section 9.5

15. A college basketball player has been keeping track of his free throw shooting
practice over the summer. Each day that he practices, he shoots 150 free throws
and counts the number he makes. Today he made 117 free throws. What is the
95% confidence interval around this sample?

ANS:

PTS: 1 OBJ: Section 9.6

16. From a sample of 400 people who were asked if they were in favor of a
proposition to ban smoking in restaurants, 320 responded yes. Develop a 98%
confidence interval using this sample.

ANS:
0.7534, 0.8466

PTS: 1 OBJ: Section 9.6

17. A personnel manager is conducting a study of sales supervisory salaries in

this industry. A survey for the salaries of 36 sales supervisors found a mean of
$48.41 thousand and a standard deviation of $18.3 thousand. Determine a 98-
percent confidence interval (in thousands of dollars) for the mean of all sales
supervisory salaries in this industry.

____________________ to ____________________

ANS:
40.97; 55.84

PTS: 1 OBJ: Section 9.5

18. For a selected month, the average kilowatt hours used for 49 residential
customers showed that is 1160 and s is 1085. Compute a 98% confidence
interval estimate for the true mean.
____________________ to ____________________

ANS:
786.91; 1533.08

PTS: 1 OBJ: Section 9.5

19. Cement for building a dam is delivered by truck. The dispatcher wants to
estimate the average driver time required to load, drive to the dam, unload, and
drive back to the plant. The time is assumed to be normally distributed. Total
time required is recorded for a random sample of 18 with a mean of 543.71 and
a standard deviation of 69.83. Use these data to obtain an 80-percent
confidence interval for the average driver time.

____________________ to ____________________

ANS:
521.77; 565.65

PTS: 1 OBJ: Section 9.5

20. An economics professor is taping 60-minute lectures for replay over the
university radio station. To make sure that the brand of tapes that will be used
records for at least sixty minutes, one dozen are purchased and examined to
determine if they do record for sixty minutes. The results of the recording test in
minutes show a mean of 61.28 and standard deviation of 3.868. The professor
assumes that the playing time is normally distributed. Construct an 80-percent
confidence interval for the mean recording time employing these data.

____________________ to ____________________

ANS:
59.758; 62.802

PTS: 1 OBJ: Section 9.5

21. A rechargeable flashlight is advertised to last up to 2 1/2 hours per charge

and to recharge overnight. A test was conducted which measured the time a
light lasted before needing a recharge. A random sample of 12 lights has a
mean recharge time of 2.24 hours and a standard deviation of 1.05 hours.
Assuming the population for recharge time is normally distributed, what is the
99% confidence interval estimate for the population mean?

____________________ to ____________________

ANS:
1.30; 3.18

PTS: 1 OBJ: Section 9.5

22. Compute a 95 percent confidence interval for given a sample mean of 25, a
sample size of 16, a sample standard deviation of 3.6, and a normal population.

30. A survey of 9512 residents of the 3rd congressional district of Colorado

showed that 6134 favored cutting military spending in order to help balance the
federal budget. Construct a 90% confidence interval estimate for the proportion
of all residents in the 3rd district who favor cutting military spending to help
balance the federal budget.

____________________ to ____________________
ANS:
0.637; 0.653

PTS: 1 OBJ: Section 9.6

31. Thirty-eight percent of a sample of 100 indicated that they used a company
credit union because of lower interest rates for loans. Determine the 99%
confidence interval estimate for the portion that use company credit unions due
to lower loan rates.

____________________ to ____________________

ANS:
0.2551; 0.5049

PTS: 1 OBJ: Section 9.6

32. In a survey of 600 senior business executives by Business Week magazine,

56% indicated that they felt that even if merit and abilities are equal, people
with MBAs often get promoted faster than people without the degree. Prepare a
92% confidence interval estimate for the population proportion.

____________________ to ____________________

ANS:
0.5245; 0.5955

PTS: 1 OBJ: Section 9.6

33. The owner of a small manufacturing firm is concerned about the high cost of
health insurance for his employees. A random sample was taken from the total
of 120 employees to determine whether they would support the owner’s
proposal for participation in a preferred-provider plan. Of the 50 employees
sampled, 28 strongly supported the plan. Construct a 95% confidence for the
true proportion.

____________________ to ____________________

Do you feel that the proposed plan would get majority support from the
employees if put to a vote? Explain your answer.
ANS:
0.4546; 0.6654; Because the confidence interval is extremely wide, it would be
risky to definitely predict the outcome.

PTS: 1 OBJ: Section 9.8

34. From a community of 80 homes, the EPA took a random sample and found
the presence of lead in the tap water. In the 10 homes sampled, the average
lead content was 12 parts per billion with s = 5 pts/billion. Construct a 99%
confidence interval estimate for the population mean.

____________________ to ____________________

Do you feel that the homes exceed the EPA recommended maximum of 15
pts/billion?

Explain your answer.

ANS:
7.1575; 16.8425; Yes; Because 15 is contained in the confidence interval, there
is a possibility that the 15 pts/billion is exceeded.

PTS: 1 OBJ: Section 9.8

35. A manufacturer of salad dressings uses machines to dispense liquid

ingredients into bottles that move along a filling line. The machine that
dispenses dressings is working properly when 8 ounces are dispensed. The
standard deviation of the process is 0.15 ounces. Suppose that the average
amount dispensed in a particular sample of 50 bottles is 7.952 ounces. Develop
a 99% confidence interval around this sample mean.

ANS:
7.897, 8.007

PTS: 1 OBJ: Section 9.4

36. The temperature readings for 20 winter days in Big Rapids, Michigan are
normally distributed with a mean 5.5 degrees and a standard deviation of 1.5.
Determine the 90% confidence interval estimate for the winter mean
temperature.

____________________ to ____________________

ANS:
4.948; 6.052

PTS: 1 OBJ: Section 9.4

37. The office manager for an ophthalmologist wants to estimate the average
time that the doctor spends with each patient in order to better schedule
appointments. A random sample of 49 is taken and the sample mean is 20.3
minutes. Assume that the office manager knows from past experience that the
standard deviation is 14 minutes. She finds that a 95% confidence interval is
between 18.3 and 22.3 minutes.

What is the point estimate of the population mean?

What is the confidence coefficient?

ANS:
20.3; 0.95

6. Explain how precision for a confidence interval is related to the width of the
confidence interval.

ANS:
Precision refers to the distance between the lower limit and the upper limit of a
confidence interval. The wider the interval the less the precision.
PTS: 1 OBJ: Section 9.4

7. How can one reduce the width of a confidence interval for a given level of
confidence?

ANS:
Take a larger sample size.

PTS: 1 OBJ: Section 9.4

8. A cost accountant wished to establish the average amount, , spent by

ANS:
Any observation, which is outside this interval, should be audited.

PTS: 1 OBJ: Section 9.4

9. A city-paid consumer advocate wants to secure information about the mean

length, , of coin-separated car wash cycles. A previous study reported the
standard deviation of the length of car wash cycles to be 6 minutes. The
advocate timed the wash cycle at 81 randomly selected car wash locations and
the mean of the sample was 4.8 minutes. The 90 percent confidence interval
estimate is 3.70 to 5.90 minutes. Interpret this interval.

ANS:
We have 90% confidence that the population mean is included in this interval.

PTS: 1 OBJ: Section 9.4

10. In using the standard normal distribution to construct a confidence interval

for the population mean, what assumptions are necessary if the sample size n is
less than 30?
ANS:
In this case, we need to assume that the population is normally distributed and
the population standard deviation is known.

PTS: 1 OBJ: Section 9.4

11. Under what conditions is it appropriate to use the normal approximation to

the binomial distribution in constructing the confidence interval for the
population proportion ?

ANS:
The approximation is satisfactory whenever np and n(1 – p) are both 5.
However, the approximation is better for large values of n and whenever p is
closer to .50.

PTS: 1 OBJ: Section 9.6

Chapter 10. Hypothesis Tests

Involving a Sample Mean or
Proportion
Test Bank

TRUE/FALSE

1. True or False
A Type I error is the probability of failing to reject a false null hypothesis.

ANS: F PTS: 1 OBJ: Section 10.1

2. True or False
A Type II error is the probability of rejecting a true null hypothesis.

ANS: F PTS: 1 OBJ: Section 10.1

3. True or False
The probability of Type I error is referred to as the significance level of the test.
ANS: T PTS: 1 OBJ: Section 10.1

4. True or False
A directional claim or assertion states that a population parameter is greater
than (>), or less than (), no more than(), at least,(<), some quantity.

ANS: T PTS: 1 OBJ: Section 10.1

5. True or False
A non-directional claim or assertion states that a population parameter is equal
to some quantity.

ANS: T PTS: 1 OBJ: Section 10.1

6. True or False
Directional assertions lead to what is called a two-tail test.

ANS: F PTS: 1 OBJ: Section 10.1

7. True or False
A non-directional assertion involves what are called one-tail tests.

ANS: F PTS: 1 OBJ: Section 10.1

8. True or False
For a two-tail hypothesis test, the level of significance is the sum of both tail
areas.

ANS: T PTS: 1 OBJ: Section 10.2

9. True or False
In conducting a hypothesis test, we can choose any significance level we desire.
In practice, however, levels of 0.10, 0.05, and 0.01 tend to be most common.

ANS: T PTS: 1 OBJ: Section 10.2

10. True or False

Failure to reject a null hypothesis constitutes proof that it is true.

ANS: F PTS: 1 OBJ: Section 10.2

11. True or False
The rejection and non-rejection regions can be stated as a decision rule
specifying the conclusion to be reached for a given outcome of the test.

ANS: T PTS: 1 OBJ: Section 10.2

12. True or False

In conducting a hypothesis test about the population mean , if the population is
truly or approximately normally distributed with unknown, then the test statistic
will be z, corresponding to the normal distribution.

ANS: F PTS: 1 OBJ: Section 10.2

13. True or False

The z-test is the appropriate test statistic for any population distribution with a
small sample size and an unknown population standard deviation.

ANS: F PTS: 1 OBJ: Section 10.2

14. True or False

The p-value of a test is the level of significance, where the observed value of the
test statistic is exactly the same as a critical value for that level.

ANS: T PTS: 1 OBJ: Section 10.3

15. True or False

The p-value is the lowest possible level of significance at which the alternative
hypothesis can be rejected.

ANS: F PTS: 1 OBJ: Section 10.3

16. True or False

If the p-value for a particular hypothesis test is 0.03 with = 0.05, we do not
reject the null hypothesis.

ANS: F PTS: 1 OBJ: Section 10.3

17. True or False

The conclusion from a non-directional hypothesis test for a population mean at
the level of significance will be the same as the conclusion based on a
confidence interval at the 100 (1 – )% confidence level.

ANS: T PTS: 1 OBJ: Section 10.4

18. True or False

In testing H0: 120; H1: > 120 at the = .05 level of significance, the null
hypothesis is rejected. We must reach the same conclusion based on a
confidence interval at the 95% confidence level.

ANS: F PTS: 1 OBJ: Section 10.4

19. True or False

Confidence intervals and hypothesis tests are both concerned with using sample
information to make a statement about the unknown value of a population
parameter. Thus, it is not surprising that their results are related.

ANS: T PTS: 1 OBJ: Section 10.4

20. True or False

Reducing the probability of a Type I error also reduces the probability of a Type II
error.

ANS: F PTS: 1 OBJ: Section 10.7

21. True or False

Reducing the probability of a Type II error also reduces the probability of a Type I
error.

ANS: F PTS: 1 OBJ: Section 10.7

22. True or False

Suppose the underlying distribution is known to be normal, or that the sample
size is at least thirty (30). The t-test is the appropriate test statistic when the
sample standard deviation is used to estimate the population standard
deviation.

ANS: T PTS: 1 OBJ: Section 10.5

23. True or False
The power of a test is the probability that a true null hypothesis will be rejected.

ANS: F PTS: 1 OBJ: Section 10.7

24. True or False

If a test is carried out at a specified significance level (e.g., = .05), using a larger
sample size will change the decision rule but will not change . This is because
has been decided upon in advance.

ANS: T PTS: 1 OBJ: Section 10.7

25. True or False

If a test is carried out at a specified significance level (e.g., = .05), using a larger
sample size will reduce the value of , the probability of making a Type II error.

ANS: T PTS: 1 OBJ: Section 10.7

26. True or False

A portfolio manager was analyzing the price-earnings ratio for this year’s
performance. His boss said that the average price-earnings ratio was 20 for the
many stocks, which his firm had traded, but he felt that figure was too high. The
portfolio manager randomly selected a sample of 50 P/E ratios and found a
mean of 18.17 and standard deviation of 4.60. Assume that the population is
normally distributed and test at the 0.01 level of significance.

The correct hypotheses are:

H0: 20, H1: < 20.

ANS: T PTS: 1 OBJ: Section 10.8

27. True or False

H0: = 20, H1: > 20

ANS: F PTS: 1 OBJ: Section 10.8

28. True or False

The correct hypotheses are:

20.H0: = 20, H1:

ANS: F PTS: 1 OBJ: Section 10.8

29. True or False

The decision rule is: Reject H0 if the calculated z > 2.33.

ANS: F PTS: 1 OBJ: Section 10.8

30. True or False

ANS: F PTS: 1 OBJ: Section 10.8

31. True or False

The decision rule is: Reject H0 if the calculated t < -2.405.

ANS: T PTS: 1 OBJ: Section 10.8

32. True or False

The decision is: Because the test statistic t = -2.81 falls in the rejection region,
reject H0. At the 0.01 level, there is enough statistical evidence to conclude that
the alternative hypothesis is true and that the average P/E ratio for the stocks is
less than 20.

ANS: T PTS: 1 OBJ: Section 10.8

33. True or False

ANS: F PTS: 1 OBJ: Section 10.8

34. True or False

The decision is: Because the test statistic t = -2.83 is not less than -2.33, fail to
reject H0. At the 0.01 level, the sample data suggest that the average P/E ratio
for the stocks is not less than 20.

ANS: F PTS: 1 OBJ: Section 10.8

MULTIPLE CHOICE

1. A Type I error occurs when we:

a. reject a false null hypothesis.
b. reject a true null hypothesis.
c. don’t reject a false null hypothesis.
d. don’t reject a true null hypothesis.
ANS: B PTS: 1 OBJ: Section 10.1

2. In a criminal trial where the null hypothesis states that the defendant is
innocent, a Type I error is made when:
a. a guilty defendant is found not guilty.
b. an innocent person is found guilty.
c. a guilty defendant is found guilty.
d. an innocent person is found not guilty.
ANS: B PTS: 1 OBJ: Section 10.1
3. A Type II error is defined as:
a. rejecting a true null hypothesis.
b. rejecting a false null hypothesis.
c. failing to reject a true null hypothesis.
d. failing to reject a false null hypothesis.
ANS: D PTS: 1 OBJ: Section 10.1

4. Which of the following statements is not true?

a. The probability of making a Type I error is represented by the Greek letter .
b. The probability of making a Type II error is represented by the Greek letter .
c. The probability of making a Type II error is referred to as the level of
significance.
d. For a given sample, reducing the probability of a Type I error increases the
probability of a Type II error.
e. A Type I error can only occur if we reject the null hypothesis.
ANS: C PTS: 1 OBJ: Section 10.1

5. If a hypothesis is rejected at the .025 level of significance, it:

a. must be rejected at any level.
b. must be rejected at the .01 level.
c. must not be rejected at the .01 level.
d. may be rejected or not rejected at the .01 level.
ANS: D PTS: 1 OBJ: Section 10.1

6. In a criminal trial where the null hypothesis states that the defendant is
innocent, a Type II error is made when:
a. a guilty defendant is found not guilty.
b. an innocent person is found guilty.
c. a guilty defendant is found guilty.
d. an innocent person is found not guilty.
ANS: A PTS: 1 OBJ: Section 10.1

7. A professor of math refutes the claim that the average student spends 3
hours studying for the midterm exam. Which hypothesis is used to test the
claim?
a. H0: 3, H1: > 3
b. H0: = 3, H1: 3
c. H0: 3, H1: = 3
d. H0: = 3, H1: < 3
ANS: B PTS: 1 OBJ: Section 10.1

8. In a two-tail test for the population mean, if the null hypothesis is rejected
when the alternative hypothesis is true then:
a. a Type I error is committed.
b. a Type II error is committed.
c. a correct decision is made.
d. a one-tail test should be used instead of a two-tail test.
ANS: C PTS: 1 OBJ: Section 10.1

9. In a one-tail test for the population mean, if the null hypothesis is not rejected
when the alternative hypothesis is true then:
a. a Type I error is committed.
b. a Type II error is committed.
c. a one-tail test should be used instead of a two-tail test.
d. a two-tail test should be used instead of a one-tail test.
ANS: B PTS: 1 OBJ: Section 10.1

10. A spouse stated that the average amount of money spent on Christmas gifts
for immediate family members is above $1200. The correct set of hypotheses is:
a. H0: = 200, H1: < 1200
b. H0: > 1200, H1: = 1200
c. H0: = 1200, H1: > 1200
d. H0: < 1200, H1: = 1200
ANS: C PTS: 1 OBJ: Section 10.1

11. If we reject the null hypothesis, we conclude that:

a. there is enough statistical evidence to infer that the alternative hypothesis is
true.
b. there is not enough statistical evidence to infer that the alternative
hypothesis is true.
c. there is enough statistical evidence to infer that the null hypothesis is true.
d. the test is statistically insignificant at whatever level of significance the test
was conducted.
ANS: A PTS: 1 OBJ: Section 10.2

12. If we do not reject the null hypothesis, we conclude that:

13. The p-value of a test is:

a. the smallest at which the null hypothesis can be rejected.
b. the largest at which the null hypothesis can be rejected.
c. the smallest at which the null hypothesis cannot be rejected.
d. all of the above.
ANS: A PTS: 1 OBJ: Section 10.3

14. Consider testing the hypothesis H0: = 800 vs. H1: 800.

If the value of the test statistic z equals 1.75, then the p-value is:
a. 0.0401.
b. 0.0802.
c. 0.4599.
d. 0.9198.
ANS: B PTS: 1 OBJ: Section 10.3

15. In a one-tail test, the p-value is found to be equal to .068. If the test had
been two-tail, the p-value would have been:
a. 0.932.
b. 0.466.
c. 0.034.
d. 0.136.
ANS: D PTS: 1 OBJ: Section 10.3

16. In order to determine the p-value, which of the following is not needed?
a. The level of significance
b. Whether the test is one or two tail
c. The value of the test statistic
d. All of these are needed.
ANS: A PTS: 1 OBJ: Section 10.3

17. Consider testing the hypotheses H0: = 50 vs. H1: 50.

If n = 64, = 53.5, and = 10, then the value of the test statistic is:
a. z = 1.96.
b. t = 1.64.
c. z = 2.80.
d. t = 1.96.
e. z = 1.64
ANS: C PTS: 1 OBJ: Section 10.3

18. Which of the following p-values will lead us to reject the null hypothesis if =
0.05?
a. 0.15
b. 0.10
c. 0.05
d. 0.025
ANS: D PTS: 1 OBJ: Section 10.3

19. Suppose that we reject a null hypothesis at the .05 level of significance.
Then for which of the following values do we also reject the null hypothesis?
a. 0.06
b. 0.04
c. 0.03
d. 0.02
ANS: A PTS: 1 OBJ: Section 10.3
20. Using the confidence interval when conducting a two-tail test for the
population mean we do not reject the null hypothesis if the hypothesized value
for :
a. is to the left of the lower confidence limit.
b. is to the right of the upper confidence limit.
c. falls between the lower and upper confidence limits.
d. falls in the rejection region.
ANS: C PTS: 1 OBJ: Section 10.4

21. Based on sample data, the 90% confidence interval limits for the population
mean are 170.86 and 195.42. If the 10% level of significance was used in testing
the hypothesesH0: = 201, H1: 201, the null hypothesis:
a. would be rejected.
b. would not be rejected.
c. would have to be revised.
d. none of these.
ANS: A PTS: 1 OBJ: Section 10.4

22. A mortgage broker is offering home mortgages at a rate of 9.5% but is

fearful that this value is higher than many others are charging. A sample of 40
mortgages filed in the county court house shows an average of 9.25% with a
standard deviation of 8.61%. Does this sample indicate a smaller average? Use
= 0.05 and assume a normally distributed population.
a. Yes, the test statistic falls in the rejection region.
b. No, the test statistic falls in the acceptance region.
c. Yes, because the test statistic is greater than -1.645.
d. No, because the test statistic is -1.85 and falls in the rejection region.
e. Yes, because the sample mean of 9.25 is below 9.5.
ANS: B PTS: 1 OBJ: Section 10.5

23. In testing the hypotheses H0: = 0.40, H1: > 0.40 at the 5% significance
level, if the sample proportion is .45, and the standard error of the sample
proportion is .035, the appropriate conclusion would be:
a. to reject H0.
b. not to reject H0.
c. to reject H1.
d. to reject both H0 and H1.
ANS: B PTS: 1 OBJ: Section 10.6

24. The power of a test is the probability of making:

a. a correct decision when the null hypothesis is false.
b. a correct decision when the null hypothesis is true.
c. an incorrect decision when the null hypothesis is false.
d. an incorrect decision when the null hypothesis is true.
ANS: A PTS: 1 OBJ: Section 10.7

NUMERIC RESPONSE

1. H0: , H1: ; n > 30 and = 0.01

Find

ANS: 2.575

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Sermons
My daughter and I have argued about the average length of our preacher’s
sermons on Sunday morning. Despite my arguments, she thinks that the
sermons are more than twenty minutes (over twenty minutes is important to her
especially when soccer was playing on TV). For one year she has randomly
selected 12 Sundays and found the average time of 26.42 minutes with a
standard deviation of 6.69 minutes. Assuming that the population is normally
distributed and using a 0.05 level of significance, is my daughter correct in
thinking that the average length of sermons is more than 20 minutes?
NARREND
2. What is the value of test statistic t?

ANS: 3.32

PTS: 1 OBJ: Section 10.5

NARRBEGIN: Bank
A bank holds the mortgage on a motel which the motel owner says has an
average daily revenue of at least $2048. In the event the average is not at least
$2048, the bank will ask the motel owner for additional collateral for the loan as
protection against loan default. A loan officer is aware that the daily average
revenue is normally distributed and randomly selects 20 days during the last six
months. The sample has a mean of $2003 and standard deviation of $144.00. At
the 0.01 level, is the bank loan financially sound (should the bank ask for
additional collateral)?
NARREND
3. What is the value of test statistic t?

ANS: -1.3975

PTS: 1 OBJ: Section 10.5

PTS: 1 OBJ: Section 10.7

COMPLETION

1. A Type II error is the probability of failing to reject a ____________________. It is

represented by the Greek letter ____________________.

ANS: false null hypothesis; beta

PTS: 1 OBJ: Section 10.1

2. A Type I error is represented by the Greek letter ____________________, which

represents the probability of rejecting a ____________________.
ANS: alpha; true null hypothesis

PTS: 1 OBJ: Section 10.1

3. The ____________________ will bound rejection and non-rejection regions for the
null hypothesis.

ANS:
critical value
critical values

PTS: 1 OBJ: Section 10.2

4. The ____________________ is appropriate for hypothesis tests in which the

sample standard deviation(s) is used in estimating the value of the population
standard deviation ( ).

ANS: t-test

PTS: 1 OBJ: Section 10.5

SHORT ANSWER

NARRBEGIN: Tail graph

NARREND
1. Using the above graph, choose the answers that indicate a right-tail test:

Area 1: ____________________

Area 2: ____________________

Area 3: ____________________

ANS:
Do not reject H0; Do not reject H0; Reject H0

PTS: 1 OBJ: Section 10.1

2. Using the above graph, choose the answers that indicate a left-tail test:

Area 1: ____________________
Area 2: ____________________

Area 3: ____________________

ANS:
Reject H0; Do not reject H0; Do not reject H0

PTS: 1 OBJ: Section 10.1

3. Using the above graph, choose the answers that indicate a two-tail test:

Area 1: ____________________

Area 2: ____________________

Area 3: ____________________

ANS:
Reject H0; Do not reject H0; Reject H0

PTS: 1 OBJ: Section 10.1

4. A researcher wants to carry out a hypothesis test involving the mean for a
sample of size n = 15. He does not know the true value of the population
standard deviation, but is reasonably sure that the underlying population is
approximately normally distributed. Should he use a z-test or a t-test in carrying
out the analysis? Why?

ANS:
t-test; He should use a t-test to carry out the analysis since the population
standard deviation is unknown, but he is reasonably sure the population is
approximately normally distributed.

PTS: 1 OBJ: Section 10.2

5. It has been claimed that no more than 3% of the units coming off an
assembly line are defective. Formulate a null hypothesis and an alternative
hypothesis for this situation.

H0: ____________________
H1: ____________________

ANS:
0.03; > 0.03

PTS: 1 OBJ: Section 10.2

6. It has been claimed that no more than 3% of the units coming off an
assembly line are defective. Will this test be a one-tail – left, a one tail – right, or
a two-tail? Explain your answer.

ANS:
Right-tail; This is a one-tail test since this is a directional claim (no more than
3%). It is a right-tail test since the alternative hypothesis has a greater-than
sign. The rejection region is located in the right tail of the standard normal
curve.

PTS: 1 OBJ: Section 10.2

NARRBEGIN: Merit
In order to receive a merit raise a computer clerk must average less than 15
minutes per order form processed. An across-the-board raise was given if the
average is 15 minutes or more. The supervisor randomly selects 36 order forms
and carefully times the length of time required to enter all of the data on each
form. The significance level = 0.02. The average time to enter the 36 order
forms is 14.36 minutes, and the population standard deviation is 3.03 minutes
with a normal distribution. The test question is: Should a merit raise be given?
NARREND
7. State the null and alternative hypotheses.

ANS:
15  15, H1:  H0:

PTS: 1 OBJ: Section 10.3

8. State the decision rule in terms of the critical value as well as the p-value.

ANS:
Reject H0 if z < -2.05 or if p-value < 0.02
PTS: 1 OBJ: Section 10.3

9. What is your conclusion?

12. What is your conclusion?

ANS:
Since z = 2.96, we reject H0.

PTS: 1 OBJ: Section 10.3

13. Calculate the p-value and state your conclusions.

ANS:
Since the p-value equals 0.003, which is less than = 0.10, we reject H0.

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Retail store

A retail store claims that the average age of their customers is less than 40
years old. A sample of 50 customers had an average age of 38.7 years. Assume
the population standard deviation is 12.5 years and use = 0.05.
NARREND
14. State the null and alternative hypothesis.

ANS:

PTS: 1 OBJ: Section 10.3

15. State the decision rule in terms of the critical value.

ANS:
, then reject H0then fail to reject H0. If z If z -1.64

PTS: 1 OBJ: Section 10.3

16. What is your conclusion?

ANS:
Since z = -0.735, we fail to reject H0.

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Dimensions
The dimensions of a two by four board are not actually two inches by four
inches. Rather the actual dimensions are supposed to be 1.50 inches by 3.50
inches. A planer finishes the boards to the proper dimensions. To maintain
quality control, periodic checks are made to see that the planer is set to the
correct dimension. When the planer is adjusted properly, the average width is =
3.5 inches. If the average width is not 3.5 inches, the planer must be adjusted.
Thus the null hypothesis is = 3.5 inches and the alternate hypothesis is 3.5
inches. For control purposes, a random sample of 49 boards is taken twice daily.
The standard deviation of the process is = 0.25 inches. To minimize the
unnecessary adjustment of the planer, the risk of a Type I error, , is set at 0.05.
NARREND
17. Determine the lower and upper critical values for .

Lower value = ____________________

Upper value = ____________________

ANS:
3.43; 3.57

PTS: 1 OBJ: Section 10.3

18. State the decision rule.

ANS:
If 3.43 inches 3.57 inches, then fail to reject H0. If > 3.5784 inches, then reject
H0.

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Light Bulb Mnf.

A light bulb manufacturer claims that the average life of their light bulb is more
than 1000 hours. To test this claim, a sample of 32 light bulbs had an average
life of 1120 hours. Assume the population standard deviation is 325 hours and
use = 0.02.
NARREND
19. State the null and alternative hypothesis.

ANS:

PTS: 1 OBJ: Section 10.3

20. State the decision rule in terms of the critical value.

ANS:
, then reject H0then fail to reject H0. If z If z

PTS: 1 OBJ: Section 10.3

21. What is your conclusion?

ANS:
Since z = 2.09, we reject H0.

PTS: 1 OBJ: Section 10.3

22. State your conclusion using the p-value.

ANS:
Since the p-value equals 0.0183, which is less than = 0.02, we reject H0.

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Local Restaurant

A local restaurant claimed in an advertisement that at least 80% of their
customers rate their establishment as “Excellent”. An independent survey
company asked 200 customers their opinion and from this random sample, 168
customers rated the establishment “Excellent”. Use = 0.05.
NARREND
23. State the null and alternative hypotheses.

ANS:

PTS: 1 OBJ: Section 10.6

24. What is the p-value?

What are your conclusions?

ANS:
Since z = 1.41 and the p-value is 0.9207, we fail to reject the null hypothesis.
There is not enough evidence to conclude that at least 80% of their customers
rate the establishment “Excellent”.

PTS: 1 OBJ: Section 10.6

25. A local restaurant claimed in an advertisement that at least 80% of their

customers rate their establishment as “Excellent”. An independent survey
company asked 200 customers their opinion and from this random sample, 84
customers rated the establishment “Excellent”. Use = 0.05.

State the decision rule in terms of the critical value.

ANS:
If z 1.645, reject H0. If z > 1.645, fail to reject H0.

PTS: 1 OBJ: Section 10.6

26. H0: , H1: ; n > 30 and = 0.10.

State the appropriate decision rule.

ANS:
If z -1.28 fail to reject H0. If z < -1.28, then reject H0

PTS: 1 OBJ: Section 10.3

27. H0: , H1: ; n > 30 and = 0.01

State the appropriate decision rule.

ANS:
If z 2.575 fail to reject H0. If z > 2.575 reject H0.

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Restaurant
A restaurant claims that the average gratuity per table is $15.00. To test this
claim, a sample of 18 tables was selected which had an average gratuity of
$13.75 with a standard deviation of $2.60. Assume the population of gratuities
is normally distributed and use = 0.10.
NARREND
28. State the null and alternative hypotheses.

ANS:

PTS: 1 OBJ: Section 10.5

29. State the decision rule in terms of the critical value.

ANS:
1.740, then reject H0.t or1.740then fail to reject H0. If t 1.740 t If
-1.740

PTS: 1 OBJ: Section 10.5

30. What is your conclusion?

ANS:
Since t = -2.040, we reject the null hypothesis. The claim that the average
gratuity is $15.00 is not supported by this sample.

PTS: 1 OBJ: Section 10.5

NARRBEGIN: Political candidate

A political candidate needs more then 50% of the votes to win the next election.
In an effort to convince contributors to his campaign, he samples 800 potential
voters of which 432 indicated they would vote for him. Use = 0.05.
NARREND
31. State the null and alternative hypotheses.

ANS:

PTS: 1 OBJ: Section 10.6

32. State the decision rule in terms of the critical value.

ANS:
1.645, then reject H0then fail to reject H0. If z 1.645If z

PTS: 1 OBJ: Section 10.6

33. What is the p-value?

What are your conclusions?

ANS:
Since z = 2.26 and the p-value is 0.0119 we reject the null hypothesis, and
conclude that the candidate will receive more than 50% of the votes.

PTS: 1 OBJ: Section 10.6

NARRBEGIN: General Manager
The general manager of a large discount chain was considering location of a
new store in a small mid-western city. The decision was dependent upon the per
capita retail sales for the city being significantly greater than $4500. A sample
of 500 residents was taken, and showed a mean of $4780. A population
standard deviation of $2500 was known.
NARREND
34. State the null and alternative hypotheses.

H0: ____________________

ANS:
Reject H0; there is enough statistical evidence to conclude that the alternative
hypothesis is true and that the average per capita retail sales for the city is
greater than $4500

PTS: 1 OBJ: Section 10.3

38. Determine the p-value associated with each of the following values of the
standardized test statistic z.

A) Two-tail test, with z = 1.50

B) One-tail test, with z = 1.05

C) One-tail test, with z = -2.40

ANS:
0.1336; 0.1469; 0.0082

PTS: 1 OBJ: Section 10.3

NARRBEGIN: Tobacco Industry

The tobacco industry advertised that the per capita number of cigarettes sold
per year was 3700. An anti-smoking organization argued strongly that per capita
consumption had declined.
NARREND
39. State the null and alternative hypotheses.

ANS:
H1: H0:

PTS: 1 OBJ: Section 10.3

PTS: 1 OBJ: Section 10.3

47. A filling machine is designed to fill soda bottles with 16 ounces of soda. The
distribution for the weight of the bottles is normal. Twenty bottles are selected
and weighed. The sample mean is 15.3 ounces and sample standard deviation is
1.5 ounces. Develop a 90% confidence interval for this sample. What can we
conclude about this filling process with = 0.10?

ANS:
The 90% confidence interval is 14.72, 15.88. Since this interval does not include
the expected population mean of 16.0 ounces, we can conclude the process is
not performing properly.

PTS: 1 OBJ: Section 10.4

48. Suppose that 9 observations are drawn from a normal population whose
standard deviation is 2. The observations are: 15, 9, 13, 11, 8, 12, 11, 7, and 10.
At 95% confidence, you want to determine whether the mean of the population
from which this sample was taken is significantly different from 10.

A) State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

B) Compute the value of the test statistic.

C) Determine the rejection region.

D) Interpret the results.

ANS:
= 10; 10; 1.0; Reject H0 if |z| > 1.96; Do not reject H0

56. For a sample of 36 items from a population for which the standard deviation
the sample mean is 350. Use the 95% confidence interval to test the hypothesis
H0: = 400 versus H1: 400 at the = .05 level of significance.

ANS:
= 0.05 = 400 falls outside the confidence limits (346.08 and 353.92), we
reject H0 at Since the hypothesized value of

PTS: 1 OBJ: Section 10.4

NARRBEGIN: County Agricultural

A county agricultural analyst took a sample of average annual precipitation for
50 cities. He wanted to test the null hypothesis that the average annual rainfall
was at most 31.0 inches against the alternative that it was greater than 31.0
inches. Assume that the sample standard deviation was 13.76, and the sample
mean was 34.74. Perform the appropriate test for the county analyst at the 0.05
level.
NARREND
57. What is the decision rule?

ANS:
Reject H0 if the calculated t > 1.677.

PTS: 1 OBJ: Section 10.5

58. Calculate the test statistic and write your conclusion.

Appropriate test: ____________________

Test statistic = ____________________

Conclusion: __________________________

ANS:
t-test; 1.922; Reject H0
PTS: 1 OBJ: Section 10.5

59. What is the interpretation of your conclusion?

ANS:
At the 0.05 level of significance, there is enough statistical evidence to conclude
that the alternative hypothesis is true and that the average annual rainfall in the
50 cities is greater than 31 inches.

PTS: 1 OBJ: Section 10.5

60. A parents group in New York City was concerned with the alcohol content in
an over-the-counter cough syrup. They felt that the content was greater than
the 2 cc/bottle stated on the label. A sample of 30 bottles showed an average
alcohol content of 3.1 cc/bottle with a standard deviation of 2 cc./bottle. Using a
0.05 level of significance and assuming a normal distribution, does the sample
indicate that the alcoholic content is above 2 cc/bottle?

Appropriate test: ____________________

Test statistic = ____________________

Conclusion: ____________________

Interpretation: _________________________________________________________

ANS:
t-test; 3.01; Reject H0; Parents are correct

PTS: 1 OBJ: Section 10.5

61. A production engineer is checking the volume in cans of paint as the cans
leave the filling line. The machine is set to fill the cans with 4 liters. However,
the engineer wishes to determine if the cans are being filled with less than 4
liters. A sample of 36 is taken. The sample shows a mean of 3.97 and a standard
deviation of 0.14. Conduct the appropriate test at the 0.01level of significance.

Appropriate test: _____________________

Test statistic = ____________________

Conclusion: ____________________

Interpretation: ____________________________________________________

ANS:
t-test; -1.286; Do not reject H0; The cans are filled properly

PTS: 1 OBJ: Section 10.5

H0: ____________________

H1: ____________________

ANS:
20; > 20

PTS: 1 OBJ: Section 10.5

63. What is the decision rule?

ANS:
Reject H0 if t > 1.796

PTS: 1 OBJ: Section 10.5

64. What is the conclusion?

ANS:
Reject H0. The average sermon length is more than twenty minutes.

PTS: 1 OBJ: Section 10.5

ANS:
H1: H0:

PTS: 1 OBJ: Section 10.5

66. What is the decision rule?

ANS:
Reject H0 if t < -2.539

PTS: 1 OBJ: Section 10.5

67. What is the conclusion?

ANS:
Do not reject H0. The bank should not ask for additional collateral.

PTS: 1 OBJ: Section 10.5

NARRBEGIN: Life span

Research has claimed that the average life span of a male mosquito is 15 days.
To test this claim, the life spans of 20 male mosquitos were observed to have an
average of 16.5 days and a standard deviation of 2.2 days. Assume that the life
spans are normally distributed and set = 0.05.
NARREND
68. State the null and alternative hypotheses.

ANS:
H0:
 H1:

PTS: 1 OBJ: Section 10.5

69. State the decision rule in terms of the critical value.

ANS:
2.093, fail to reject H0. If tIf -2.093 t < -2.093 or t > 2.093, then reject H0.

PTS: 1 OBJ: Section 10.5

70. State your conclusion.

ANS:
Since t = 3.05, we reject the null hypothesis and conclude that the average life
span of male mosquitos is not 15 days.

PTS: 1 OBJ: Section 10.5

NARRBEGIN: Golf
A round of golf on your typical course requires at least 4.5 hours. A particular
golf club claims that the average length of time to complete a round of golf on
their course is less than 4.5 hours. To test this claim, the club sampled 15 golfers
and recorded their time to finish their round. The sample average was 4.4 hours
with a standard deviation of 0.8 hours. Assume the time to complete a round of
golf is normally distributed and use = 0.01.
NARREND
71. State the null and alternative hypotheses.

ANS:

PTS: 1 OBJ: Section 10.5

72. State the decision rule in terms of the critical value.

ANS:
, then reject H0.then fail to reject H0. If t If t

PTS: 1 OBJ: Section 10.5

73. State your conclusions.

ANS:
Since t = -0.484, we fail to reject the null hypothesis. There does not appear to
be a basis for the claim that the average round of golf can be completed in less
than 4.5 hours.

PTS: 1 OBJ: Section 10.5

74. A random sample of 10 observations was drawn from a large population. The
data values were: 22, 17, 27, 20, 23, 19, 24, 18, 19, and 24.

A) Estimate the population mean with 90% confidence.

____________________ to ____________________

B) Test to determine if we can infer at the 5% significance level that the

population mean is not equal to 20.

H0: ____________________

H1: ____________________

Appropriate test: ____________________

Test statistic = ____________________

Conclusion: ______________________

C) What is the required condition of the techniques used in parts (a) and (b)?

D) What graphical device can you use to check to see if that required condition
is satisfied?
ANS:
19.446; 23.154; = 20; 20; t-test; 1.285; Do not reject H0; The population is
approximately normally distributed.; Histogram

PTS: 1 OBJ: Section 10.5

75. A random sample of 10 observations was drawn from a large population. The
data values were: 6, 4, 4, 7, 5, 5, 4, 5, 6, and 4 Test to determine if we can infer
at the 5% significance level that the population mean is less than 6.

ANS:
6, Rejection region: t  = 6, H1: H0: < -t.05, 9 = -1.833; Test statistic: t =
-3.0; Reject H0, that is, enough statistical evidence to suggest that the
population mean is less than 6

PTS: 1 OBJ: Section 10.5

76. A random sample of 7 observations was drawn from a normal population.

The following summations were computed: xi = 63.5 and xi 2 = 580.2.

Test the following hypotheses: H0: = 8, H1: > 8, at the 1% significance level.

Appropriate test:____________________

Test statistic = ____________________

Conclusion: ____________________

ANS:
t-test; 3.403; Reject H0

PTS: 1 OBJ: Section 10.5

77. Use the following information to test at a 0.01 level of significance. n = 400;
p = 0.03;
H0: 0.05, H1: < 0.05.

Compute the test statistic.

Appropriate test: ____________________

Test statistic = ____________________

NARRBEGIN: Soft drink
A soft drink dispenser is set to automatically dispense drinks and ice in 8 oz.
cups. The machine is set to fill the cups with 7 1/4 oz. so that the liquid will not
run over the top of the cup. The company is getting complaints that the machine
is filling the cups too full and spilling over. When the machine is operating
properly, only 1% of the cups will not be filled properly. The production manager
conducted a one-tail hypothesis test at the 0.01 level to check the machine. A
sample of 50 fills was measured.
NARREND
81. What are the appropriate hypotheses?

ANS:
H1:  H0:

PTS: 1 OBJ: Section 10.5

82. For the critical z, identify the sample proportion that this z-value represents.

p = ____________________

Use the value of p determined above to state a decision rule for the test.

ANS:
0.0428; Reject H0 if p > 0.0428

PTS: 1 OBJ: Section 10.6

83. What is the probability that the manager will fail to reject a false H0 if the
actual population proportion of defects is 0.03?

Z = ____________________

= ____________________

ANS:
0.91; 0.8186

PTS: 1 OBJ: Section 10.6

84. A random sample of 200 observations shows that there are 36 successes.
Can we conclude at the 1% significance level that the true proportion of
successes in the population is less than 24%?

ANS:
 = 0.24, H1: H0: < 0.24; Rejection region: z < -z.01=-2.33; Test statistic: z =
-1.99; Fail to reject H0;

PTS: 1 OBJ: Section 10.6

85. The power of the test refers to the probability of:

ANS:
rejecting a false null hypothesis.

PTS: 1 OBJ: Section 10.7

86. A hypothesis test has been set up and is to be conducted at the =.025 level
of significance. If the sample is doubled, what will be the effect on ? On ?

ANS:
None; Decrease

PTS: 1 OBJ: Section 10.7

NARRBEGIN: Mr. Perfection

Mr. Perfection, the owner of a small unique restaurant called the Village Feed
Store, is concerned with the waiting time for patrons on Sunday morning – the
busiest day of the week. He is fearful that, though his establishment is
extremely popular, excess waiting time will drive customers to Kenny’s, a
restaurant down the street. The hostess insists that customers do not have to
wait more than an average of 10 minutes before being seated, but Mr. Perfection
feels that the waiting time is longer. He takes a random sample of 100
customers over several Sundays. Assume that the population standard deviation
= 12 minutes, and that the significance level = 0.05.
NARREND
87. State the null and alternative hypotheses.

H0: ____________________
H1: ____________________

ANS:
10; > 10

PTS: 1 OBJ: Section 10.8

88. What is the decision rule in terms of the sample mean ?

ANS:
Reject H0 if > 11.974

PTS: 1 OBJ: Section 10.8

89. What is the probability of making a Type II error if the true mean is 14?

ANS:
= 0.0455

PTS: 1 OBJ: Section 10.8

90. What is the power of the test?

ANS:
= 0.9545Power = 1 –

PTS: 1 OBJ: Section 10.7

91. In statistics, what does each of the following symbols represent?

___________________________________________a.

___________________________________________b.

___________________________________________c. 1 –

d. H0 ___________________________________________

e. H1 ___________________________________________

ANS:
a. Alpha, represents the probability of making a Type I error.
b. Beta, represents the probability of making a Type II error.
c. The power of a test (the probability that the test will correctly reject a fall null
hypothesis)
d. Null hypothesis
e. Alternative hypothesis

PTS: 1 OBJ: Section 10.8

ESSAY

Chapter 11. Hypothesis Tests

Involving Two Sample Means
or Proportions
Test Bank

TRUE/FALSE

1. True or False
When comparing the mean of two dependent samples, we are interested in only
one variable: the difference between measurements for each person or object.

ANS: T PTS: 1 OBJ: Section 11.2

2. True or False
A typical example of dependent samples occurs when we have before-and-after
measures of the same individuals.

ANS: T PTS: 1 OBJ: Section 11.1

3. True or False
An important factor in choosing between the pooled-variances t-test and the
unequal-variances t-test is whether we can assume the population means might
be equal.
ANS: F PTS: 1 OBJ: Section 11.1

4. True or False
Although it is often associated only with small-sample tests, the t distribution is
appropriate when the population standard deviations are unknown, regardless of
how large or small the samples happen to be.

ANS: T PTS: 1 OBJ: Section 11.2

5. True or False
When the population standard deviations are unknown and not assumed to be
equal, pooling the sample standard deviations into a single estimate of their
common population value is no longer applicable.

ANS: T PTS: 1 OBJ: Section 11.3

6. True or False
When the population standard deviations are unknown and are not assumed to
be equal, s1 and s2 must be used to estimate their respective population
standard deviations, 1 and 2.

ANS: T PTS: 1 OBJ: Section 11.3

7. True or False
The number of degrees of freedom associated with the unequal-variances t-test
for comparing the means of two independent samples is n1 + n2 – 2.

ANS: F PTS: 1 OBJ: Section 11.3

8. True or False
When either test can be applied to the same data, the z-test for comparing the
means of two independent samples is preferable to the unequal-variances t-
tests, especially when doing the test with computer assistance.

ANS: F PTS: 1 OBJ: Section 11.3

9. True or False
The z-test requires no assumptions about the shape of the population
distributions as long as both n1 and n2 are 30.
ANS: T PTS: 1 OBJ: Section 11.4

10. True or False

The z-test approximation to the unequal variance t-test assumes that the
population standard deviations, 1 and 2 , are known.

ANS: F PTS: 1 OBJ: Section 11.4

11. True or False

If we wish to examine the before-and-after productivity of individual employees
after a change in their workstation layout, a matched-pairs t-test is applicable.

ANS: T PTS: 1 OBJ: Section 11.5

12. True or False

If we wish to compare the before-and-after reading speeds of individual
participants in a speed-reading course, the z-test for comparing the means of
two independent samples is appropriate.

ANS: F PTS: 1 OBJ: Section 11.5

13. True or False

The comparison of sample proportions from two independent samples relies on
the t-distribution and assumes that the two populations are normally distributed.

ANS: F PTS: 1 OBJ: Section 11.6

14. True or False

The F distribution is the sampling distribution of that would result if two samples
were repeatedly drawn from the same, normally distributed population.

ANS: T PTS: 1 OBJ: Section 11.7

15. True or False

Unlike the t distribution, the exact shape of the F distribution is determined by
two different degrees of freedom instead of just a single value.

ANS: T PTS: 1 OBJ: Section 11.7

16. True or False
Independent samples are those for which the selection process for one is not
related to the selection process for the other.

ANS: T PTS: 1 OBJ: Section 11.8

17. True or False

Comparing the means or proportions from two independent samples requires
comparing the calculated value of a test statistic with the computed p-value,
then deciding whether the null hypothesis should be rejected.

ANS: F PTS: 1 OBJ: Section 11.8

18. True or False

One of the most useful applications of business statistics involves comparing
two samples to examine whether a difference between them is significant or
more likely due to chance variation from one sample to the next.

ANS: T PTS: 1 OBJ: Section 11.8

19. True or False

An example of dependent samples occurs when subjects are randomly assigned
to the experimental and control groups of an experiment.

ANS: F PTS: 1 OBJ: Section 11.8

20. True or False

A typical example of independent samples occurs with before-and-after
measurements for the same individuals or test units.

ANS: F PTS: 1 OBJ: Section 11.8

21. True or False

A special hypothesis test, based on the t-distribution, can be applied to test the
null hypothesis that the population variances are equal for two independent
samples.

ANS: F PTS: 1 OBJ: Section 11.8

MULTIPLE CHOICE
1. A political analyst in Texas surveys a random sample of registered Democrats
and compares the results with those obtained from a random sample of
registered Republicans. This would be an example of:
a. Independent samples.
b. dependent samples.
c. Independent samples only if the sample sizes are equal.
d. Dependent samples only if the sample sizes are equal.
ANS: A PTS: 1 OBJ: Section 11.1

2. In testing the difference between two population means using two

independent samples, we use the pooled variance in estimating the standard
error of the sampling distribution of the sample mean difference if the:
a. sample sizes are both large.
b. populations are at least normally distributed with equal variances.
c. populations are non-normal with unequal variances.
d. All of these are required conditions.
ANS: B PTS: 1 OBJ: Section 11.2

3. In testing whether the means of two normal populations are equal, summary
statistics computed for two independent samples are as follows:

Assume that the population variances are equal. Then, the standard error of the
sampling distribution of the sample mean difference is equal to:
a. 0.1017.
b. 1.2713.
c. 0.3189.
d. 1.1275.
ANS: C PTS: 1 OBJ: Section 11.2

4. Two samples of sizes 25 and 35 are independently drawn from two normal
populations, where the unknown population variances are assumed to be equal.
The number of degrees of freedom of the equal-variances t-test statistic is:
a. 60.
b. 59.
c. 58.
d. 35.
ANS: C PTS: 1 OBJ: Section 11.2

5. In testing the difference between two population means using two

independent samples, the sampling distribution of the sample mean difference
is normal if the:
a. sample sizes are both greater than 30.
b. populations are normal.
c. populations are non-normal and the sample sizes are large.
d. population sizes are both greater than 30.
e. all of these are required conditions.
ANS: B PTS: 1 OBJ: Section 11.3

6. In testing the difference between two population means using two

independent samples, the population standard deviations are assumed to be
unknown, each sample size is 30, and the calculated test statistic z = 2.56. If
the test is two-tail and 5% level of significance has been specified, the
conclusion should be to:
a. reject the null hypothesis.
b. not to reject the null hypothesis.
c. choose two other independent samples.
d. none of these answers is correct.
ANS: A PTS: 1 OBJ: Section 11.4

7. When the necessary conditions are met, a two-tail test is being conducted to
test the difference between two population means, but your statistical software
provides only a one-tail area of 0.036 as part of its output. The p-value for this
two-tail test will be:
a. 0.018.
b. 0.009.
c. 0.072.
d. 0.964.
ANS: C PTS: 1 OBJ: Section 11.4
8. The number of degrees of freedom associated with the t test, when the data
are gathered from a matched pairs experiment with 13 pairs, is:
a. 13.
b. 26.
c. 12.
d. 24.
ANS: C PTS: 1 OBJ: Section 11.5

9. Diet and health have become big business, but many people are not following
good health practices. In 1980, a survey of 150 indicated that 30 percent said
that at least one time during that year they had five or more alcoholic drinks in
one sitting. In 2000, a similar survey of 150 showed that 38 percent had five
drinks in one sitting at least one time during the year. Does this represent a
significant increase? Use 0.01 level of significance.
a. The test statistic of -1.46 is not less than -1.96; therefore, the sample
evidence indicates that there has been no significant change in the proportion of
those who drink heavily at least one day during the year.
b. The test statistic of -1.46 is not less than -2.58; therefore, the sample
evidence indicates that there has been no significant change in the proportion of
those who drink heavily at least one day during the year.
c. The test statistic of -1.46 is not less than -2.33; therefore, the sample
evidence indicates that there has not been significant change in the proportion
of those who drink heavily at least one day during the year.
d. The test statistic of -2.56 is less than -2.33; therefore, the sample evidence
indicates that there has been significant change in the proportion of those who
drink heavily at least one day during the year.
e. The test statistic of -2.56 is less than -2.58; therefore, the sample evidence
indicates that there has been significant change in the proportion of those who
drink heavily at least one day during the year.
ANS: C PTS: 1 OBJ: Section 11.6

10. When the necessary conditions are met, a two-tail test is being conducted to
test the difference between two population proportions. The two sample
proportions are p1 = 0.25 and p2 = 0.20, and the standard error of the sampling
distribution of p1 – p2 is 0.04. The calculated value of the test statistic will be:
a. z = 0.25.
b. z = 1.25.
c. t = 0.25.
d. t = 0.80.
ANS: B PTS: 1 OBJ: Section 11.6

11. A sample of size 100 selected from one population has 60 successes, and a
sample of size 150 selected from a second population has 95 successes. The
test statistic for testing the equality of the population proportions equal to:
a. -0.5319.
b. 0.7293.
c. -0.419.
d. 0.2702.
ANS: A PTS: 1 OBJ: Section 11.6

12. When the necessary conditions are met, a two-tail test is being conducted to
test the difference between two population proportions. If the value of the test
statistic z is 2.05, then the p-value is:
a. 0.4798.
b. 0.0404.
c. 0.2399.
d. 0.0202.
ANS: B PTS: 1 OBJ: Section 11.6

13. In testing for the equality of two population variances, when the populations
are normally distributed, the 10% level of significance has been used. To
determine the rejection region, it will be necessary to refer to the F table
corresponding to an upper-tail area of:
a. 0.90.
b. 0.05.
c. 0.20.
d. 0.10.
ANS: B PTS: 1 OBJ: Section 11.7
14. Which of the following statements are true?
a. The pooled-variances t-test is used whenever the population standard
deviations are assumed to be equal regardless of the sample size.
b. The unequal-variances t-test is used whenever the population standard
deviations are unknown and cannot be assumed to be equal.
c. The z-test can be used as a close approximation to the unequal-variances t-
test when the population standard deviations are not assumed to be equal, but
samples are large (each n 30).
d. All of these statements are true.
e. None of these statements is true.
ANS: D PTS: 1 OBJ: Section 11.8

NUMERIC RESPONSE

1. Assume two normally distributed populations with equal population standard

deviations. A random sample is taken from each population. Determine the
standard error of the estimate for the following situation:

ANS: 2.48

PTS: 1 OBJ: Section 11.2

NARRBEGIN: Price earnings

A comparison of the price-earnings (P/E) ratio for the top and bottom 100
companies in valuation is being prepared. A financial advisor randomly sampled
each group to determine whether there is any difference in P/E ratios of the two
groups of companies. Let 1 = a top 100 company and 2 = a bottom 100
company. Assume equal population variances and that the populations are
normally distributed. The advisor is to use a 0.01 significance level. The data
were randomly selected and are summarized below:
NARREND
2. Calculate the standard error of the estimate.

ANS: 4.776

PTS: 1 OBJ: Section 11.2

NARRBEGIN: Realtor
A new realtor in a large community is attempting to determine differences in the
selling prices of houses in two sections of the community. Population 1 is the
Northeast and Population 2 is the Southwest. The realtor is going to perform the
hypothesis test: H0:

H1: A random sample of 35 sale homes is taken from the Northeast and 41 from
those in the Southwest using the multiple listing services. A Minitab summary of
the results of the two samples expressed in thousands follows:
NARREND
3. What is the standard error of the difference between the two means?

ANS: 10.410

PTS: 1 OBJ: Section 11.4

4. What is the value of the test statistic?

z = ____________________

ANS: 2.526

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Traffic Coordinator

A traffic coordinator for a community wishes to determine whether or not there
is any difference in the average age of female and male drivers involved in rear-
end accidents. The hypothesis test is: H0: (no difference in mean age)

H1: (mean age is different) A random sample of males and females involved in
rear-end accidents results in the following Minitab summary:
NARREND
5. What is the standard error of the difference between the two means?

ANS: 2.314

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Women drivers

In the past, young women drivers have maintained a better driving record than
young men drivers. An insurance company is concerned with the driving record
of its insured customers. Specifically, it conducts a test for the number of
speeding tickets received during the past year by drivers between the ages of
18 and 25.
NARREND
6. A test for the equality of average number of tickets per driver for the two
groups is desired. Use = 0.01. Calculate the p-value for this test.

ANS: 0.1646

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Chrysler corp

Chrysler Corp. is responding to an advertisement by Toyota, which claims that
its compact version gets much better gasoline mileage for in-city driving than
any U.S. made car. Below are the results of surveys conducted to test the claim.
Perform the appropriate test at the 0.01 significance level.
NARREND
7. What is the p-value?

ANS: 0.3557

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Medicare
An economist wishes to test whether there is any difference in the proportion of
households receiving Medicare for white households with less than $5,000
income per year and white households with $15,000 or more income per year. A
random sample from households with less than $5,000 income per year is taken,
and a random sample of households with $15,000 or more income is taken. The
results of the samples are:
NARREND
8. Use a 0.01 significance level to determine if there is sufficient evidence to
conclude that a difference in proportions exists. Calculate the standard error of
estimate.

ANS: 0.039
PTS: 1 OBJ: Section 11.6

NARRBEGIN: Ford Motor Co.

The Ford Motor Company, as part of its quality control program, began returning
to the supplier all shipments of steel that had defects or faulty chemistry. When
Ford began this program, the defective rate in 100 shipments was 9%. A recent
survey indicated that 2.2% in 136 shipments was defective. Does this represent
a significant improvement in the quality of the steel? Test at the 0.05 level.
NARREND
9. What is the p-value?

ANS: 0.0094

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Production Line

ANS: 0.0375

PTS: 1 OBJ: Section 11.6

COMPLETION

1. ____________________ samples are those for which the selection process for one
is not related to the selection process for the other.

ANS: Independent

PTS: 1 OBJ: Section 11.1

2. We say samples are ____________________ when the selection process for one is
related to the selection process for the other.

ANS: dependent
PTS: 1 OBJ: Section 11.1

3. The pooled-variances t-test requires the assumption that the two population
___________________________________ are equal, and that the populations are at
least ___________________________________ distributed.

ANS: standard deviations; approximately normally

PTS: 1 OBJ: Section 11.2

4. The ____________________ approximation is an alternative to the unequal-

variances t-test whenever both n1 and n2 are 30.

ANS: z-test

PTS: 1 OBJ: Section 11.4

5. Tests in which samples are not independent are referred to as

______________________________.

ANS: matched pairs

PTS: 1 OBJ: Section 11.5

6. A test that we can use to determine whether two population variances are
equal is the ____________________.

ANS: F-test

PTS: 1 OBJ: Section 11.7

7. When comparing the means of two independent samples, the

____________________ is applicable whenever the population standard deviations
are unknown.

ANS: t-test

PTS: 1 OBJ: Section 11.8

SHORT ANSWER
NARRBEGIN: Price earnings
A comparison of the price-earnings (P/E) ratio for the top and bottom 100
companies in valuation is being prepared. A financial advisor randomly sampled
each group to determine whether there is any difference in P/E ratios of the two
groups of companies. Let 1 = a top 100 company and 2 = a bottom 100
company. Assume equal population variances and that the populations are
normally distributed. The advisor is to use a 0.01 significance level. The data
were randomly selected and are summarized below:
NARREND
1. State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.2

2. What is the value of the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
t-test; 1.71

PTS: 1 OBJ: Section 11.2

3. What is the decision rule?

ANS:
Reject H0 if t < -3.169 or if t > 3.169.

PTS: 1 OBJ: Section 11.2

4. What is the conclusion?

ANS:
Do not reject H0

PTS: 1 OBJ: Section 11.2

NARRBEGIN: Automotive parts

A regional automotive parts chain store firm wants to improve the sales of tune-
up supplies. It believes that a TV ad with a popular local, but offbeat, know-it-all
actor might be able to affect their sales. Before the ads are run on TV, the
company randomly samples eight of its weekly sales from past years. Following
the ad campaign, eight weeks of sales were sampled. Weekly sales are
approximately normally distributed and the population standard deviations are
equal. Their hypothesis test is: Did the TV ad campaign help or hurt sales? To
answer this question, the company plans to use a 0.05 significance level. The
results of the two samples are:
NARREND
5. State null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
(no effect on sales
; (some effect on sales)

PTS: 1 OBJ: Section 11.2

6. What is the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
t-test; -0.446

PTS: 1 OBJ: Section 11.2

7. What is the decision rule?

ANS:
Fail to reject H0 if t -2.145 or if t > 2.145

PTS: 1 OBJ: Section 11.2

8. What is the conclusion?

ANS:
Do not reject H0

PTS: 1 OBJ: Section 11.2

NARRBEGIN: Battery
A new brand of battery for use in calculators and cameras is said to last
significantly longer than another brand. A camera manufacturer is to test this
brand (Y) with brand (X) to see if brand Y has a longer life. If brand Y does last
longer, the camera manufacturer will equip their new cameras with them. If not,
they will equip them with brand X that is less costly. Twenty cameras are
equipped as follows: ten with brand Y batteries and ten with brand X batteries
and the life of the batteries measured. Is brand Y superior (does it last longer) to
brand X? To answer this question, the camera manufacturer uses a 0.01
significance level and knows that the populations are normally distributed with
equal variances. Sample data are:
NARREND
9. State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:



PTS: 1 OBJ: Section 11.2

10. What is the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
t-test; -15.95

PTS: 1 OBJ: Section 11.2

11. What is the decision rule?

ANS:
Reject H0 if t < -2.552; Fail to reject H0 if t

PTS: 1 OBJ: Section 11.2

12. State the conclusion.

ANS:
Reject H0 The evidence points to Brand Y lasting longer than Brand X, so the
camera manufacturer should equip its cameras with Brand Y

PTS: 1 OBJ: Section 11.2

NARRBEGIN: Shooting club

A trap and skeet shooting club purchases clay pigeons. These are quite fragile
and often break in the box during shipment without any outward sign of
breakage. Even as the pigeons are loaded into the throwing machine, broken or
cracked pigeons may not be noticed. Each pigeon broken is a net loss to the
club so the club is anxious to purchase from suppliers who have a record of little
or no breakage in shipping and handling. Two suppliers of clay pigeons are
contacted and asked for price quotes. Supplier 1 quotes a higher price than
Supplier 2 but says that the higher price is the result of better packaging and
thus more usable pigeons per case. The shooting club manager decides to
purchase 10 cases from both suppliers. Each case has 250 pigeons. Careful
records are maintained on each case as to the number of good pigeons. The
records after the cases were used are as follows:
NARREND
13. Use Excel or Minitab to summarize this data using descriptive statistics
ANS:
Total
Variable Count Mean SE Mean TrMean StDev Minimum Q1 Median
Supplier 1 10 239.10 1.27 238.88 4.01 234.00 234.75 240.00
Supplier 2 10 220.10 2.01 220.38 6.37 208.00 216.75 220.00

Variable Q3 Maximum
Supplier 1 241.50 246.00
Supplier 2 225.25 230.00

PTS: 1 OBJ: Section 11.3

14. Use Excel or Minitab to conduct a two-sample t-test

2 at the 5% significance level. What is your conclusion? 1 2 H1:  1 Test

the hypotheses: H0:

ANS:
Difference = mu (Supplier 1) – mu (Supplier 2)
Estimate for difference: 19.0000
95% CI for difference: (13.9271, 24.0729)
T-Test of difference = 0 (vs not =): T-Value = 7.98 P-Value = 0.000 DF = 15

Since the P-value < 0.05, we reject H0, there is enough statistical evidence to
conclude that the true mean number of good pigeons from supplier 1 is higher
than those from supplier 2.

PTS: 1 OBJ: Section 11.3

NARRBEGIN: Battery Manufacturer

A battery manufacturer claims that their new “long-lasting” battery has an
average life that is significantly longer than their competitor’s “regular” battery.
Both types of batteries were tested and the number of hours each battery lasted
is shown in the following table.

Long-Lasting Battery
(Population 1) Regular Battery
(Population 2)
51 42
44 29
58 51
36 38
48 39
53 44
57 35
40 40
49 48
44 45
60
50

NARREND
15. Assume unequal variances. State the null and alternative hypothesis.

ANS:

PTS: 1 OBJ: Section 11.3

16. Assume unequal variances. How many degrees of freedom are associated
with this test?

ANS:
d.f. = 19.92, rounded to 20.

20. Use Minitab or Excel to conduct a two-sample t-test to test the hypotheses:
H0: H1: at the 5% significance level.

ANS:
Two-sample T for Top ten vs Bottom ten

N Mean StDev SE Mean

Top ten 10 7.80 1.02 0.32
Bottom ten 10 6.48 2.38 0.75
Difference = mu (Top ten) – mu (Bottom ten)
Estimate for difference: 1.32000
95% CI for difference: (-0.46533, 3.10533)
T-Test of difference = 0 (vs not =): T-Value = 1.61 P-Value = 0.133 DF = 12

Since p-value = 0.133 > 0.05, we fail to reject H0:

PTS: 1 OBJ: Section 11.3

NARRBEGIN: Coffee breaks

Do government employees take longer coffee breaks than private sector
workers? That is a question that interested a management consultant. To
examine the issue, he took a random sample of ten government employees and
another random sample of ten private sector workers and measured the amount
of time (in minutes) they spent in coffee breaks during the day. The results are
listed below. Assume that the two populations are normally distributed.
NARREND
21. Do these data provide sufficient evidence at the 5% significance level to
support the consultant’s claim?

H0: ____________________

H1: ____________________

Appropriate test: ____________________

Test statistic = ____________________

Conclusion: ____________________

Test statistic = ____________________

ANS:
z-test; -2.14

PTS: 1 OBJ: Section 11.4

27. What is the decision rule at the 0.025 level of significance?

ANS:
if z or 2.24; Reject H0 if z  z Fail to reject H0 if -2.24

PTS: 1 OBJ: Section 11.4

28. What is the conclusion?

ANS:
Do not reject H0 There is not enough statistical evidence to say that there is a
difference in the average age of female and male drivers involved in rear-end
accidents.

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Slacks Manufacturer

A slacks manufacturer is deciding whether to purchase a new method for
bonding seams together. Before purchasing a new method that bonds, or glues,
the seams together, the manufacturer wishes to determine whether or not the
“bonded” seams can withstand more pulling stress than standard seams sewn
with thread. The creator of the new method provides a demonstration machine
and supplies for the slacks maker to test. Two samples of the slacks produced
are taken. Each pair of slacks has the seams tested in an application of force to
determine the breaking point (in lbs.) for the seam. The sample results are:
NARREND
29. The test question is: At the 0.05 level of significance, is the gluing of seams
better than sewing? What are the null and alternative hypotheses?

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.4

30. The test question is: At the 0.05 level of significance, is the gluing of seams
better than sewing? What is the value of the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z-test; -3.86

PTS: 1 OBJ: Section 11.4

31. The test question is: At the 0.05 level of significance, is the gluing of seams
better than sewing? What is the decision rule?

NARRBEGIN: Portfolio
An analyst is looking at two portfolios of common stocks in terms of the average
price-earnings ratio. He wishes to determine if there is a difference between the
two portfolios.
NARREND
37. State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.4

38. Determine the equality of the two population means.

ANS:
Because zero is included in the 99% confidence interval, we fail to reject H0 at
the 1% level of significance and conclude that the population means could be
equal.

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Marketing research

A marketing research firm is conducting a survey to determine if there is a
difference in consumer choice in the selection of two rival soft drinks. Those
surveyed were asked to rank the taste from 1-10 with 10 being the highest
rating. A summary of the survey follows:
NARREND
39. State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Real pop

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z-test; 2.40
PTS: 1 OBJ: Section 11.4

41. State the decision rule for 0.05 level of significance.

ANS:
to reject H0; If zfailzIf -1.96 < -1.96 or if z > 1.96, reject H0;

PTS: 1 OBJ: Section 11.4

42. What is the conclusion?

ANS:
Reject H0 and conclude that the true mean rank of the two soft drinks are not
equal

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Women drivers

In the past, young women drivers have maintained a better driving record than
young men drivers. An insurance company is concerned with the driving record
of its insured customers. Specifically, it conducts a test for the number of
speeding tickets received during the past year by drivers between the ages of
18 and 25.
NARREND
43. A test for the equality of average number of tickets per driver for the two
groups is desired. Use = 0.01. State the null and alternative hypothesis.

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.4

44. A test for the equality of average number of tickets per driver for the two
groups is desired. Use = 0.01. What is the value of the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z-test; 1.39

PTS: 1 OBJ: Section 11.4

45. A test for the equality of average number of tickets per driver for the two
groups is desired. Use = 0.01. What is the conclusion?

ANS:
Do not reject H0

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Chrysler corp

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.4

47. What is the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z-test; 0.373
PTS: 1 OBJ: Section 11.4

48. What is the conclusion?

ANS:
Do not reject H0 There is no sufficient evidence to conclude that Toyota compact
version gets much better gasoline mileage for in-city driving than any U.S. made
car.

PTS: 1 OBJ: Section 11.4

49. In testing the hypotheses:

H0:
H1: t
wo random samples from two normal populations produced the following
statistics: n1 = 50, = 35, s1 = 28, n2 = 50, = 30, s2 = 10. What conclusion can
we draw at the 5% significance level?

Appropriate test: ____________________

Test statistic = ____________________

Conclusion: ____________________________

ANS:
There is no reason to believe that the population variances are equal. Since both
sample sizes are larger than 30, we can use the z-test approximation. Rejection
region: |z| > 1.96
Test statistic: z = 1.189; Do not reject H0 and conclude that there is no
statistical evidence to show a significant difference between the population
means.

PTS: 1 OBJ: Section 11.4

NARRBEGIN: Golf ball

A new golf ball has been designed to improve driving distance off the tee when
compared to their market competitor. To test their new ball, nine golfers hit a
drive with the current ball and then hit another drive with the new ball. The
distance in yards for each golfer is shown in the following table.

Current Golf Ball

(Population 1) New Golf Ball
(Population 2)
212 215
236 228
250 256
243 264
250 248
235 255
230 239
225 218
220 239

NARREND
50. Use = 0.05. State the null and alternative hypothesis.

ANS:
d 0H0:

dH1: < 0

PTS: 1 OBJ: Section 11.5

51. Use = 0.05. State the decision rule in terms of the critical value.

ANS:
Reject if t < -1.86. Fail to reject if t -1.86.

PTS: 1 OBJ: Section 11.5

52. Use = 0.05. What is your conclusion?

ANS:
Since t = -1.789, we fail to reject H0 and conclude that the new golf ball does
not increase driving distance when compared to the current ball.
PTS: 1 OBJ: Section 11.5

NARRBEGIN: Fast Food

The general manager of a chain of fast food chicken restaurants wants to
determine how effective their promotional campaigns are. In these campaigns
“20% off” coupons are widely distributed. These coupons are only valid for one
week. To examine their effectiveness, the executive records the daily gross sales
(in $1,000s) in one restaurant during the campaign and during the week after
the campaign ends. The data is shown below.
NARREND
53. Can they infer at the 5% significance level that sales increase during the
campaign?

NARRBEGIN: Weight loss

A new diet program claims that clients will lose weight after 7 days on the
program. To validate their claim, they recorded the starting and ending weight of
11 individuals over a 7-day period. The results are shown in the following table.

Starting Weight Ending Weight

221 218
215 210
206 204
236 241
214 212
256 250
240 245
222 218
239 230
218 215
229 220

NARREND
58. State the null and alternative hypotheses.

ANS:
d 0H0:

dH1: > 0

PTS: 1 OBJ: Section 11.5

59. Use = 0.05. State the decision rule in terms of the critical value.

ANS:
If t 1.812, fail to reject H0. If t > 1.812, reject H0.

PTS: 1 OBJ: Section 11.5

60. Use = 0.05. State your conclusions.

ANS:
Since t = 2.141, we reject H0 and conclude that the new diet program does
reduce weight after 7 days.

PTS: 1 OBJ: Section 11.5

NARRBEGIN: SAT
A new SAT preparation program claims that students will improve their verbal
scores with a practice test after one month on the program. To validate their
claim, they recorded the starting and practice verbal SAT scores of 12
individuals after a one-month period. The results are shown in the following
table.

Starting SAT Score Practice SAT Score

450 460
390 390
425 430
510 500
520 525
440 420
550 570
610 625
490 510
475 485
535 540
500 500

NARREND
61. State the null and alternative hypotheses.

ANS:
d 0H0:

dH1: < 0

PTS: 1 OBJ: Section 11.5

62. Use = 0.01. State the decision rule in terms of the critical value.

ANS:
Reject if t < -2.718. Fail to reject if t -2.718.

PTS: 1 OBJ: Section 11.5

63. Use = 0.01. State your conclusions.

ANS:
Since t = -1.483, we fail to reject H0 and conclude that the new preparation
course does not improve verbal SAT scores after one month.

PTS: 1 OBJ: Section 11.5

NARRBEGIN: Population
In an effort to test the hypothesis that the proportion of home ownership in the
state of Delaware is different than the national proportion, the following data
was collected.

Population Number of Home Owners Sample Size

Delaware 310 500
Nation 390 600

NARREND
64. State the null and alternative hypotheses.

ANS:
Setting = the proportion of home ownership in Delaware and = the proportion of
home ownership in the nation,,

PTS: 1 OBJ: Section 11.6

65. Use = 0.01. State the decision rule in terms of the critical value.

ANS:
to reject H0; If zfail2.57zIf -2.57 < -2.57 or if z > 2.57, reject H0;

PTS: 1 OBJ: Section 11.6

66. Use = 0.01. State your conclusions in terms of the test statistic.

ANS:
Since z = -1.61, we fail to reject the null hypothesis and conclude that the
proportion of home ownership in Delaware is not different from that of the
nation.

PTS: 1 OBJ: Section 11.6

67. Use = 0.01. State your conclusions in terms of the p-value.

ANS:
Since the p-value = 0.107 and = 0.01, we fail to reject the null hypothesis and
conclude that the proportion of home ownership in Delaware is not different
from that of the nation.

PTS: 1 OBJ: Section 11.6

68. State the null and alternative hypotheses.

ANS:
Setting = the proportion of male smokers and = the proportion of female
smokers,,

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Smoking
In an effort to test the hypothesis that the proportion of males who smoke
cigarettes regularly is greater than the proportion of females who smoke
cigarettes regularly, the following data was collected.

Population Number Who Smoke Sample Size

Male 229 850
Female 180 775

NARREND
69. Use = 0.05. State the decision rule in terms of the critical value.

ANS:
Reject if z > 1.64. Fail to reject if z 1.64.

PTS: 1 OBJ: Section 11.6

70. Use = 0.05. State your conclusions in terms of the test statistic.

ANS:
Since z = 1.72, we reject the null hypothesis and conclude that the proportion of
male smokers is greater than the proportion of female smokers.

PTS: 1 OBJ: Section 11.6

71. Use = 0.05. State your conclusions in terms of the p-value..

ANS:
Since p-value = 0.042 and = 0.05, we reject the null hypothesis and conclude
that the proportion of male smokers is greater than the proportion of female
smokers.
PTS: 1 OBJ: Section 11.6

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z-test; 2.13

PTS: 1 OBJ: Section 11.6

78. What is the decision rule?

ANS:
Fail to reject H0 if z 1.645; Reject H0 if z > 1.645.

PTS: 1 OBJ: Section 11.6

79. What is the conclusion?

ANS:
Reject H0 The sample evidence suggests that ownership of VCR’s is higher for
households on a cable system.

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Textbook
A large textbook publisher is concerned about the sale of complimentary desk
copies of textbooks to wholesale book buyers. The publisher randomly samples
the faculty from two universities, A and B. Information provided by salespeople
suggests that the faculty at University A had copies of the publisher’s books that
had been shipped, whereas the faculty at University B seldomly had them. Let
be the proportion of faculty at University A who sell this publisher’s books and
be the proportion of faculty at University B who sell this publisher’s books. The
samples provide these data:

At the 0.05 significance level, is this publisher reasonably justified in saying

there is a higher proportion of faculty at University B who sell this publisher’s
complimentary books than at University A?
NARREND
80. State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.6

81. What is the value of the test statistic?

Appropriate test: ____________________

Test statistic = ____________________

ANS:
z test; z = -2.472

PTS: 1 OBJ: Section 11.6

82. State the decision rule.

ANS:
Fail to reject H0 if z -1.645; Reject H0 if z < -1.645.

PTS: 1 OBJ: Section 11.6

83. State the conclusion.

ANS:
Reject H0. There is sufficient evidence to conclude that there is a higher
proportion of faculty at University B who sell the publishers books

PTS: 1 OBJ: Section 11.6

NARRBEGIN: National Management Assoc

The National Management Association reports that during the past year, there
has been a substantial increase in the use of “flextime” in the work place. Last
year, a sample of 100 businesses was taken which indicated that 22% had
implemented the use of “flextime.” This year, a second survey of 100 showed
that 29% were using flextime. At the 0.05 level, does this represent an increase
in the proportion?
NARREND
84. State the null and alternative hypotheses.

H0: ____________________

ANS:
Do not reject H0 There has not been a significant increase in the proportion of
flextime.

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Ford Motor Co.
The Ford Motor Company, as part of its quality control program, began returning
to the supplier all shipments of steel that had defects or faulty chemistry. When
Ford began this program, the defective rate in 100 shipments was 9%. A recent
survey indicated that 2.2% in 136 shipments was defective. Does this represent
a significant improvement in the quality of the steel? Test at the 0.05 level.
NARREND
88. State the null and alternative hypotheses.

H0:____________________

H1: ____________________

ANS:
;

PTS: 1 OBJ: Section 11.6

89. What is the test statistic?

Appropriate test: ____________________

Test statistic = ______________________

ANS:
z-test; 2.35

PTS: 1 OBJ: Section 11.6

90. What is the conclusion?

ANS:
Reject H0 There is enough evidence to conclude that there is a significant
improvement in the quality of the steel.

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Politician
In an effort to test the hypothesis that the proportion of voters in the younger
than 40 year old age bracket who will vote for a particular politician is different
than the proportion voters in the above 40 age bracket, the following data was
collected.

Population Number Who Will Vote for Politician Sample Size

Below 40 348 700
Above 40 290 650

NARREND
91. Use = 0.10. State your conclusions in terms of the test statistic.

What is the p-value?

ANS:
Since z = 1.87, we reject the null hypothesis and conclude that the proportion of
voters in the younger than 40 year old age bracket who will vote for a particular
politician is different than the proportion voters in the above 40 age bracket.

p-value = 0.0614

PTS: 1 OBJ: Section 11.6

92. State the null and alternative hypotheses.

Use = 0.10. State the decision rule in terms of the critical value.

ANS:
Setting = the proportion of home ownership in Delaware and = the proportion of
home ownership in the nation,,

to reject H0; If zfail1.645zIf -1.645 < -1.645 or if z > 1.645, reject H0;

PTS: 1 OBJ: Section 11.6

NARRBEGIN: Production Line

A quality control inspector keeps a tally sheet of the number of acceptable and
unacceptable products that come off two different production lines. The
completed sheet is shown below.
NARREND
93. Can the inspector infer at the 5% significance level that production line 1 is
doing a better job than production line 2?
Hypotheses: ___________________________________

Test statistic = ________

Conclusion: ________________

Interpretation: __________________________________________________

ANS:
21 –  0, H1: 2 1 – H0: > 0,
Rejection region: z > 1.645, Test statistic z = 0.993; Do not reject H0; There is
insufficient evidence to conclude that Production Line 1 is doing better than
Production Line 2.

PTS: 1 OBJ: Section 11.6

94. Estimate with 95% confidence the difference in population proportions.

ANS:
0.0915 = (-0.0473, 0.1357)0.0442

PTS: 1 OBJ: Section 11.6

95. The A-1 Video Rental has run two specials in the local newspaper. One was a
two-for-one rental for Tuesday through Thursday. The second was for $1 off on
Friday and Saturday. A computer output is shown below:

Determine at the 0.05 level if the standard deviations of the populations are
equal.

Test statistic = ____________________

Conclusion: ____________________

ANS:
The test statistic of F = 1.178 is less than the critical value of 3.05; Do not reject
H0 and conclude that the population standard deviations could be equal.

PTS: 1 OBJ: Section 11.7

96. Random samples from two normal populations produced the following
statistics: n1 = 16, s12 = 55, n2 = 14, s22 = 118. Is there enough evidence at
the 10% significance level to infer that the two population variances differ?

Hypotheses: ____________________

Test statistic = ____________________

Conclusion: ____________________

ANS:
22, 12 22, H1: 12 = H0:
Rejection region: F> F(0.05, 13, 15) = 2.48; Test statistic: F = 2.145; Do not
reject H0 and conclude that there is no sufficient statistical evidence to infer
that the two population variances differ.

PTS: 1 OBJ: Section 11.7

97. The number of degrees of freedom associated with a pooled-variance t-test

is _________________________.

ANS:

PTS: 1 OBJ: Section 11.2

ESSAY

1. When testing dependent samples, we test for only one variable. What is it?

ANS:
d = Difference between measurements

PTS: 1 OBJ: Section 11.1

2. There are three different methods for comparing the means of two
independent samples. What are they?

ANS:
The three methods are: the pooled-variances t-test, the unequal-variances t-
test, and the z-test.
PTS: 1 OBJ: Section 11.1

Chapter 12. Analysis of

Variance Tests
Test Bank

TRUE/FALSE

1. True or False
Analysis of variance (ANOVA) is a set of techniques that allow us to compare two
or more sample means at the same time.

ANS: T PTS: 1 OBJ: Section 12.1

2. True or False
In ANOVA, the variation between groups represents random error from the
sampling process.

ANS: F PTS: 1 OBJ: Section 12.2

3. True or False
Comparing the variation between the groups to the variation within the groups
is the basis of ANOVA.

ANS: T PTS: 1 OBJ: Section 12.2

4. True or False
The ANOVA model requires that the sample size for each treatment be equal.

ANS: F PTS: 1 OBJ: Section 12.2

5. True or False
An assumption of the ANOVA model is that the population distributions are
normal.

ANS: T PTS: 1 OBJ: Section 12.3

6. True or False
The one-way ANOVA is also referred to as the one-factor, completely randomized
design, since the treatments are randomly assigned to all of the persons or
other test units in the experiment.

ANS: T PTS: 1 OBJ: Section 12.3

7. True or False
When there are two treatment groups, one-way ANOVA is equivalent to the
pooled-variances t-test.

ANS: T PTS: 1 OBJ: Section 12.3

8. True or False
Three racquetball players, a beginner, an experienced, a professional, have
been randomly selected from the membership of a large city racquetball club.
Using the same ball, each person hits three serves, one with each of five racquet
models, with the five racquet models selected randomly. Each serve is clocked
with a radar gun and the result recorded. Among ANOVA models, this setup is
most like the two-way ANOVA.

ANS: F PTS: 1 OBJ: Section 12.4

9. True or False
In the randomized block design ANOVA, test units are first arranged in similar
groups after the treatments are assigned.

ANS: F PTS: 1 OBJ: Section 12.4

10. True or False

Using the randomized block design allows the reduction of the amount of error
variation.

ANS: T PTS: 1 OBJ: Section 12.4

11. True or False

In the randomized block design , there is just one observation or measurement
for each block-treatment combination.
ANS: T PTS: 1 OBJ: Section 12.4

12. True or False

A study will be undertaken to examine the effect of two kinds of background
music and of two assembly methods on the output of workers at a fitness shoe
factory. Two workers will be randomly assigned to each of four groups, for a total
of eight in the study. Each worker will be given a headphone set so that the
music type can be controlled. The number of shoes completed by each worker
will be recorded. Does the kind of music or the assembly method or a
combination of music and method affect output? The ANOVA model most likely
to fit this situation is the one-way analysis of variance.

ANS: F PTS: 1 OBJ: Section 12.5

13. True or False

In the randomized block design, interaction is present when the effect of a
treatment depends on the block to which it has been administered.

ANS: T PTS: 1 OBJ: Section 12.4

14. True or False

Randomized block ANOVA examines interactions between different levels of the
independent variables.

ANS: F PTS: 1 OBJ: Section 12.5

15. True or False

In ANOVA, the independent variable must be quantitative.

ANS: F PTS: 1 OBJ: Section 12.6

16. True or False

Basic to ANOVA is the comparison of variation between samples versus the
amount of variation within the samples. The test statistic is an F-ratio in which
the numerator reflects variation within the samples and the denominator
reflects the variation between them.

ANS: F PTS: 1 OBJ: Section 12.6

17. True or False
In ANOVA, if the calculated F-statistic exceeds the critical F for a given test, the
null hypothesis of equal population means is rejected.

ANS: T PTS: 1 OBJ: Section 12.6

18. True or False

In two-way ANOVA, it is not appropriate to refer to the factor levels as
treatments, since each combination of their levels constitutes a separate
treatment.

ANS: T PTS: 1 OBJ: Section 12.6

19. True or False

The two-way ANOVA examines the main effects of the levels of both factors as
well as interaction effects associated with the combinations of their levels.

ANS: T PTS: 1 OBJ: Section 12.6

20. True or False

In two-way ANOVA, significance tests include those for the main effects of each
factor, but not for interaction effects between the combinations of factor levels.

ANS: F PTS: 1 OBJ: Section 12.6

MULTIPLE CHOICE

1. A balanced experiment requires that:

a. at least one sample equal size is 30.
b. the number of treatments equals the number of samples.
c. an equal number of persons or test units receives each treatment.
d. at least two treatment groups be used.
e. at least two samples are paired.
ANS: C PTS: 1 OBJ: Section 12.2

2. Given the significance level 0.01, the F-value for the degrees of freedom, df =
(7,3) is:
a. 8.45.
b. 27.67.
c. 5.89.
d. 14.62.
e. 38.22.
ANS: B PTS: 1 OBJ: Section 12.3

3. The variation that reflects the effect of the factor levels is known as the
a. variation within the groups.
b. variation between the groups.
c. error mean square.
d. sampling error.
e. interaction effect.
ANS: B PTS: 1 OBJ: Section 12.2

4. The variation that reflects the random error from the sampling process is
known as the
a. variation within the groups.
b. variation between the groups.
c. treatment mean square.
d. interaction effect.
e. treatment sum of squares.
ANS: A PTS: 1 OBJ: Section 12.2

5. The one-way ANOVA model assumes that each individual observation is

considered to be the sum of the overall population mean for all the treatments
plus the effect of the treatment plus
a. the effect of the block.
b. the effect of the interaction.
c. the effect of the level.
d. the random error associated with the sampling process.
ANS: D PTS: 1 OBJ: Section 12.3

6. In using the ANOVA models, the assumptions made about the data are:
a. the samples are independent.
b. the population variances are equal.
c. the population distributions are normal.
d. A, B, and C are all assumptions made about the data.
e. the samples are dependent.
ANS: D PTS: 1 OBJ: Section 12.3

7. Two samples of ten each from the male and female workers of a large
company have been taken. The data involved the wage rate of each worker. To
test whether there is any difference in the average wage rate between male and
female workers a pooled-variances t-test will be considered. Another test option
to consider is ANOVA. The most likely ANOVA to fit this test situation is the:
a. one-way analysis of variance.
b. randomized block design.
c. two-way analysis of variance.
d. simple regression model.
e. chi-square test for independence.
ANS: A PTS: 1 OBJ: Section 12.3

8. The calculated value of F in a one-way analysis is 8.23. The numerator

degrees of freedom and denominator degrees of freedom are 4 and 8,
respectively. The most accurate statement to be made about the p-value is:
a. p-value > 0.05.
b. 0.05 > p-value > 0.025.
c. p-value > 0.01.
d. 0.01 > p-value.
e. 0.025 > p-value > 0.01.
ANS: D PTS: 1 OBJ: Section 12.3

9. The numerator or MSTR degrees of freedom are 4 and the denominator or

MSE degrees of freedom are 20. The total number of observations in the
completely randomized design must equal:
a. 24.
b. 20.
c. 19.
d. 25.
e. 80.
ANS: D PTS: 1 OBJ: Section 12.3
10. A survey will be conducted to compare the United Way contributions made
by sales people from three county retail corporations. Sales people are to be
randomly selected from each of the three corporations and the dollar amounts
of their contribution recorded. The ANOVA model most likely to fit this situation
is the:
a. one-way analysis of variance.
b. randomized block design.
c. two-way analysis of variance.
d. simple regression model.
e. multiple regression model.
ANS: A PTS: 1 OBJ: Section 12.3

11. One-way ANOVA is applied to three independent samples having means 10,
13, and 18, respectively. If each observation in the third sample were increased
by 30, the value of the F-statistic would:
a. increase.
b. decrease.
c. remain unchanged.
d. increase by 30.
ANS: A PTS: 1 OBJ: Section 12.3

12. The F-statistic in a one-way ANOVA represents the:

a. variation between the treatments plus the variation within the treatments.
b. variation within the treatments minus the variation between the treatments.
c. variation between the treatments divided by the variation within the
treatments.
d. variation within the treatments divided by the variation between the
treatments.
ANS: C PTS: 1 OBJ: Section 12.3

13. One-way ANOVA is performed on three independent samples with n1 = 6, n2

= 7, and n3 = 8. The critical value obtained from the F-table for this test at the
2.5% level of significance equals:
a. 3.55.
b. 39.45.
c. 4.56.
d. 29.45.
ANS: C PTS: 1 OBJ: Section 12.3

14. One-way ANOVA is performed on independent samples taken from three

normally distributed populations with equal variances. The following summary
statistics were calculated:

The grand mean equals:

a. 50.0.
b. 52.0.
c. 52.3.
d. 53.0.
ANS: C PTS: 1 OBJ: Section 12.3

15. The distribution of the test statistic for analysis of variance is the:
a. normal distribution.
b. student t-distribution.
c. F-distribution.
d. Poisson distribution.
ANS: C PTS: 1 OBJ: Section 12.3

16. One-way ANOVA is applied to independent samples taken from three

normally distributed populations with equal variances. The following summary
statistics were calculated:

The within-treatments variation equals:

a. 137.
b. 460.
c. 154.
d. 60.
ANS: A PTS: 1 OBJ: Section 12.3

17. In one-way ANOVA, suppose that there are five treatments with n1 = n2 =
n3 = 5, and n4 = n5 = 7. Then the mean square for error, MSE, equals:
a. SSE / 4.
b. SSE / 29.
c. SSE / 24.
d. SSE / 5.
ANS: C PTS: 1 OBJ: Section 12.3

18. One-way ANOVA is applied to independent samples taken from three

normally distributed populations with equal variances. The following summary
statistics were calculated:

The between-treatments variation equals:

a. 460.
b. 688.
c. 560.
d. 183.
ANS: C PTS: 1 OBJ: Section 12.3

19. Consider the following partial ANOVA table:

The numerator and denominator degrees of freedom (identified by asterisks)

are, respectively,
a. 4 and 15.
b. 3 and 16.
c. 15 and 4.
d. 16 and 3.
ANS: B PTS: 1 OBJ: Section 12.3

20. Consider the following ANOVA table:

The number of treatments is:

a. 13.
b. 5.
c. 3.
d. 33.
ANS: C PTS: 1 OBJ: Section 12.3

21. In a completely randomized design for ANOVA, the number of degrees of

freedom for the numerator and denominator are 4 and 25, respectively. The
total number of observations must equal:
a. 29.
b. 25.
c. 30.
d. 24.
ANS: C PTS: 1 OBJ: Section 12.3

22. Consider the following ANOVA table:

The number of observations in all samples is:

a. 25.
b. 29.
c. 30.
d. 32.
ANS: C PTS: 1 OBJ: Section 12.3

23. The number of degrees of freedom for the denominator in a one-way ANOVA
test for 4 population means with 15 observations sampled from each population
is:
a. 60.
b. 19.
c. 56.
d. 45.
ANS: C PTS: 1 OBJ: Section 12.3

24. In employing the randomized block design, the primary interest lies in:
a. increasing the treatment sum of squares (SSTR).
b. reducing the block sum of squares (SSB).
c. improving the significance of any differences among treatment groups.
d. reducing the total sum of squares (SST).
e. increasing the total sum of squares (SST).
ANS: C PTS: 1 OBJ: Section 12.4

25. In employing the randomized block design, the expected effect is to:
a. increase the treatment sum of squares (SSTR).
b. reduce the error sum of squares (SSE).
c. improve the significance of any differences within the treatment groups.
d. reduce the total sum of squares (SST).
e. increase the error sum of squares (SSE).
ANS: B PTS: 1 OBJ: Section 12.4

26. A randomized block design ANOVA has two treatments. The test to be
performed in this procedure is equivalent to:
a. dependent samples z-test.
b. dependent samples t-test.
c. independent samples z-test.
d. independent samples t-test.
e. Spearman rank correlation test.
ANS: B PTS: 1 OBJ: Section 12.4

27. A randomized block design ANOVA has five treatments and four blocks. The
computed test statistic (value of F) is 4.35. With a 0.05 significance level, the
appropriate table value and conclusion will be:
a. 14.37: accept the null hypothesis.
b. 3.11: accept the null hypothesis.
c. 3.26: accept the null hypothesis.
d. 2.87: reject the null hypothesis.
e. 3.26: reject the null hypothesis.
ANS: E PTS: 1 OBJ: Section 12.4

28. A randomized block experiment having five treatments and six blocks
produced the following values: SSTR = 287, SST = 1,446, SSE = 180. The value
of SSB must be:
a. 30.
b. 979.
c. 467.
d. 20.
e. 107.
ANS: B PTS: 1 OBJ: Section 12.4
29. The randomized block design with two treatments is equivalent to a non-
directional:
a. independent samples z-test.
b. independent samples t-test.
c. dependent samples z-test.
d. dependent samples t-test.
e. chi-square test for independence.
ANS: D PTS: 1 OBJ: Section 12.4

30. The F-test of the randomized block design of the analysis of variance
requires that the random variable of interest must be normally distributed and
the population variances must be equal. When the random variable is not
normally distributed, we can use:
a. one-way ANOVA.
b. two-way ANOVA.
c. Friedman test.
d. all of these.
ANS: C PTS: 1 OBJ: Section 12.4

31. Three tennis players, a beginner, an intermediate, and advanced, have been
randomly selected from the membership of a racquet facility club in a large city.
Using the same tennis ball, each player hits ten serves, one with each of three
racquet models, with the three racquet models selected randomly. The speed of
each serve is measured with a machine and the result recorded. Among the
ANOVA models listed below, the most likely model to fit this situation is the:
a. one-way ANOVA.
b. two-way ANOVA.
c. randomized block design.
d. none of these.
ANS: C PTS: 1 OBJ: Section 12.4

32. A randomized block design with 4 treatments and 5 blocks produced the
following sum of squares values: SST = 1951, SSTR = 349, SSE = 188. The value
of SSB must be:
a. 1414.
b. 537.
c. 1763.
d. 1602.
ANS: A PTS: 1 OBJ: Section 12.4

33. In a two-way ANOVA, there are 3 levels for factor A and 4 levels for factor B,
and three observations within each cell. The number of treatments in this
experiment will be:
a. 36.
b. 9.
c. 12.
d. 18.
e. 6.
ANS: C PTS: 1 OBJ: Section 12.5

34. In a two-way ANOVA, there are 5 levels for factor A and 4 levels for factor B,
and three observations within each cell. The number of treatments in this
experiment will be:
a. 20.
b. 9.
c. 12.
d. 18.
e. 6.
ANS: A PTS: 1 OBJ: Section 12.5

35. When the effect of a level for one factor depends on which level of the other
factor is present, use:
a. one-way analysis of variance.
b. randomized block design.
c. two-way analysis of variance.
d. simple regression model.
e. paired sample model.
ANS: C PTS: 1 OBJ: Section 12.5
36. The equation: SST = SSA + SSB + SSAB + SSE, applies to which ANOVA
model?
a. One-way ANOVA
b. Two-way ANOVA
c. Randomized block design
d. All of these
ANS: B PTS: 1 OBJ: Section 12.5

37. In a two-way ANOVA, there are 4 levels for factor A, 5 levels for factor B, and
3 observations for each combination of factor A and factor B levels. The number
of treatments in this experiment equals:
a. 60.
b. 25.
c. 20.
d. 16.
ANS: C PTS: 1 OBJ: Section 12.5

38. Which of the following statements are not true regarding the randomized
block design?
a. In this design, persons or test units are first arranged into similar groups, or
blocks, then the treatments are randomly assigned.
b. Blocking helps reduce error variation by ensuring that the treatment groups
are comparable in terms of the blocking variable.
c. This design assumes that interactions exist between the blocks and the
treatments.
d. Although the blocking variable can be viewed as representing a second
independent variable, it is introduced solely for the purpose of controlling error
variation.
e. All of these statements are true.
ANS: C PTS: 1 OBJ: Section 12.6

NUMERIC RESPONSE

NARRBEGIN: Annuity
A large annuity company holds many industry group stocks. Among the
industries are banks, business services and construction. Seven companies from
each industry group are randomly sampled to test the hypothesis that the mean
price per share is the same among industries. The data are:
NARREND
1. Compute the mean square for the between-group variation (MSTR).

ANS: 520.33

PTS: 1 OBJ: Section 12.3

2. Compute the appropriate table value to use as the critical value at the 2.5%
significance level.

ANS: 4.56

PTS: 1 OBJ: Section 12.3

3. Compute the mean square error (MSE).

ANS: 151.67

PTS: 1 OBJ: Section 12.3

ANS: 70
PTS: 1 OBJ: Section 12.3

ANS: 3.01

PTS: 1 OBJ: Section 12.5

46. What is the critical F for the 0.05 level for the interaction effects between
Factor A and Factor B.

ANS: 2.51

PTS: 1 OBJ: Section 12.5

COMPLETION

1. A(n) ____________________ variable is the variable for which a value is

measured or observed.

ANS: dependent

PTS: 1 OBJ: Section 12.2

2. A(n) ____________________ variable is a variable that is observed or controlled

for the purpose of determining its effect on another variable.

ANS: independent

PTS: 1 OBJ: Section 12.2

3. If we examine two or more independent samples to determine if their
population means could be equal, we are performing
________________________________________.

ANS:
one-way analysis of variance
ANOVA

PTS: 1 OBJ: Section 12.3

4. If we simultaneously examine the effects of two factors on the dependent

variable, along with the effects of interactions between the different levels of
those factors, we are performing ________________________________________.

ANS:
Two-way analysis of variance
ANOVA

PTS: 1 OBJ: Section 12.5

5. The starting point for ANOVA is often an experiment in which the goal is to
determine whether various levels of an independent variable, or factor, might be
exerting different effects on the dependent variable, or measurement. When
there is only one factor in an experiment, each factor level can be referred to as
a ____________________.

ANS: treatment

PTS: 1 OBJ: Section 12.6

6. In the one-way ANOVA, there is just one factor, and the null hypothesis is that
the population means are equal for the respective treatments, or factor levels.
Treatments are randomly assigned to the persons or test units in the
experiment, so this method is also referred to as the
___________________________________ ANOVA.

ANS: completely randomized

PTS: 1 OBJ: Section 12.6

7. When there are only two treatments, the one-way ANOVA is equivalent to the
nondirectional ______________________________ t-test.

ANS: pooled-variances

MATCHING

Match each term with its definition:

a. SST
b. SSTR
c. SSE
d. MSTR
e. MSE
1. Total amount of variation
2. Sum of squares value reflecting variation between individual treatment
means and the overall mean for all treatments

3. Error sum of squares

4. Mean square for the between-group variation

5. Mean square for within-group variation

1. ANS: A PTS: 1 OBJ: Section 12.3

2. ANS: B PTS: 1 OBJ: Section 12.3

3. ANS: C PTS: 1 OBJ: Section 12.3

4. ANS: D PTS: 1 OBJ: Section 12.3

5. ANS: E PTS: 1 OBJ: Section 12.3

SHORT ANSWER

1. A university vice president for academic affairs (VPAA) collects data showing
the number of papers published over the past academic year for a random
sample of professors in the College of Arts and Sciences. He does the same for a
random sample of 8 professors in the College of Education, and for a random
sample of 10 professors in the College of Business. Does this represent a
designed experiment? Explain.

ANS:
No; This is not a random experience since the university VPAA has no control
over which professors are in a particular college. The professors were not
randomly assigned to the colleges.

PTS: 1 OBJ: Section 12.2

2. Thirty finance students are randomly assigned to two different sections of a

financial management class. Each section ends up consisting of 15 students. In
one of the sections, computer – assisted instruction and review software is
utilized; in the other section, it is not. All students are given the same final
examination at the end of the semester. Does this represent a designed
experiment? Explain.

ANS:
Yes; This experiment represents a designed experiment since the two
treatments (methods of teaching) are randomly assigned to the students.

PTS: 1 OBJ: Section 12.2

H0: ____________________

H1: ___________________________________

ANS:
; The population means are not equal

PTS: 1 OBJ: Section 12.3

4. Compute the test statistic.

Test statistic = =

ANS:
F; 3.431

PTS: 1 OBJ: Section 12.3

5. What is the conclusion?

ANS:
Do not reject H0

PTS: 1 OBJ: Section 12.3

NARRBEGIN: Alumni clubs
Three alumni clubs for a university have members who contribute to the
university athletic program. The amount of contribution (in dollars) for six
contributors randomly selected from each city to test the hypothesis that the
mean contribution is the same among alumni clubs is given below, followed by
the total for each city:
NARREND
6. State the null and alternative hypotheses.

H0: ____________________

H1: ______________________________________________

ANS:
; At least one of the population means is not equal

PTS: 1 OBJ: Section 12.3

7. Compute the test statistic.

Test statistic = =

ANS:
F; 2.468

PTS: 1 OBJ: Section 12.3

8. What is the conclusion?

ANS:
Do not reject H0

PTS: 1 OBJ: Section 12.3

9. A consumer research organization is attempting to determine whether there

is any difference in mpg for fully loaded 22-foot trucks leased from three
companies, A-Haul, Bertz, and Glyder. Five of these trucks are rented from each
company. Each truck is driven with the same weight cargo over the same 200
mile route and the mpg recorded. The results of the test are:
Perform the hypothesis test: H0: (Average mpg is the same for all three rental
companies)

H1: Not all of the mean mpg is the same for the three companies An = 0.05 is
used by the consumer research organization. Is there any difference in mean
mpg?

Test statistic = =

Conclusion: ____________________

Interpretation: ________________________________________________________

ANS:
SST = 63.340, SSTR = 28.948, SSE = 34.392; Critical value:F(2,12,0.05) = 3.89
Test statistic: F= 5.05; Reject H0; Mean mpg is NOT equal in all three companies

PTS: 1 OBJ: Section 12.3

NARRBEGIN: Model
A consumer group is testing the gas mileage of 3 different models of cars.
Several cars were driven 1000 miles and the gas mileage was recorded in the
following table.

Model 1 Model 2 Model 3

22.6 19.6 25.3
20.9 22.3 21.6
23.6 20.5 20.5
21.9 17.0 24.6
22.0 17.6 22.7
21.1 19.2 20.5
18.7 20.9

NARREND
10. State the null and alternative hypotheses.

ANS:
H0:
H1: The population means are not all equal
PTS: 1 OBJ: Section 12.3

11. Calculate the treatment mean square and the error mean square.

Calculate the test statistic.

ANS:
MSTR = 14.71
MSE = 3.32
F = 4.430

PTS: 1 OBJ: Section 12.3

12. Using = 0.05, state the decision rule in terms of the critical value.

ANS:
If F > 3.59, we reject the null hypothesis. If F 3.59, we fail to reject the null
hypothesis.

PTS: 1 OBJ: Section 12.3

13. Using = 0.05, state the conclusion.

PTS: 1 OBJ: Section 12.3

17. Fill in the blanks (identified by asterisks and numbers) in the following partial
ANOVA table:

Source of Variation SS df MS F
Treatments (*1) (*2) 195 (*3)
Error 625 (*4) (*5)
Total 1600 25
ANS:
*1 = 975; *2 = 5; *3 = 6.24; *4 = 20, *5 = 31.25

PTS: 1 OBJ: Section 12.3

18. A pharmaceutical manufacturer has been researching new formulas to

provide quicker relief of minor pains. His laboratories have produced three
different formulas, which he wanted to test. Fifteen people who complained of
minor pains were recruited for an experiment. Five were given formula 1, five
were given formula 2, and the last five were given formula 3. Each was asked to
take the medicine and report the length of time until some relief was felt. The
results are shown below. Do these data provide sufficient evidence to indicate
that differences in the time of relief exist among the three formulas? Use = .05.

Test statistic = =

Critical Value = ____________________

Conclusion: ____________________

Interpretation: ______________________________________________

ANS:
Source of variation SS df MS F P-value F critical
Treatments 36.4 2 18.2 5.2 .0236 3.885
Error 42.0 12 3.5
Total 78.4 14

3; H1: The population means are not all equal2 = 1 = H0:

F = 5.2; Reject H0; The population mean times are NOT all equal

PTS: 1 OBJ: Section 12.3

NARRBEGIN: Courses
A father and his two sons played golf at four different courses with the following
scores:

Dad Sam Jeff

Course 1 92 86 81
Course 2 95 86 87
Course 3 88 81 83
Course 4 90 87 90

PTS: 1 OBJ: Section 12.4

30. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

Calculate the test statistic.

ANS:
F = 1.773

PTS: 1 OBJ: Section 12.4

31. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

State the decision rule in terms of the critical value.

What is your conclusion?

ANS:
If F > 3.49, we reject the null hypothesis. If F 3.49, we fail to reject the null
hypothesis.

Since F 3.49, we fail to reject the null hypothesis and conclude that we do not
have enough evidence to claim that the average number of customers per day
between four different stores are not equal.

PTS: 1 OBJ: Section 12.4

NARRBEGIN: Lawn Fertilizer

To test the effectiveness of three different types of lawn fertilizer, each type was
applied to six different lawns. The same size patch of lawn was mowed for all 18
test units and the grass clippings were weighed. The weight in pounds are
shown in the following table.
Fertilizer 1 Fertilizer 2 Fertilizer 3
Lawn 1 10.3 11.7 8.2
Lawn 2 8.6 12.0 8.9
Lawn 3 8.2 9.3 10.7
Lawn 4 10.6 10.5 9.3
Lawn 5 9.1 9.8 10.4
Lawn 6 8.2 12.4 9.6

NARREND
32. State the null and alternative hypotheses to test for a difference in average
number of customers per day for each store.

ANS:
H0:
H1: The average weights of grass clippings for each fertilizer are not all equal

PTS: 1 OBJ: Section 12.4

33. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

Calculate the block sum of squares.

ANS:
SSB = 1.14

PTS: 1 OBJ: Section 12.4

34. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

Calculate the error sum of squares and the error mean square.

ANS:
SSE = 16.76
MSE = 1.68
PTS: 1 OBJ: Section 12.4

35. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

Calculate the treatment sum of squares and the treatment mean square.

ANS:
SSTR = 10.71
MSTR = 5.36

PTS: 1 OBJ: Section 12.4

36. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

Calculate the test statistic.

ANS:
F = 3.197

PTS: 1 OBJ: Section 12.4

37. Develop a randomized block design to test for the difference between the
average number of customers per day between four different stores using =
0.05 and using the days as the blocking variable.

State the decision rule in terms of the critical value.

What is your conclusion?

ANS:
If F > 4.10, we reject the null hypothesis. If F 4.10, we fail to reject the null
hypothesis.

Since F 4.10, we fail to reject the null hypothesis and conclude that we do not
have enough evidence to claim that the average weight of the grass clippings
for each type of fertilizer are not equal.
PTS: 1 OBJ: Section 12.4

NARRBEGIN: Shelf Level

H1: Mean sales of shelf levels are not equal

Test statistic = =

Critical Value = ____________________

Conclusion: ________________________

Interpretation: ______________________________________

ANS:
Critical value: F(0.05, 2, 6) = 5.14; Test statistic: F = 17.527; Reject H0; There is
a difference in the mean sales for the shelf heights.

PTS: 1 OBJ: Section 12.4

39. Test the following hypotheses at the 5% significance level:

H0: Mean sales of stores are equal

H1: Mean sales of stores are not equal

Test statistic = =

Critical Value = ____________________

Conclusion: ________________________
Interpretation: _______________________________________

ANS:
Critical value: F(0.05, 3, 6) = 4.76; Test statistic: F = 57.092. Reject H0; There is
a difference in mean sales for the stores.

PTS: 1 OBJ: Section 12.4

40. A randomized block design experiment produced the following data.

A) Test to determine whether the treatment means differ. (Use = 0.05.)

Test statistic = =

Critical Value = ____________________

Conclusion: ____________________

Interpretation: _______________________________________

B) Test the effectiveness of the blocking variable. (Use = 0.05.)

Test statistic = =

Critical Value = ____________________

Conclusion: ____________________

Interpretation: ________________________________________

ANS:
Source of variation SS df MS F P-value F critical
Treatments 29.733 2 14.867 6.511 .02097 4.459
Blocks 336.933 4 84.233 36.891 0.00335 3.838
Error 18.267 8 2.283
Total 384.933 14

3; H1: The population means are not equal2 = 1 = H0:

F= 6.511;Critical value = 4.459; Reject H0; The population means are NOT
equal;
H0: The levels of the blocking variable are equal in their effect;
H1: At least one level has a different effect from the others
F;=36.891; Critical value = 3.838; Reject H0; The blocking variable is effective

PTS: 1 OBJ: Section 12.4

NARRBEGIN: Music
A study to examine the effect of music type and assembly method on the
productivity of workers on a production line for electronic circuit boards
produced the following results:
NARREND
41. Test for the main effects of factor A at the 5% significance level.

ANS:
i = 0 (No level of factor A has an effect)H0:
0 (At least one level of factor A has an effect)i H1:

Test statistic: F= 7.69;Critical value: F(0.05, 1, 4) = 7.71; Do not reject H0; No

level of factor A has an effect.

PTS: 1 OBJ: Section 12.5

42. Test for the main effects of factor B at the 5% significance level.

ANS:
i = 0 (No level of factor B has an effect)H0:
0 (At least one level of factor B has an effect)i H1:

Test statistic: F= 52.0;Critical value: F(0.05, 1, 4) = 7.71; Reject H0 At least one

software packages is the best for his students. He believes that the time (in
hours) it takes a student to master a particular software may be influenced by
gender. A 3 X 2 factorial experiment with three replicates was designed, as
shown below:

Is there sufficient evidence at the 10% significance level to infer that the time it
takes a student to master software and the gender of the student interact?

ANS:
Source of variation SS df MS F P-value F critical
Software 34.778 2 17.389 0.978 0.4041 2.807
Gender 53.389 1 53.389 3.003 0.1087 3.177
Interaction 26.778 2 13.389 0.753 0.4919 2.807
Error 213.333 12 17.778
Total 328.278 17

H0: Software type and gender do not interact; H1: Software and gender do
interact
F= 0.753;Critical value = 2.807; Do not reject H0; Software and gender do NOT
interact

PTS: 1 OBJ: Section 12.5

50. In a two-way ANOVA experiment, factor A is operating on 3 levels, factor B is

operating on 4 levels, and there are 2 replications per cell. How many
treatments are there in this experiment? Explain.

ANS:
12; A treatment consists of a combination of one level of factor A and one level
of factor B.

PTS: 1 OBJ: Section 12.5

ESSAY

7. What assumptions are required in using the randomized block design?

ANS:
a. The one observation in each treatment-block combination has been randomly
selected from a normally distributed population. b. The variances are equal for
the values in the respective populations. c. There is no interaction between the
blocks and treatments.

PTS: 1 OBJ: Section 12.4

8. How does the randomized block design differ from the one-way, completely
randomized design?
ANS:
In the one-way ANOVA, the treatments are randomly assigned to the test units.
In the randomized block design, the test units are first arranged into similar
groups and then the treatments are randomly assigned.

PTS: 1 OBJ: Section 12.4

9. What is the purpose of two-way ANOVA?

ANS:
The purpose two-way ANOVA is to simultaneously examine the effects of two
factors on a dependent variable and the effect of interactions between the
different levels of these two factors.

PTS: 1 OBJ: Section 12.5

10. In the two-way ANOVA, what is meant by the term “replications”?

2. True or False
The normal distribution can be used to examine whether two nominal variables
could be independent of each other.

ANS: F PTS: 1 OBJ: Section 13.1

3. True or False
Like the critical values for the normal distribution and the t-distribution, the
critical values for the chi-square distribution can be either positive or negative.

ANS: F PTS: 1 OBJ: Section 13.2

4. True or False
The chi-square distribution is skewed to the left (negatively skewed), but as
degrees of freedom increase, it approaches the shape of the binomial
distribution.

ANS: F PTS: 1 OBJ: Section 13.2

5. True or False
The goodness-of-fit chi-square test is a two-tailed test.

ANS: F PTS: 1 OBJ: Section 13.3

6. True or False
In a goodness-of-fit chi-square test, a large amount of discrepancy between the
frequencies that are observed and those that are expected tend to cause us to
fail to reject the null hypothesis.

ANS: F PTS: 1 OBJ: Section 13.3

7. True or False
In goodness-of-fit tests, the chi-square analysis is applied for the purpose of
examining whether two nominal-scale variables are related to each other.

ANS: F PTS: 1 OBJ: Section 13.3

8. True or False
The goodness-of-fit test requires that the sample data be arranged into
categories that are both mutually exclusive and exhaustive.

ANS: T PTS: 1 OBJ: Section 13.3

9. True or False
The purpose of the chi-square analysis to test the independence of two variables
is to determine the exact nature of the relationship between two ratio variables.

ANS: F PTS: 1 OBJ: Section 13.4

10. True or False

By using chi-square analysis, we can compare two or more sample proportions
at the same time.

ANS: T PTS: 1 OBJ: Section 13.5

11. True or False

For all practical purposes, the test for equality of proportions is really just a
special case for the independence of two variables.

ANS: T PTS: 1 OBJ: Section 13.5

12. True or False

Since the sample variance is the point estimate for the population variance, the
confidence interval for the population variance will be the sample variance plus
or minus a fixed quantity.

ANS: F PTS: 1 OBJ: Section 13.6

13. True or False

Although the chi-square distribution is continuous, it is used to analyze discrete
(counts) data.

ANS: T PTS: 1 OBJ: Section 13.6

14. True or False

In order to use the chi-square distribution to construct confidence intervals and
carry out hypothesis tests regarding the value of a population variance, an
important assumption to be made is that the population is chi-square
distributed.

ANS: F PTS: 1 OBJ: Section 13.6

MULTIPLE CHOICE

1. With larger and larger numbers of categories in chi-square tests, the chi-
square distribution takes on the shape of the:
a. Poisson distribution.
b. t-distribution.
c. normal distribution.
d. F-distribution.
e. binomial distribution.
ANS: C PTS: 1 OBJ: Section 13.2

2. A chi-square test for independence with 8 degrees of freedom results in a test

statistic of 18.21. Using the chi-square table, the most accurate statement that
can be made about the p-value for this test is that:
a. p-value > 0.20.
b. 0.025 > p-value > 0.01.
c. 0.05 > p-value > 0.025.
d. 0.10 > p-value > 0.05.
e. 0.20 > p-value > 0.10.
ANS: B PTS: 1 OBJ: Section 13.2

3. The area to the right of a chi-square value is 0.025. For 5 degrees of freedom,
the table value is:
a. 12.833.
b. 15.086.
c. 11.07.
d. 11.143.
e. 16.182.
ANS: A PTS: 1 OBJ: Section 13.2
4. When the number of degrees of freedom is small, the shape of the chi-square
distribution is
a. symmetrical.
b. uniform.
c. positively skewed.
d. negatively skewed.
e. normal.
ANS: C PTS: 1 OBJ: Section 13.2

5. For the chi-square goodness-of-fit test, the null hypothesis is rejected

whenever:
a. the calculated chi-square statistic is less than the critical value.
b. the calculated chi-square statistic is equal to the critical value.
c. the calculated chi-square statistic is greater than the critical value.
d. the calculated chi-square statistic is not equal to the critical value.
ANS: C PTS: 1 OBJ: Section 13.3

6. Which of the following tests will determine whether sample data could have
been drawn from a population having a specified probability distribution?
a. independence of two variables
b. comparing proportions from two independent samples
c. estimating the population variance
d. goodness-of-fit test
e. confidence interval around a sample mean
ANS: D PTS: 1 OBJ: Section 13.3

7. For a chi-square distributed random variable with 12 degrees of freedom and

a significance level of 0.025 the chi-square value from the table is 23.337. Which
of the following computed values of chi-square will lead to acceptance of the
null hypothesis?
a. 42.22
b. 28.43
c. 31.34
d. 26.34
e. 18.26
ANS: E PTS: 1 OBJ: Section 13.2

8. A chi-square test for independence with 10 degrees of freedom results in a

test statistic of 18.21. Using the chi-square table, the most accurate statement
that can be made about the p-value for this test is that:
a. p-value > 0.20.
b. 0.025 > p-value > 0.01.
c. 0.05 > p-value > 0.025.
d. 0.10 > p-value > 0.05.
e. 0.20 > p-value > 0.10.
ANS: D PTS: 1 OBJ: Section 13.2

9. To use the chi-square distribution table to select a table value requires the
following:
a. numerator degrees of freedom.
b. denominator degrees of freedom.
c. level of significance.
d. degrees of freedom.
e. C and D above.
ANS: E PTS: 1 OBJ: Section 13.2

10. The middle 0.95 portion of the chi-square distribution with 10 degrees of
freedom has table values of:
a. 2.558, 3.247, respectively.
b. 3.247, 18.307, respectively.
c. 3.247, 20.483, respectively.
d. 3.940, 20.483, respectively.
e. 4.366, 23.843, respectively.
ANS: C PTS: 1 OBJ: Section 13.6

11. In the goodness-of-fit chi-square test, under which assumption are the
expected frequencies constructed?
a. The population follows the chi-square distribution.
b. The null hypothesis is true.
c. The alternative hypothesis is true.
d. The null hypothesis is false.
e. None of the above assumptions are necessary to construct the expected
frequencies.
ANS: B PTS: 1 OBJ: Section 13.3

12. A left tail area in the chi-square distribution equals 0.95. For df = 10, the
table value equals:
a. 18.307.
b. 15.987.
c. 3.940.
d. 20.483.
ANS: A PTS: 1 OBJ: Section 13.6

13. The chi-square distribution is used in:

a. a goodness-of-fit test.
b. a test of a contingency table.
c. making inferences about a single population variance.
d. comparing proportions from independent samples.
e. all of these answers are correct.
ANS: E PTS: 1 OBJ: Section 13.2

14. Which of the following tests do not use the chi-square distribution?
a. Test of a contingency table
b. Goodness-of-fit test
c. Difference between two population means test
d. All of these tests use the chi-squared distribution
ANS: C PTS: 1 OBJ: Section 13.2

15. In the goodness-of-fit chi-square test, the rule of thumb that the expected
frequency for each category should be at least 5 exists because:
a. the chi-square distribution is not symmetrical when the expected frequency of
a category is less than 5.
b. the test statistic for the chi-square distribution is based on the assumption
that the expected frequency of each category is greater than 5.
c. the chi-square distribution is negatively skewed when the expected frequency
of a category is less than 5.
d. the chi-square distribution is continuous while the counts on which the test
statistic are based are discrete.
e. the chi-square distribution is positively skewed when the expected frequency
of a category is less than 5.
ANS: D PTS: 1 OBJ: Section 13.3

16. The chi-square test statistic is chi-squared distributed with n – 1 degrees of

freedom only if the:
a. population is normally distributed.
b. sample is normally distributed.
c. sample has a Student t-distribution with degrees of freedom equal to n – 1.
d. population has a Student t-distribution with degrees of freedom equal to n.
ANS: A PTS: 1 OBJ: Section 13.2

17. Which of the following would be the recommended action if the expected
frequency for a particular category is less than 5 in the goodness-of-fit chi-
square test?
a. Decrease the significance level so that each category will have an expected
frequency greater than 5.
b. Combine adjacent cells so that the result will have an expected frequency
greater than 5.
c. Increase the sample size so that each category will have an expected
frequency greater than 5.
d. Either b or c could be used to ensure that each category will have an
expected frequency greater than 5.
e. Either a, b or c could be used to ensure that each category will have an
expected frequency greater than 5.
ANS: D PTS: 1 OBJ: Section 13.3

18. In a goodness-of-fit test, the null hypothesis states that the data came from
a normally distributed population. The researcher estimated the population
mean and population standard deviation from a sample of 500 observations. In
addition, the researcher used 6 standardized intervals to test for normality.
Using a 5% level of significance, the critical value for this test is:
a. 11.143.
b. 9.348.
c. 7.815.
d. 9.488.
ANS: C PTS: 1 OBJ: Section 13.3

19. A chi-square goodness-of-fit test is always conducted as:

a. a left-tail test.
b. a right-tail test.
c. a two-tail test.
d. the answer depends of whether the hypothesis is directional or
nondirectional.
ANS: B PTS: 1 OBJ: Section 13.3

20. In a goodness-of-fit chi-square test, if the null hypothesis states “The sample
was drawn from a population that follows the normal distribution” and the test
has 7 categories that are mutually exclusive and exhaustive, the number of
degrees of freedom will be
a. 4
b. 5
c. 6
d. 7
e. 8
ANS: A PTS: 1 OBJ: Section 13.3

21. In chi-square tests, the conventional and conservative rule, known as the
Rule of Five, is to require that:
a. observed frequency for each cell be at least five.
b. degrees of freedom for the test be at least five.
c. expected frequency for each cell be at least five.
d. difference between the observed and expected frequency for each cell be at
least five.
ANS: C PTS: 1 OBJ: Section 13.3
22. Of the values for a chi-squared test statistic listed below, which one is likely
to lead to rejecting the null hypothesis in a goodness-of-fit test?
a. 30
b. 3
c. 2
d. 1
ANS: A PTS: 1 OBJ: Section 13.3

23. To determine whether a single coin is fair, the coin was tossed 100 times,
and head was observed 60 times. The value of the test statistic is:
a. 4.
b. 40.
c. 6.
d. 60.
ANS: A PTS: 1 OBJ: Section 13.3

24. To determine whether data were drawn from a specific distribution, we use
a:
a. chi-square goodness-of-fit test.
b. chi-square test of a contingency table.
c. chi-square test for normality.
d. chi-square test for a population variance.
ANS: A PTS: 1 OBJ: Section 13.3

25. In a goodness-of-fit chi-square test, if the null hypothesis states “The sample
was drawn from a population that follows the binomial distribution” and the test
has 6 categories that are mutually exclusive and exhaustive, the number of
degrees of freedom will be
a. 3.
b. 4.
c. 5.
d. 6.
e. 7.
ANS: B PTS: 1 OBJ: Section 13.3
2 = 12.678, and the critical value at = 0.025 was 14.4494. Thus:26. In a chi-
squared test of a contingency table, the value of the test statistic was
a. we fail to reject the null hypothesis at = 0.025.
b. we reject the null hypothesis at = 0.025.
c. we don’t have enough evidence to accept or reject the null hypothesis at =
0.025.
d. we should decrease the level of significance in order to reject the null
hypothesis.
ANS: A PTS: 1 OBJ: Section 13.4

27. The number of degrees of freedom in a test of a contingency table with 5

rows and 3 columns equals:
a. 4.
b. 7.
c. 8.
d. 3.
ANS: C PTS: 1 OBJ: Section 13.4

28. The chi-square test of independence is based upon:

a. two qualitative variables.
b. two quantitative variables.
c. three or more qualitative variables.
d. three or more quantitative variables.
ANS: A PTS: 1 OBJ: Section 13.4

29. In the chi-square test for equality of proportions, the procedure is identical
test for independence of two variables with the exception that in the test for
equality of proportions:
a. each column consists of observations for an independent sample.
b. each table will always have 2 rows.
c. the number of degrees of freedom will be the number of rows times the
number of columns.
d. both a and b.
e. all of the above.
ANS: D PTS: 1 OBJ: Section 13.5
30. In testing a population variance or constructing a confidence interval for the
population variance, an essential assumption is that:
a. sample size exceeds 30.
b. expected frequencies equal or exceed 5.
c. the population is uniformly distributed.
d. the population is normally distributed.
e. the population is binomially distributed.
ANS: D PTS: 1 OBJ: Section 13.6

31. In a hypothesis test for the population variance, the alternate hypothesis is
the population variance does not equal 17.0. The significance level to be used is
0.05 and the sample size to be taken is 25. The table value(s) to use from the
chi-square distribution is (are):
a. 39.364.
b. 40.647.
c. 12.401 and 39.364.
d. 13.120 and 40.647.
e. 12.401.
ANS: C PTS: 1 OBJ: Section 13.6

32. Lily Energy Systems manufactures wood-burning heaters and fireplace

inserts. One of its systems has an electric blower, which is thermostatically
controlled. The blower is designed to automatically turn on when the
temperature in the stove reaches 125 degrees F. and turn off at 85 degrees F.
Complaints from customers indicate that the thermostat control is not working
properly. The company feels that the thermostat is acceptable if the variance in
the cutoff temperature is less than or equal to 175. The company takes a sample
of 24 thermostats and finds that the variance equals 289. The calculated chi-
square test statistic and the table value for a 0.05 significance level are:
a. 35.172, 38.99.
b. 37.983, 35.172.
c. 38.076, 38.99.
d. 37.983, 38.076.
e. none of these.
ANS: B PTS: 1 OBJ: Section 13.6

33. The Forest Management Institute is conducting a test, which involves

measuring the size of trees by photographing from helicopter rather than actual
field measurement. This process is especially important in forest areas
accessible only by helicopter. A sample of 31 trees measured by aerial
photography had a sample standard deviation of 2.24. A 95 percent confidence
interval for the population variance is represented by the values:
a. 30(2.24) / 46.979 and 30(2.24) / 16.791.
b. 30(2.242) / 46.979 and 30(2.242) / 16.791.
c. 31(2.24) / 16.791 and 31(2.24) / 46.979.
d. 31(2.242) / 46.979 and 31(2.242) / 16.791.
e. 30(2.24) / 16.791 and 30(2.24) / 46.979.
ANS: B PTS: 1 OBJ: Section 13.6

34. A researcher is studying cancer mortality rates for men in five southern
states. In the five states, the sample standard deviation is 6.76 (per 100,000). A
98 percent confidence interval estimate of the population variance is
represented by:
a. 5(6.76) / 13.277 and 5(6.76) / 0.297.
b. 5(6.762) / 13.277 and 5(6.762) / 0.297.
c. 4(6.76) / 13.277 and 4(6.76) / 0.297.
d. 4(6.762) / 13.277 and 4(6.762) / 0.297.
e. 4(6.762) / 0.297 and 4(6.762) / 13.277.
ANS: D PTS: 1 OBJ: Section 13.6

NUMERIC RESPONSE

1. The null hypothesis states that the sample data came from a normally
distributed population. The researcher calculates the sample mean and the
sample standard deviation from the data. The data arrangement consisted of six
categories. Using a 0.01 significance level, what is the appropriate critical value
for this chi-square test?

ANS: 11.345
PTS: 1 OBJ: Section 13.3

NARRBEGIN: Department store

8. What is the computed value of the chi-square test statistic?

ANS: 6.851

PTS: 1 OBJ: Section 13.3

NARRBEGIN: Mean Profit

A report stated that the mean profit margin of 1000 publicly held corporations is
7.5 percent and the standard deviation is 5.1 percent. Profit margins appear
normally distributed. A financial analyst sampled 100 of these companies to test
whether or not the mean and standard deviation are as stated. The sample
results were:
NARREND
9. What is the expected frequency of the under 2 category?

ANS: 14.01
PTS: 1 OBJ: Section 13.3

10. What is the expected frequency of the 18 or more category?

ANS: 1.97

PTS: 1 OBJ: Section 13.3

11. A test for independence is applied to a contingency table with 4 rows and 5
columns for two nominal variables. Calculate the degrees of freedom for this
test.

ANS: 12

PTS: 1 OBJ: Section 13.4

COMPLETION

1. When we apply chi-square analysis to examine whether sample data could

have been drawn from a population having a specified probability distribution,
we are performing ____________________ tests.
ANS:
goodness-of-fit
goodness of fit

PTS: 1 OBJ: Section 13.3

2. Under the assumption that the null hypothesis is true, we construct a table of
____________________ that are based on the probability distribution from which the
sample is assumed to have been drawn.

ANS: expected frequencies

PTS: 1 OBJ: Section 13.3

3. The starting point for the chi-square test of variable independence is the
____________________.

ANS: contingency table

PTS: 1 OBJ: Section 13.4

4. When samples of size n are drawn from a normal population, the

____________________ distribution is the sampling distribution of .

ANS: chi-square

PTS: 1 OBJ: Section 13.7

SHORT ANSWER

1. When samples of size n are drawn from a normal population, the chi-square
distribution is the sampling distribution of = ____________________, where s2 and
are the sample and population variances, respectively.

ANS:

PTS: 1 OBJ: Section 13.2

2. Find the chi-square value for each of the right-tail areas below, given that the
degrees of freedom are 7:

A) 0.95 ____________________
B) 0.01 ____________________

C) 0.025 ____________________

D) 0.05 ____________________

ANS:
2.167; 18.475; 16.013; 14.067

PTS: 1 OBJ: Section 13.2

3. Find the chi-square value for each of the four degrees of freedom below, given
that the area to the left of a chi-square value is 0.05.

A) 2 ____________________

B) 6 ____________________

C) 10 ____________________

D) 26 ____________________

ANS:
0.103; 1.635; 3.940; 15.379

PTS: 1 OBJ: Section 13.2

NARRBEGIN: Department store

A large department store records the number of returns per day in women’s
dresses for reasons such as wrong size; husband didn’t like it, color, etc. The
manager of the women’s dresses department recalls from her statistics class in
college that the Poisson distribution might describe such events. A random
sample of 150 days is taken. The number of returns per day in the sample as
well as the observed frequencies are shown below:
NARREND
4. She tests the hypothesis that returns per day are Poisson distributed with a
population mean equal to 1.90. Her significance level is 0.05. State the null and
alternative hypotheses.

NARRBEGIN: Number of sales

A salesperson makes five calls per day. A sample of 200 days gives the
frequencies of sales volumes listed below
NARREND
13. Assume the population is a binomial distribution with a probability of
purchase equal to 0.50. Compute the expected frequencies (Ej) for the number
of sales by using the binomial tables. Combine if necessary to satisfy the rules of
five.

ANS:

x Oj p(x) Ej
0 10 .0313 6.26
1 38 .1562 31.24
2 69 .3125 62.50
3 63 .3125 62.50
4 18 .1562 31.24
5 2 .0313 6.26
TOTAL 200 1.00 200
PTS: 1 OBJ: Section 13.3

14. Should the assumption of a binomial distribution with a probability of

purchase equal to 0.50 be rejected at the 5% significance level?

Hypotheses: ____________________

19. A large carpet store wishes to determine if the brand of carpet purchased is
related to the purchaser’s family income. As a sampling frame, they mailed a
survey to people who have a store credit card. Five hundred customers returned
the survey and the results follow:

At the 5% level of significance, can you conclude that the brand of carpet
purchased is related to the purchaser’s family income?

H0: ____________________________________________________________

H1: ____________________________________________________________

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________________

ANS:
H0: Family income and brand of carpet are independent.;
H1: Family income and brand of carpet are dependent.;
2Rejection region: reject H0 if calculated > 2(.05, 4) = 9.488
2 = 27.372; we reject H0 and conclude that the brand of carpet purchased is
related to the purchaser’s family income.Calculated

PTS: 1 OBJ: Section 13.4

20. A sport preference poll showed the following data for men and women:

Use the 5% level of significance and test to determine whether sport

preferences depend on gender.

H0: _______________________________________________________________

H1: _______________________________________________________________

Test statistic = ____________________

Critical Value = ____________________

Conclusion: _________________________

ANS:
H0: Gender and favorite sport are independent.;
H1: Gender and favorite sport are dependent.;
2Rejection region: Reject H0 if calculated >2(.05,4) = 9.488;
2 = 3.30; Do not reject H0; there is not enough statistical evidence to conclude
that sport preferences depend on gender.Calculated

PTS: 1 OBJ: Section 13.4

H0: __________________________________________________________

H1: __________________________________________________________

ANS:
The gifts are equally attractive to the subscribers).;H0:
values differs from the others. (Gifts are not equally attractive to the
subscribers).H1: At least one of the

PTS: 1 OBJ: Section 13.5

22. State the decision rule.

ANS:
Reject H0 if calculated chi-square > critical value = 9.21.

PTS: 1 OBJ: Section 13.5

23. What is the conclusion?

ANS:
Reject H0 and conclude that the gifts were not equally attractive to the
subscribers

PTS: 1 OBJ: Section 13.5

ANS:
Reject H0 and conclude there is a difference in the proportion of movies rented
by members and non-members at the movie store.

PTS: 1 OBJ: Section 13.5

NARRBEGIN: Employee
Four employees are monitored to determine whether there is any difference in
the proportions of acceptable parts produced by the employees. The sample of
parts produced is given below.
NARREND
25. These data provide the information for testing the hypothesis that the
proportion of unacceptable is the same for the four employees. What is the
conclusion?

ANS:
Reject H0 and conclude that there is a difference in the proportions of the
production of acceptable parts for at least one employee.

PTS: 1 OBJ: Section 13.5

NARRBEGIN: Metro Bus System

The management of the Metro Bus System of Houston, TX was faced with the
task of improving efficiency in terms of running on time. One of its greatest
problems was breakdown of equipment. Between 1994 and 1997, emphasis was
placed on maintenance. Random samples of 10,000 bus runs were taken from
the records of 1994 and 1997. The percentage of breakdowns in 1994 was 0.4
and in 1997 it was 0.04. Use a chi-square test for equal proportions to analyze
these data.
NARREND
26. What are the observed frequencies of the 1994 and 1997 breakdowns?

1994: ____________________

1997: ____________________

ANS:
40; 4

PTS: 1 OBJ: Section 13.5

27. What are the expected frequencies of the 1994 and 1997 breakdowns?

1994: ____________________

1997: ____________________

ANS:
22; 22

PTS: 1 OBJ: Section 13.5

28. State the conclusion at the 0.01 significance level.

ANS:
Reject H0 and conclude that at least one of the proportions of breakdowns is not
the same as the other years.

PTS: 1 OBJ: Section 13.5

NARRBEGIN: Survey
In a survey of 100 males and 100 females at a regional university, 26 percent of
the males and 18 percent of the females responded that they were offended by
frequently aired television. The test question is: Could these results indicate that
the same proportions of the two samples are offended?
NARREND
29. What are the observed frequencies of the males and females who are
offended by the ads?

Males: ____________________

Females: ____________________

ANS:
26; 18

PTS: 1 OBJ: Section 13.5

30. Calculate the expected frequencies of the males and females who are
offended by the ads.

Males: ____________________

ANS:
Since 7.90 < 9.488, we fail to reject the null hypothesis. The data supports the
professor’s claim.

PTS: 1 OBJ: Section 13.5

35. In 2000, the student body of a state university in Michigan consists of 30%
freshmen, 25% sophomores, 27% juniors, and 18% seniors. A sample of 400
students taken from the 2000 student body showed that there are 138
freshmen, 88 sophomores, 94 juniors, and 80 seniors. Test with 5% significance
level to determine whether the student body proportions have changed.

H0: _______________________________________________________

H1: _______________________________________________________

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ___________________________

ANS:
H0: ;
H1: At least one proportion differs from its specified value.;
2Rejection region: reject H0 if calculated > 2(0.05, 3) = 7.815.
2 = 6.844, do not reject H0 and conclude that there is no statistical evidence to
suggest that the student body proportions have changed.Since calculated

PTS: 1 OBJ: Section 13.5

NARRBEGIN: TV Model
Three hundred individuals were asked to view the picture quality of four different
TVs and asked to choose the one they preferred. The data is shown in the
following table:

TV Model Number Who preferred

A 82
B 65
C 73
D 80
Total 300

NARREND
36. Test the equality of proportions at the 0.05 level.

What are the null and alternative hypotheses?

ANS:
H0:
H1: At least one population proportion differs from the others.

PTS: 1 OBJ: Section 13.5

37. Test the equality of proportions at the 0.05 level the hypotheses.

Compute the test statistic.

ANS:
= 2.37

PTS: 1 OBJ: Section 13.5

38. Test the equality of proportions at the 0.05 level the hypotheses.

State the decision rule in terms of the critical value.

What is the conclusion?

ANS:
Reject the null hypothesis if > 7.815.

Since < 7.815, we fail to reject the null hypothesis.

PTS: 1 OBJ: Section 13.5

NARRBEGIN: Grade distribution

A professor would like to test to see if the grade distribution for male and female
students are the same. The following table shows the distribution of grades for
1450 students.

A B C D F Total
Male 124 192 212 87 15 630
Female 195 238 240 120 27 820
Total 319 430 452 207 42 1450

NARREND
39. Compute the expected counts for each category.

ANS:

A B C D F Total
Male 138.6 186.8 196.4 89.9 18.2 630
Female 180.4 243.2 255.6 117.1 23.8 820
Total 319 430 452 207 42 1450
PTS: 1 OBJ: Section 13.5

40. Compute the test statistic.

ANS:
= 6.36

PTS: 1 OBJ: Section 13.5

41. Using = 0.05, state the decision rule in terms of the critical value.

ANS:
Reject the null hypothesis if > 9.488.

PTS: 1 OBJ: Section 13.5

42. Using = 0.05, state the conclusion.

ANS:
Since < 9.488, we fail to reject the null hypothesis. Therefore there is no
evidence to suggest that male students have a different grade distribution than
female students.

PTS: 1 OBJ: Section 13.5

43. The realtor for an exclusive, planned housing development says that house
prices average $125 thousand and uniformity of prices within the development
is indicated by the standard deviation of $ 8 thousand. A prospective buyer
wants to check on the uniformity of prices and randomly samples 12 houses and
determines the selling price. These data are: 113.0, 126.2, 134.4, 129.4, 106.6,
117.4, 123.5, 121.0, 109.6, 119.4, 126.6, and 119.6. Use these data to test the
hypothesis:

H0: (realtor correct)

H1: (realtor incorrect)

The buyer assumes selling prices are normally distributed and employs a 0.05
significance level. Is the statement by the realtor correct?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: _____________________
Interpretation: _____________________________________

a random sample of 10 observations was drawn from a normal population, and

the sample standard deviation was 0.043.
NARREND
47. Determine the rejection region at the 5% significance level.

ANS:
Reject H0 if calculated chi-square < 2.7 or if calculated chi-square > 19.023

PTS: 1 OBJ: Section 13.6

48. What is the conclusion?

ANS:
Reject H0 We can infer that the population variance differs significantly from
0.01

PTS: 1 OBJ: Section 13.6

49. A sample of size 20 is used to obtain the following statistics: and Can we
conclude at the 1% significance level that the population variance is less than
100?

Hypotheses:

Test statistic = ____________________

Critical Value = ____________________

Conclusion: _________________________

Interpretation: __________________________________________________

ANS:
1002 H0:
2H1: < 100
2Rejection region: if < 2 = 13.916; Do not reject H0; There is not enough
evidence to conclude that the population variance is less than 100.7.633
Calculated

PTS: 1 OBJ: Section 13.6

50. A sample of size 20 is used to obtain the following statistics: and Estimate
the population variance with 98% confidence.

Lower value = ____________________

Upper value = ____________________

ANS:
38.450; 182.307

PTS: 1 OBJ: Section 13.6

51. A random sample of 5 observations was drawn from a normal population.

These were: 18, 16, 10, 13, and 23. Test the hypotheses:

H0:
H1:

at the 10% significance level.

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

Interpretation: _________________________________________________

ANS:
2Rejection region: Reject H0 if > 2 = 4.90; Do not reject H0; There is not
enough evidence to conclude that the population variance is greater than
20.7.779; Calculated

PTS: 1 OBJ: Section 13.6

52. A random sample of 5 observations was drawn from a normal population.
These were: 18, 16, 10, 13, and 23. Estimate the population variance with 90%
confidence.

Lower value = ____________________

Upper value = ____________________

ANS:
10.329; 137.888

PTS: 1 OBJ: Section 13.6

53. In order to examine whether a sample could have come from a given type of
population distribution (e.g., the normal distribution), chi-square analysis
involves the comparison of a table of ______________________________ Oij with a
table of ______________________________ Eij that has been constructed under the
assumption that the null hypothesis is true.

ANS:
observed frequencies; expected frequencies

PTS: 1 OBJ: Section 13.6

ESSAY

1. Using the chi-square distribution, along with sample data and frequency
counts, what will we be able to examine?

ANS:
We will be able to examine: 1) whether a sample could have come from a given
type of population distribution. 2) whether two nominal variables could be
independent of each other. 3) whether two or more independent samples could
have the same population proportion.

PTS: 1 OBJ: Section 13.1

2. In what way are the chi-square and normal distributions related?

ANS:
The chi-square distribution is skewed positively, but as its degrees of freedom
increase, it approaches the shape of the normal distribution.

PTS: 1 OBJ: Section 13.2

3. In carrying out a chi-square goodness-of-fit test, what are the “k” and “m”
terms in the “df = k – 1 – m” expression and why is each term present?

ANS:
Given k is the number of categories or groups in the, and m is the number of
population parameters that must be estimated from sample data in order to
carry out the test. “k-1” cells to determine the count in the cell. In addition, each
population parameter that must be estimated also reduces our degrees of
freedom.

PTS: 1 OBJ: Section 13.3

4. What is the rationale for df = (r – 1)(k – 1) in conducting a chi-square test of

independence for a contingency table with r rows and k columns?

ANS:
The rationale for df = (r-1) (k-1) is that this quantity represents the number of
cell frequencies that are free to vary. Given that we know the sample size (the
total number of observations in the table), we need only know the contents of (r-
1) rows and (k-1) columns in order to completely fill in the cells within the r x k
table.

PTS: 1 OBJ: Section 13.4

Chapter 14. Nonparametric

Methods
Test Bank

TRUE/FALSE
1. True or False
A one-sample t-test is the parametric counterpart to the Wilcoxon signed rank
test for one sample.

ANS: T PTS: 1 OBJ: Section 14.2

2. True or False
A Nonparametric test is one that assumes that the population from which a
sample is drawn is normally distributed or approximately so.

ANS: F PTS: 1 OBJ: Section 14.1

3. True or False
Nonparametric tests are useful when data are of the nominal or ordinal scale of
measurement.

ANS: T PTS: 1 OBJ: Section 14.1

4. True or False
Compared to a parametric test, Nonparametric tests use the information in the
data more efficiently.

ANS: F PTS: 1 OBJ: Section 14.1

5. True or False
The Spearman coefficient of rank correlation measures both the strength and
direction of paired observations that are at least a nominal measurement scale.

ANS: F PTS: 1 OBJ: Section 14.7

6. True or False
The Wilcoxon signed rank test for comparing paired samples assumes the data
are continuous and are of the interval or ratio scale of measurement.

ANS: T PTS: 1 OBJ: Section 14.3

7. True or False
The Wilcoxon signed rank test is applied to a single sample in testing whether
the population proportion could be a hypothesized value.
ANS: F PTS: 1 OBJ: Section 14.8

8. True or False
The Kruskal-Wallis test compares the medians of more than two independent
samples.

ANS: T PTS: 1 OBJ: Section 14.8

9. True or False
The Kruskal-Wallis test requires that the scale of measurement of the data must
be at least interval or ratio, and the samples are assumed to be randomly
selected from their respective populations.

ANS: F PTS: 1 OBJ: Section 14.5

10. True or False

Like the randomized block ANOVA, the Friedman test has the goal of comparing
treatments, though it is concerned their medians rather than their means.

ANS: T PTS: 1 OBJ: Section 14.6

11. True or False

The sign test evaluates the randomness of a series of observations by analyzing
the number of consecutive data values that are similar.

ANS: F PTS: 1 OBJ: Section 14.7

MULTIPLE CHOICE

1. A nonparametric test should be used instead of its parametric counterpart

whenever:
a. the sample size is less than 30.
b. data are of the nominal or ordinal scale.
c. data are of the interval or ratio scale but one or more assumptions about the
population distribution are not met.
d. both b and c.
e. all of the above.
ANS: D PTS: 1 OBJ: Section 14.1
2. The nonparametric counterpart to the one-sample t-test is the
a. Wilcoxon signed rank test.
b. Wilcoxon rank sum test.
c. Kruskal-Wallis test.
d. Friedman test for randomized block design.
e. run test.
ANS: A PTS: 1 OBJ: Section 14.2

3. An NBA executive says that players who substitute as the sixth, seventh and
eighth positions for the games starting five players have a median playing time
of 24 minutes. A random sample of 25 substitutes (6, 7 or 8) produces 20 non-
zero differences in a Wilcoxon signed rank test and a W (R+) equal to 146. The
alternate hypothesis is m 24 minutes. Assume the population is symmetrically
distributed. The computed test statistic in this situation equals:
a. 146.
b. 24.
c. 25.
d. 1.53.
e. 41.
ANS: D PTS: 1 OBJ: Section 14.2

4. The Wilcoxon signed rank test assumes sample data to be

a. continuous with either nominal or ordinal measurement scale.
b. continuous with either interval or ratio measurement scale.
c. discrete with either nominal or ordinal measurement scale.
d. discrete with either interval or ratio measurement scale.
e. continuous with any measurement scale.
ANS: A PTS: 1 OBJ: Section 14.2

5. An NHL executive says that players who incur penalty time during a game
have a median time of 1.2 minutes in the penalty box. A random sample of 28
hockey players with penalty time produced 24 non-zero differences when a
Wilcoxon signed rank test was used. The W (R+) equaled 156.5. The alternate
hypothesis is m 1.2 minutes. Assume the population is symmetrically
distributed. The computed test statistic in this instance equals:
a. 156.5.
b. 0.186.
c. 6.5.
d. 35.
e. 143.5.
ANS: B PTS: 1 OBJ: Section 14.2

6. The nonparametric counterpart to the paired sample, two-sample t-test is the:

7. The significance level for a Wilcoxon signed rank test for matched pairs is
0.05. The alternative hypothesis is H1: md > 0. The appropriate critical value for
n = 20 nonzero differences is:
a. 158
b. 149
c. 61
d. 52
e. 112
ANS: B PTS: 1 OBJ: Section 14.3

8. In a Wilcoxon signed rank test for matched pairs with n = 35, the rank sums
of the positive and negative differences are 380 and 225, respectively. The value
of the standardized test statistic (that is, the value of z approximation test
statistic) is:
a. 1.689.
b. 1.065.
c. 1.206.
d. 1.400.
e. 1.960.
ANS: B PTS: 1 OBJ: Section 14.3
9. A nonparametric method to compare two populations, when the samples are
matched pairs and the data are quantitative where the normality requirement
necessary to perform the parametric test is unsatisfied, is the:
a. the Wilcoxon rank sum test.
b. the Friedman test.
c. the Kruskal-Wallis test.
d. the Matched pairs t-test.
e. the Wilcoxon signed rank test.
ANS: E PTS: 1 OBJ: Section 14.3

10. In a Wilcoxon signed rank test for matched pairs, the test statistic is
calculated as W = 48. The alternative hypothesis is H1: md > 0. If there are n =
10 nonzero differences, and the 5% significance level is used, then the:
a. the null hypothesis will be rejected.
b. the null hypothesis will not be rejected.
c. the test results are inconclusive.
d. the t-test for matched pairs must be used.
ANS: A PTS: 1 OBJ: Section 14.3

11. The nonparametric counterpart to the two-sample t-test with independent

samples is the:
a. Wilcoxon signed rank test for paired samples.
b. Wilcoxon rank sum test.
c. Wilcoxon signed rank test for one sample.
d. Friedman test for randomized block design.
e. Kruskal-Wallis test.
ANS: B PTS: 1 OBJ: Section 14.4

12. In a Wilcoxon rank sum test n1 = 12, n2 = 15 and the sum of R1 = 108. The
value of the test statistic for the normal approximation is:
a. -1.23.
b. -2.93.
c. -108.
d. 108.
e. 15.
ANS: B PTS: 1 OBJ: Section 14.4

13. In a Wilcoxon rank sum test n1 = 14, n2 = 16 and the sum of R1 = 260. The
value of the test statistic for the normal approximation is:
a. 1.79.
b. -2.93.
c. -260.
d. 260.
e. 16.
ANS: A PTS: 1 OBJ: Section 14.4

14. The Wilcoxon rank sum test assumes that the measurement scale of the
data be at least:
a. nominal.
b. ordinal.
c. interval.
d. ratio.
e. Any measurement scale can be used for the Wilcoxon rank sum test.
ANS: B PTS: 1 OBJ: Section 14.4

15. In a normal approximation to the Wilcoxon rank sum test, the standardized
test statistic value is calculated as z = 1.80. For a two- tail test, the p-value is:
a. 0.0359.
b. 0.4641.
c. 0.2321.
d. 0.0718.
e. 0.1077.
ANS: D PTS: 1 OBJ: Section 14.4

16. A Wilcoxon rank sum test for comparing two populations involves two
independent samples of sizes 15 and 20. The un-standardized test statistic (that
is the rank sum) is W = 210. The value of the standardized test statistic (that is,
the value of z-approximation test statistic) is:
a. 14.
b. 10.5.
c. 6.
d. -1.4.
e. -8.
ANS: D PTS: 1 OBJ: Section 14.4

17. Consider the following two independent samples:

The value of the test statistic for a left-tail Wilcoxon rank sum test is:
a. 6.
b. 20.
c. 35.
d. 55.
e. 9.
ANS: B PTS: 1 OBJ: Section 14.4

18. The Wilcoxon rank sum test statistic W is approximately normally distributed
whenever both sample sizes are at least:
a. 10.
b. 15.
c. 20.
d. 25.
e. 30.
ANS: A PTS: 1 OBJ: Section 14.4

19. A three independent samples one-way analysis of variance test corresponds

to a:
a. Wilcoxon signed rank test for paired samples.
b. Wilcoxon rank sum test.
c. Wilcoxon signed rank test for one sample.
d. Friedman test for randomized block design.
e. Kruskal-Wallis test.
ANS: E PTS: 1 OBJ: Section 14.5

20. A nonparametric method to compare more than two populations, when the
samples are independent and the data are either ranked or quantitative but not
normal, is:
a. Kruskal-Wallis test.
b. Friedman test.
c. Wilcoxon rank sum test.
d. Wilcoxon signed rank test.
e. Sign test for comparing paired samples.
ANS: A PTS: 1 OBJ: Section 14.5

21. The nonparametric counterpart of the parametric one-way analysis of

variance F-test is:
a. Kruskal-Wallis test.
b. Friedman test.
c. Wilcoxon rank sum test.
d. Wilcoxon signed rank test.
e. Sign test for comparing paired samples.
ANS: A PTS: 1 OBJ: Section 14.5

22. In a Kruskal-Wallis test at the 5% significance level, there are four samples
and the value of the test statistic is calculated as H = 8.79. The most accurate
statement that can be made about the p-value is that it is:
a. greater than 0.10.
b. greater than 0.05 but smaller than 0.10.
c. greater than 0.05.
d. greater than 0.025 but smaller than 0.05.
e. greater than 0.10 but smaller than 0.15.
ANS: D PTS: 1 OBJ: Section 14.5

23. A randomized block design analysis of variance test corresponds to a:

a. Wilcoxon signed rank test for paired samples.
b. Wilcoxon rank sum test.
c. Wilcoxon signed rank test for one sample.
d. Friedman test for randomized block design.
e. Kruskal-Wallis test.
ANS: D PTS: 1 OBJ: Section 14.6
24. The nonparametric counterpart to the randomized block design of the
analysis of variance is:
a. Kruskal-Wallis test.
b. Friedman test.
c. Wilcoxon rank sum test.
d. Wilcoxon signed rank test.
e. Sign test for comparing paired samples.
ANS: B PTS: 1 OBJ: Section 14.6

25. A nonparametric method to compare two or more populations, when the

samples are matched pairs and the data are either ranked or quantitative but
not normal is the:
a. Wilcoxon signed rank test.
b. Wilcoxon rank sum test.
c. Friedman test.
d. Kruskal-Wallis test.
e. Sign test for comparing paired samples.
ANS: C PTS: 1 OBJ: Section 14.6

26. The sign test for comparing paired samples assumes that the measurement
scale of the sample data is:
a. nominal.
b. ordinal.
c. interval.
d. ratio.
e. Any measurement scale can be used for the sign test for comparing paired
samples.
ANS: B PTS: 1 OBJ: Section 14.7

27. The Kolmogorov-Smirnov test for normality

a. is a nonparametric counterpart for the chi-square test for normality.
b. does not require any minimum values for expected frequencies.
c. can be used for small sample sizes.
d. Both a nd b.
e. All of the above.
ANS: E PTS: 1 OBJ: Section 14.7

28. A random sample of 10 girls attending a summer camp produced 8 (+

differences) who were older than 14. Test the null hypothesis that md = 0 versus
the alternative hypothesis that md 0. The p-value for the computed test statistic
is:
a. 0.623.
b. 0.9453.
c. 0.0547.
d. 0.1094.
e. 0.1719.
ANS: D PTS: 1 OBJ: Section 14.7

29. A random sample of ten basketball players from the SLC revealed 3 (+
differences) who weighed more than 245 pounds. Test the null hypothesis that
md = 0 versus the alternative hypothesis that md < 0. The p-value for the
computed test statistic is:
a. 0.3438.
b. 0.9453.
c. 0.0547.
d. 0.1094.
e. 0.1719.
ANS: E PTS: 1 OBJ: Section 14.7

30. Which of the following tests would be an example of a nonparametric

method?
a. Wilcoxon signed rank test
b. Kruskal-Wallis test
c. Friedman test
d. Wilcoxon rank sum test
e. All of these are nonparametric methods
ANS: E PTS: 1 OBJ: Section 14.8
31. Which of the following statements are not true?
a. A non-parametric test is one that makes no assumptions about the specific
shape of the population from which a sample is drawn.
b. A non-parametric test is used instead of its parametric counterpart when the
data are of the nominal or ordinal scales of measurement.
c. A non-parametric test is used instead of its parametric counterpart when the
data are of the interval or ratio scales of measurement, but one or more other
assumptions (e.g., the normality of the underlying distribution) are not met.
d. Unlike parametric methods, non-parametric techniques can be applied even
when the sample sizes are very small.
e. All of these statements are true.
ANS: E PTS: 1 OBJ: Section 14.8

32. Which of the following statements are not true?

a. The sign test assumes the data are interval instead of ordinal.
b. The sign test makes less efficient use of the data than does the Wilcoxon
signed rank test.
c. In the sign test, each observation (one-sample test) or difference between
paired observations (paired samples) is expressed only as a plus (+) or a minus
(-) to indicate the direction of the difference.
d. All of these statements are true.
e. None of these statements is true.
ANS: A PTS: 1 OBJ: Section 14.8

NUMERIC RESPONSE

1. The significance level for a Wilcoxon signed rank test for one sample is 0.025.
The alternative hypothesis is m < m0, and the sample size is 14. What is the
appropriate critical value?

ANS: 22

PTS: 1 OBJ: Section 14.2

2. The significance level for a Wilcoxon signed rank test for one sample is 0.025.
The alternative hypothesis is m > m0, and the sample size is 14. What is the
appropriate critical value?

ANS: 83

PTS: 1 OBJ: Section 14.2

NARRBEGIN: Dataset
Consider the following data set:
NARREND
3. What is the rank assigned to the four observations of value 22?

ANS: 13.5

PTS: 1 OBJ: Section 14.2

4. What is the rank assigned to the three observations of value 1.8?

PTS: 1 OBJ: Section 14.2

3. The critical value of the Kruskal-Wallis test for comparing more than two
independent samples is obtained from the ____________________ distribution
whenever each sample size is at least ____________________.
ANS:
chi-square; 5
chi-square, five

PTS: 1 OBJ: Section 14.5

4. The ____________________ test is the nonparametric counterpart to the

randomized block ANOVA design.

ANS: Friedman

PTS: 1 OBJ: Section 14.6

5. The ____________________ test evaluates the randomness of a series of

observations by analyzing the number of ____________________ it contains.

ANS: runs; runs

PTS: 1 OBJ: Section 14.7

6. Unlike the Wilcoxon signed rank test, the ____________________ test assumes
data are ordinal.

ANS: sign

PTS: 1 OBJ: Section 14.7

PTS: 1 OBJ: Section 14.6

SHORT ANSWER

4. Assume the population is symmetrically distributed. State the conclusion.

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________________

ANS:
22; 60; Do not reject H0
PTS: 1 OBJ: Section 14.2

NARRBEGIN: Nonzero
Number of nonzero differences = 14; R+ = 16; R- = 89.

The hypothesis set is: H0: m 22, H1: m < 22

NARREND
5. Assume the population is symmetrically distributed. At a 0.05 significance
level, state the appropriate decision rule.

ANS:
Reject the null hypothesis if R+ < 26

PTS: 1 OBJ: Section 14.2

6. Assume the population is symmetrically distributed. What is the conclusion?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: _______________________

ANS:
16; 26; Reject H0

PTS: 1 OBJ: Section 14.2

NARRBEGIN: IRS
As a guideline, a local Internal Revenue Service office recommends that auditors
try to spend 16 minutes or less with taxpayers who are called for audit
interviews. In a recent random sample of 22 interviews, the interview times
were as shown below:
NARREND
7. Using the 0.025 level, do these data suggest that the median interview time
for auditors from this office exceeds the recommend guideline?

H0: ____________________

H1: ____________________
Test statistic = ____________________

Critical Value = ____________________

Conclusion: __________________________________

Interpretation: _______________________________________________________

ANS:
m 16 minutes; m > 16 minutes; 2.12; 1.96; Reject H0; The median interview
time exceeds the recommended guideline

PTS: 1 OBJ: Section 14.2

8. Explain how to use the p-value to reach a conclusion when testing at the
0.025 level of significance.

ANS:
Since p-value = .017 < = 0.25, we reject H0

PTS: 1 OBJ: Section 14.2

NARRBEGIN: Writers
Eight professional food writers have been asked to rate the taste characteristics
of a meat dish prepared first by flame grilling and then by charcoal grilling. After
each of the dishes is prepared it is rated on a scale from 1 to 5 with 1 being best
and 5 being worst. The results of the rating were:
NARREND
9. The Wilcoxon signed rank test for paired samples is used to test the
hypotheses H0: md = 0 vs. H1: md 0. At the 0.05 significance level, what are the
critical values?

Separate your answers with commas, for example x, y, z, etc.

ANS:
3, 25

PTS: 1 OBJ: Section 14.3

10. The Wilcoxon signed rank test for paired samples is used to test the
hypotheses H0: md = 0 vs. H1: md 0. State the appropriate conclusion, using
the 0.05 significance level.

PTS: 1 OBJ: Section 14.3

14. The following data are drawn from a matched pairs experiment:

Use the 5% significance level to test the hypotheses H0: md 0, H1: md < 0

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ___________________________

Interpretation: __________________________________________________________

ANS:
4; 4; Reject H0; The population median of differences is smaller than zero

PTS: 1 OBJ: Section 14.3

15. A Wilcoxon rank sum test for comparing two independent samples involves
two sample sizes: 8 and 6. The alternate hypothesis is m1 m2. Use a 0.05
significance level. What are the appropriate table values?

Separate your answers with commas, for example x, y, z, etc.

ANS:
29, 61

PTS: 1 OBJ: Section 14.4

NARRBEGIN: Apartments
Residents of two different high rise apartment units may or may not have the
same consumer indebtedness. A sample from each results in the following
outstanding debt amounts:
NARREND
16. The test question is: Do residents of the two apartment units have similar
debt medians? State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
m2H0: m1 = m2, H1: m1

PTS: 1 OBJ: Section 14.4

17. The test question is: Do residents of the two apartment units have similar
debt medians? In testing the hypotheses, the significance level is 0.05. What are
the appropriate critical values?

Separate your answers with commas, for example x, y, z, etc.

ANS:
19, 41

PTS: 1 OBJ: Section 14.4

18. The test question is: Do residents of the two apartment units have similar
debt medians? State the appropriate conclusion employing a 0.05 significance
level.

ANS:
Do not reject H0

PTS: 1 OBJ: Section 14.4

NARRBEGIN: Diet programs

A consumer research organization will evaluate the results of two diet programs,
Take-It-Off and Melt-Away. Persons are randomly sampled from each of the
programs and their weight loss results follow.
NARREND
19. The test question is: Do the data indicate that the two programs are equally
effective? State the null and alternative hypotheses.

H0: ____________________

H1: ____________________

ANS:
m2H0: m1 = m2, H1: m1

PTS: 1 OBJ: Section 14.4

20. The test question is: Do the data indicate that the two programs are equally
effective? In testing the hypotheses, the significance level is 0.10. What are the
appropriate critical values?

Separate your answers with commas, for example x, y, z, etc.

ANS:
20, 40

PTS: 1 OBJ: Section 14.4

21. The test question is: Do the data indicate that the two programs are equally
effective? State the appropriate conclusion employing a 0.05 significance level.

ANS:
Do not reject H0

PTS: 1 OBJ: Section 14.4

22. Use the Wilcoxon rank sum test on the data below to determine at the 10%
significance level whether the two population medians differ.
H0: ____________________

H1: ____________________

Test statistic = ____________________

Rejection region = ____________________
If necessary, separate your answers with commas, for example x, y, z, etc.

Conclusion: _____________________________

Interpretation: _______________________________________________________

ANS:
m1 = m2; m1 m2;
W = 119.5;
83,or WW > 127;
Do not reject H0; Not enough evidence to state that the population medians are
different

PTS: 1 OBJ: Section 14.4

23. The following statistics are drawn from two independent samples: R1 = 800,
n1 = 25, R2 = 1100 and n2 = 28. Test at the 5% significance level to determine
whether the two population medians differ.

ANS:
m2; m2 , H1: m1 H0: m1
Test statistic zRejection region: |z|
Reject the null hypothesis; conclude that the population medians differ.

PTS: 1 OBJ: Section 14.4

24. A Wilcoxon rank sum test for comparing two independent samples involves
two sample sizes: 8 and 6. The alternate hypothesis is m1 m2. Use a 0.10
significance level. What are the appropriate table values?

Separate your answers with commas, for example x, y, z, etc.

ANS:
32, 58

PTS: 1 OBJ: Section 14.4

25. To determine whether or not the median total expenditure by households
was the same for three states, an economist took three samples of five counties
from the states of New Mexico, Colorado, and Utah. The data were:

Test the hypotheses: H0: m1 = m2 = m3

H1: Not all medians are the same. Use = 0.025.

Test statistic = ____________________

Critical Value = ____________________

If necessary, separate your answers with commas, for example x, y, z, etc.

Conclusion: _____________________________________

Interpretation: _____________________________________________________

ANS:
H = 2.54; Rejection region > 7.378; Do not reject H0; Not enough evidence to
show that the median total expenditure by households is different among these
states.

PTS: 1 OBJ: Section 14.5

NARRBEGIN: Seven Dwarfs

Several years ago a television station interviewed individuals and asked them to
name the “Seven Dwarfs” from the story of “Snow White.” The amount of time
(in seconds) to name the dwarfs was recorded by age group. The data were:
NARREND
26. The test question is: Do the different age groups require the same median
time to name the Dwarfs? State the null and alternative hypotheses.

H0: _______________________

H1: ________________________

ANS:
m1 = m2 = m3; At least one mi differs from the others.

PTS: 1 OBJ: Section 14.5

27. The test question is: Do the different age groups require the same median
time to name the Dwarfs? What is the appropriate conclusion employing a 0.05
significance level?

ANS:
Reject H0 and conclude there is a difference in the median total times to name
the dwarfs recorded by age group.

PTS: 1 OBJ: Section 14.5

NARRBEGIN: FAA
The FAA recorded the number of complaints per month for three airlines. The
data were:
NARREND
28. The test question is: Do the three airlines have the same median number of
complaints? State the null and alternative hypotheses.

H0: _____________________________

H1: _____________________________

ANS:
m1 = m2 = m3; At least one mi differs from the others.

PTS: 1 OBJ: Section 14.5

29. The test question is: Do the three airlines have the same median number of
complaints? State the appropriate conclusion employing a 0.025 significance
level.

ANS:
Reject H0 and conclude that the three airlines do not have the same median
number of complaints

PTS: 1 OBJ: Section 14.5

30. Apply the Kruskal-Wallis test to determine if there is enough evidence at the
5% significance level to infer that at least one of the population medians differs
from the others.
H0: ______________________________________

H1: ______________________________________

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ________________________________

Interpretation: _________________________________________________________

ANS:
m1 = m2 = m3; At least one median differs from the others;
H = 0.38; Rejection region H > 5.991; Do not reject H0; Not enough evidence to
conclude that the population medians are different

PTS: 1 OBJ: Section 14.5

31. The following data are drawn from four independent samples:

Test at the 1% significance level to determine whether the population medians

differ.

H0: __________________________

H1: __________________________

Test statistic = ____________________

Critical Value = ____________________

Conclusion: _____________________________

Interpretation: ______________________________________________________

ANS:
m1 = m2 = m3 = m4; At least one median differs from the others;
H = 10.2601; Rejection region H > 11.345; Do not reject H0; Not enough
evidence to conclude that the population medians are different

PTS: 1 OBJ: Section 14.5

NARRBEGIN: Treatments

No assumptions are made about the population distributions or variances of the

above sample data. The test question is: Are the medians of the treatments
equal?
NARREND
32. State the null and alternative hypotheses.

H0: _____________________________

H1: _____________________________

ANS:
m1 = m2 = m3; At least one median differs from the others.

PTS: 1

33. State the appropriate conclusion employing a 0.025 significance level.

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ________________________________

Interpretation: ________________________________________________________

ANS:
m1 = m2 = m3 = m4; At least one of the population medians is different;
Fr = 5.64; Rejection region Fr > 7.815;
Do not reject H0; There is not enough evidence to show that the population
medians are different.

PTS: 1 OBJ: Section 14.6

38. The test question is: Can we conclude at the 5% significance level that there
are differences in service quality among the four airlines? Using the appropriate
statistical table, what statement can be made about the p-value for the above
test?

ANS:
p-value > .10

PTS: 1 OBJ: Section 14.1

2. The chapter lists four major advantages to nonparametric testing. What are
they?

ANS:
a) Fewer assumptions about the population. Most important, the population
need not be normally distributed or approximately so. Nonparametric tests do
not assume the population has any specific distribution. b) The techniques can
be applied when samples are small. c) Samples with data of the nominal and
ordinal scales of measurement can be tested. d) Calculations by hand or by
pocket calculator tend to be simpler. This is primarily due to the small sample
sizes typically involved.

PTS: 1 OBJ: Section 14.1

3. The chapter lists two major disadvantages to nonparametric testing. What are
they?

ANS:
a) Compared to parametric test, information in the data is used less efficiently,
and the power of the test will be lower. For this reason, a parametric test is
preferable whenever its assumptions have been met. b) Nonparametric testing
places greater reliance on statistical tables, if a computer statistical package or
spreadsheet is not being used.

PTS: 1 OBJ: Section 14.1

4. In general, when should a nonparametric technique be used instead of its

parameter counterpart?

ANS:
A nonparametric test should be used instead of its parametric counterpart
whenever: (a) data are of the nominal or ordinal scales of measurement, or (b)
data are of the interval or ratio scales of measurement but one or more other
assumptions, such as the normality of the underlying population distribution,
have not been met.

PTS: 1 OBJ: Section 14.1

5. What key feature distinguishes nonparametric from parametric tests?

ANS:
Nonparametric tests make no assumptions about the specific shape of the
population from which a sample was drawn; most of the tests seen in previous
chapters assumed normally distributed populations.

PTS: 1 OBJ: Section 14.1

6. What is the parametric counterpart to the Wilcoxon signed rank test for one
sample? Compare the assumptions involved in using the respective tests.

ANS:
The parametric counterpart to the Wilcoxon signed rank test is the one-sample t-
test. The one sample t-test assumes that the underlying population is normally
distributed and that the data are continuous on the ratio or interval scale. The
Wilcoxon signed rank test assumes that the underlying population is
approximately symmetric and that the data are continuous on the ratio or
interval scale.

PTS: 1 OBJ: Section 14.2

7. What is the parametric counterpart to the Wilcoxon signed rank test for paired
samples? Compare the assumptions involved in using the respective tests.

ANS:
The parametric counterpart to the Wilcoxon signed rank test for paired samples
is the paired samples t-test. Both tests assume continuous data on the interval
or ratio scale, and the data come in pairs. The t-test assumes that both
underlying populations are normally distributed, whereas the Wilcoxon test
assumes only that both distributions are fairly symmetric in shape.

PTS: 1 OBJ: Section 14.3

8. Differentiate between the Wilcoxon signed rank test and the Wilcoxon rank
sum test, and explain the circumstances under which each should be applied.

ANS:
The Wilcoxon rank sum test compares two independent samples, while the
Wilcoxon signed rank test can be used to compare two dependent samples. The
Wilcoxon rank sum test should be used with independent samples, and the
signed rank test should be used when dealing with pairs.

PTS: 1 OBJ: Section 14.4

9. What is the parametric counterpart to the Wilcoxon rank sum test? Compare
the assumptions involved in using the respective tests.
ANS:
The parametric counterpart to the Wilcoxon rank sum test is the two-sample
pooled-variances t-test for independent samples. The t-test assumes data on the
interval or ratio scale, independent random samples, normally-distributed
populations, and equal variances. The Wilcoxon rank sum test assumes data on
the ordinal, interval, or ratio scale and that the samples are independent
random samples from populations with similar shapes.

PTS: 1 OBJ: Section 14.4

10. Differentiate between the Kruskal-Wallis test and the one-way analysis of
variance in terms of their assumptions and the circumstances under which each
should be applied.

ANS:
The one-way analysis of variance test assumes that samples have been drawn
from normally distributed populations with equal variances. In addition, data
must be of the interval or ratio scale. The Kruskal-Wallis test requires neither
normal populations nor equal variances. The data must be at least ordinal, and
the samples are assumed to be randomly selected. The one-way ANOVA test is
preferred whenever the necessary assumptions are met.

PTS: 1 OBJ: Section 14.5

11. Compare the Friedman test with the randomized block ANOVA in terms of:
(a) their respective null and alternative hypotheses, and (b) the assumptions
required in order to use each test.

ANS:
a) The null and alternative hypotheses for the Friedman test and the randomized
block ANOVA are almost identical except that the Friedman test deals with
medians and the ANOVA test deals with means. b) Randomized block ANOVA
requires that observations be from normal populations with equal variances and
that the observations be measured on interval or ratio scale. The Friedman test
makes no assumptions about the underlying populations, and the observations
may be measured on the ordinal, interval, or ratio scale.
PTS: 1 OBJ: Section 14.6

12. What role does the binomial distribution play in the sign test, and when is it
permissible to use the normal approximation in carrying out the test?

ANS:
The sign test relies on the fact that, if the true population (of differences)
median is equal to zero, there is a 0.50 probability of obtaining a positive
difference. Thus, this is a binomial experiment and a difference will be either
positive or negative (ties are ignored). When the number of observations (non-
zero differences) is at least ten, the normal approximation may be used.

PTS: 1 OBJ: Section 14.7

13. Whether testing a single sample or comparing paired samples, how should
one go ahead deciding whether to use the sign test versus the Wilcoxon signed
rank test?

ANS:
The sign test does not use all of the information contained in the data; the data
are merely reduced to (+) and (-) signs, and magnitude is ignored. If the original
data are interval in nature, the Wilcoxon signed rank test will provide a more
powerful test.

PTS: 1

Chapter 15. Simple Linear

Regression and Correlation
Test Bank

TRUE/FALSE

1. True or False
In the sample regression line the term b0 is the y-intercept; this is the value of y
where the line intersects the y-axis whenever x = 0.

ANS: T PTS: 1 OBJ: Section 15.2

2. True or False
For a given data set of (x,y) values, an infinite number of possible regression
equations can be fitted to the corresponding scatter diagram, and each equation
will have a unique combination of values for the y-intercept b0 and the slope b1.
However, only one equation will be the “best fit” as defined by the least-squares
criterion.

ANS: T PTS: 1 OBJ: Section 15.2

3. True or False
The simple linear regression model assumes that for any given value of x, the
population of residuals will be normally distributed with a mean of zero and a
standard deviation of 1.

ANS: F PTS: 1 OBJ: Section 15.2

4. True or False
When the predicted values of y and the actual values of y are the same, the
standard error of estimate will be 0.0.

ANS: T PTS: 1 OBJ: Section 15.3

5. True or False
The simple linear regression model assumes that regardless of the value for x,
the standard deviation of the distribution of y values about the regression line is
the same.

ANS: T PTS: 1 OBJ: Section 15.2

6. True or False
The simple linear regression model assumes that the y values are statistically
independent of each other but the residuals are statistically dependent of each
other.

ANS: F PTS: 1 OBJ: Section 15.2

7. True or False
The least-squares criterion requires that the sum of the squared deviations
between the y values in the scatter diagram and the y values predicted by the
equation be minimized.

ANS: T PTS: 1 OBJ: Section 15.2

8. True or False
The value of the variation explained by the regression line can never be larger
than 1.0.

ANS: F PTS: 1 OBJ: Section 15.4

9. True or False
In a simple linear regression model, the residual is the horizontal distance from
the regression line to an observed data point.

ANS: F PTS: 1 OBJ: Section 15.3

10. True or False

The coefficient of determination is a number that indicates both the direction
and the strength of the linear relationship between the dependent and
independent variable.

ANS: F PTS: 1 OBJ: Section 15.4

11. True or False

The coefficient of determination can be described in terms of the total variation
in y versus the unexplained variation in y.

ANS: T PTS: 1 OBJ: Section 15.4

12. True or False

An ANOVA test based on SST and SSR is equivalent to t-test for the coefficient of
correlation and the slope.

ANS: T PTS: 1 OBJ: Section 15.5

MULTIPLE CHOICE

1. Simple linear regression requires that the scales of measurement be

expressed in either:
a. nominal or ordinal.
b. ordinal or ratio.
c. interval or ratio.
d. nominal or ratio.
e. nominal or interval.
ANS: C PTS: 1 OBJ: Section 15.1

2. Regardless of the value of x, the standard deviation of the distribution of y

values about the regression line is the same. This assumption of equal standard
deviations about the regression line is called:
a. random error.
b. heteroscedasticity.
c. homoscedasticity.
d. pooled variances.
e. residual analysis.
ANS: C PTS: 1 OBJ: Section 15.2

3. Another name for the residual term in a regression equation is:

a. random error.
b. heteroscedasticity.
c. homoscedasticity.
d. pooled variances.
e. residual analysis.
ANS: A PTS: 1 OBJ: Section 15.2

4. A regression analysis between sales (in $1000) and advertising (in $) resulted
in the following least squares line: = 80,000 + 5x. This implies that an:
a. increase of $1 in advertising is expected to result in an increase of $5 in sales.
b. increase $5 in advertising is expected to result in an increase of $5,000 in
sales.
c. increase of $1 in advertising is expected to result in an increase of $80,005 in
sales.
d. increase of $1 in advertising is expected to result in an increase of $5,000 in
sales.
ANS: D PTS: 1 OBJ: Section 15.2
5. A regression analysis between weight (y in pounds) and height (x in inches)
resulted in the following least squares line: = 120 + 5x. This implies that if the
height is increased by 1 inch, the weight is expected to:
a. increase by 1 pound.
b. decrease by 1 pound.
c. increase by 5 pounds.
d. decrease by 24 pounds.
ANS: C PTS: 1 OBJ: Section 15.2

6. A regression analysis between sales (in $1000) and advertising (in $100)
resulted in the following least squares line: = 75 +6x. This implies that if
advertising is $800, then the predicted amount of sales (in dollars) is:
a. $4875.
b. $123,000.
c. $487,500.
d. $12,300.
ANS: B PTS: 1 OBJ: Section 15.2

7. The residual is defined as the difference between the:

a. actual value of y and the estimated value of y.
b. actual value of x and the estimated value of x
c. actual value of y and the estimated value of x.
d. actual value of x and the estimated value of y.
ANS: A PTS: 1 OBJ: Section 15.2

8. Which of the following statements is true regarding the simple linear

regression model
a. is a value of the dependent variable and is a value of the independent
variable
b. is the y-intercept of the regression line.
c. is the slope of the regression line.
d. is a random error, or residual.
e. All of the above are true statements.
ANS: E PTS: 1 OBJ: Section 15.2
9. Which of the following table values would be appropriate for a 95%
confidence interval for the mean of y from a simple linear regression problem if
the sample size is 7?
a. 1.895
b. 2.015
c. 2.365
d. 2.571
e. 1.960
ANS: D PTS: 1 OBJ: Section 15.3

10. The vertical spread of the data points about the regression line is measured
by the:
a. regression coefficient.
b. standard error of estimate.
c. y-intercept.
d. homoscedasticity coefficient.
e. t-ratio.
ANS: B PTS: 1 OBJ: Section 15.3

11. In order to estimate with 95% confidence the expected value of y in a simple
linear regression problem, a random sample of 10 observations is taken. Which
of the following t-table values listed below would be used?
a. 2.228
b. 2.306
c. 1.860
d. 1.812
ANS: B PTS: 1 OBJ: Section 15.3

12. If the standard error of estimate = 18 and n = 10, then the error sum of
squares, SSE, is:
a. 2916.
b. 2592.
c. 1800.
d. 3240.
ANS: B PTS: 1 OBJ: Section 15.3
13. An indication of no linear relationship between two variables would be:
a. a coefficient of determination equal to 1.
b. a coefficient of determination equal to -1.
c. a coefficient of correlation of 0.
d. a coefficient of correlation equal to -1.
e. Both “A” and “B” are correct.
ANS: C PTS: 1 OBJ: Section 15.4

14. In publishing the results of some research work, the following values of the
coefficient of determination were listed. Which one would appear to be
incorrect?
a. 0.91
b. 0.06
c. 0.47
d. -0.64
e. 0.00
ANS: D PTS: 1 OBJ: Section 15.4

15. Given the least squares regression line = -2.88 + 1.77x, and a coefficient of
determination of 0.81, the coefficient of correlation is:
a. -0.88.
b. +0.88.
c. +0.90.
d. -0.90.
ANS: C PTS: 1 OBJ: Section 15.4

16. In a regression problem the following pairs of (x, y) are given: (2,1), (2,-1),
(2,0), (2,-2) and (2,2). That indicates that the:
a. coefficient of correlation is -1.
b. coefficient of correlation is 0.
c. coefficient of correlation is 1.
d. coefficient of determination is between -1 and 1.
ANS: B PTS: 1 OBJ: Section 15.4
17. The number of degrees of freedom associated with the standard error of
estimate is
a. n-1 since only the slope is estimated from sample data.
b. n-1 since only the intercept is estimated from sample data.
c. n-1 since only the predicted value of y is estimated from sample data.
d. n-2 since the slope and the intercept are estimated from sample data.
ANS: D PTS: 1 OBJ: Section 15.3

18. Correlation analysis is used to determine the:

a. strength of the relationship between x and y.
b. least squares estimates of the regression parameters.
c. predicted value of y for a given value of x.
d. coefficient of determination.
ANS: A PTS: 1 OBJ: Section 15.4

19. In a regression problem, if the coefficient of determination is 0.90, this

means that:
a. 90% of the y values are positive.
b. 90% of the variation in y can be explained by the regression line
c. 90% of the x values are equal.
d. 90% of the variation in x can be explained by regression line.
ANS: B PTS: 1 OBJ: Section 15.4

20. The regression line = 3 + 2x has been fitted to the data points (4,8), (2,5),
and (1,2). The residual sum of squares will be:
a. 10.
b. 15.
c. 13.
d. 22.
ANS: D PTS: 1 OBJ: Section 15.4

21. The following values are listed as coefficients of correlation (r). The one that
indicates an inverse relationship between the two variables x and y is:
a. 0.0.
b. -0.8.
c. 0.9.
d. 1.3.
e. -1.4.
ANS: B PTS: 1 OBJ: Section 15.4

22. For a given value of x, the estimation interval for an individual y observation
is called the:
a. confidence interval.
b. residual.
c. prediction interval.
d. least-squares interval.
e. standard error of estimate.
ANS: C PTS: 1 OBJ: Section 15.4

23. The value for SSE equals zero. This means that the coefficient of
determination (r 2 ) must equal:
a. 0.0.
b. -1.0.
c. 2.3.
d. -2.3.
e. 1.0.
ANS: E PTS: 1 OBJ: Section 15.4

24. All of the values of an independent variable equal the same number.
Regressing a dependent variable on this independent variable will result in a
coefficient of determination (r 2 ) of:
a. 0.0.
b. -1.0.
c. 2.3.
d. -2.3.
e. 1.0.
ANS: A PTS: 1 OBJ: Section 15.4

25. Correlation analysis requires that the scales of measurement be expressed

in either:
a. nominal or ordinal.
b. ordinal or ratio.
c. interval or ratio.
d. nominal or ratio.
e. nominal or interval.
ANS: C PTS: 1 OBJ: Section 15.4

26. For the values of the coefficient of determination listed below, which one
implies the greatest value of SSR (regression sum of squares) given that SST =
500?
a. 0.95
b. -1.00
c. 0.28
d. 0.00
e. -0.88
ANS: A PTS: 1 OBJ: Section 15.4

27. In simple linear regression, the coefficient of correlation r and the least
squares estimate of the population slope :
a. must have the same numerical value.
b. must have opposite signs.
c. must have the same sign.
d. may have opposite signs or the same sign.
ANS: C PTS: 1 OBJ: Section 15.4

28. If all the points in a scatter diagram lie on the least squares regression line,
then the coefficient of correlation:
a. must be 1.0.
b. must be -1.0.
c. must be either 1.0 or -1.0.
d. must be 0.
ANS: C PTS: 1 OBJ: Section 15.4

29. If the sum of squares due to regression (SSR) is 60, which of the following
must be true?
a. The coefficient of correlation is 0.9.
b. The total sum of squares (SST) is at least 60.
c. The y-intercept is positive.
d. The slope, b, is positive.
e. The coefficient of determination is 0.81.
ANS: B PTS: 1 OBJ: Section 15.6

NUMERIC RESPONSE

1. If the total variation in y values is 200, and the variation explained by

regression line is 180, then the coefficient of determination is equal to
____________________.

ANS: 0.90

PTS: 1 OBJ: Section 15.4

2. If the coefficient of correlation is -0.90, what percentage of the variation in y

is explained by the regression line?

ANS: 81%

PTS: 1 OBJ: Section 15.4

3. A simple linear regression problem produced the following sum of squares:

= 240, = 60, = 180

What percentage of the variation in y is explained by the regression line?

ANS: 75%

PTS: 1 OBJ: Section 15.4

COMPLETION

1. ____________________ provides a “best-fit” mathematical equation for the

values of two variables, x and y.

PTS: 1 OBJ: Section 15.4

8. The variation explained by regression line is denoted by ____________________,

while the variation not explained by regression line is denoted by
____________________.

ANS: SSR; SSE

PTS: 1 OBJ: Section 15.4

12. If the coefficient of correlation r is positive, then the dependent variable and
the independent variable x are said to be ____________________ related. However,
if r is negative, then x and y are said to be ____________________ related.

ANS: directly; inversely

PTS: 1 OBJ: Section 15.4

13. In a simple linear model, testing whether the slope of the population
regression line is zero is the same as testing whether or not the population
____________________ equals zero.

ANS: coefficient of correlation

PTS: 1 OBJ: Section 15.5

SHORT ANSWER

1. Briefly describe each of the following:

A) An inverse relationship between variables __________________________________

B) A direct relationship between variables __________________________________

C) A linear relationship between variables __________________________________

D) A curvilinear relationship between variables

__________________________________

ANS:
As x increases, y decreases, and vice versa.; The variables x and y increase or
decrease together.; A straight line is best for describing this relationship.; A
nonlinear curve best describes this relationship; There will be at least one x term
in which the exponent is some value other than 1.

PTS: 1 OBJ: Section 15.2

2. Briefly describe each of the following:

a) Homoscedasticity
b) Residual

ANS:
a) The assumption of equal population variance of the residuals
b) Random error; the difference between the actual and predicted value from
the regression line.

PTS: 1 OBJ: Section 15.2

3. Consider the following data values of variables x and y

x42643
y53765

ANS:

PTS: 1 OBJ: Section 15.2

12. Using the least-squares regression line, predict the salary of an employee
with 11 years of experience.

ANS:

x = 11

PTS: 1 OBJ: Section 15.2

13. The divisor of the standard error of estimate in simple linear regression is:

ANS:
n–2

PTS: 1 OBJ: Section 15.3

NARRBEGIN: GPA
The following table shows the grade point average (GPA) for 5 students along
with their entrance exam scores for MBA programs (GMAT). Develop a model
that would predict the GPA of a student based on their GMAT score.

Student GPA GMAT

1 3.5 6.7
2 3.1 5.4
3 3.2 4.8
4 4.0 7.0
5 3.6 5.9
6 3.2 5.2
7 3.7 7.2

NARREND
14. Determine the least-squares regression line.

NARRBEGIN: Teacher
A statistics teacher collected the following data to determine if the number of
hours a student studied during the semester could be used to predict the final
grade for the course.

Student Hours Studying Final Grade

1 42 92
2 58 95
3 32 81
4 39 78
5 37 75
6 51 88
7 49 85
8 45 85

NARREND
19. In testing the hypotheses vs. , what is the value of the test statistic?

ANS:
t = 2.797

PTS: 1 OBJ: Section 15.5

20. In testing the hypotheses vs. , what is the rejection region at the 0.05
significance level?

ANS:
|t| > 2.447

PTS: 1 OBJ: Section 15.5

21. In testing the hypotheses vs. , what is the conclusion at the 0.05 significance
level?

ANS:
Since t = 2.797 > 2.447, we reject the null hypothesis and conclude there is a
relationship between number of hours studying and the final grade.

PTS: 1 OBJ: Section 15.5

NARRBEGIN: X and Y
Consider the following data values of variables x and y
x 5 4 3 6 9 8 10
y 7 8 10 5 2 3 1

NARREND
22. Given that when a simple linear regression model applied to the data, it
produced the following residuals:

0.062, -0.195, 0.548, -0.682, 0.089, -0.168, and 0.346.

Apply the Lilliefors test to the residuals at = 0.05. What is your conclusion?

ANS:

PTS: 1 OBJ: Section 15.7

27.

What does the scatter diagram tell you about the relationship between x and y?

ANS:
The relationship between x and y is not linear

PTS: 1 OBJ: Section 15.7

28. Create a normal probability plot of the residuals

ANS:

PTS: 1 OBJ: Section 15.7

NARRBEGIN: Household
The following data was collected by a particular company to determine if a
relationship exists between the number of people in a household and weekly
food expenditures.

Household Number in Household Weekly Food Expenses

1 2 $95
2 3 $137
3 5 $165
4 2 $105
5 4 $227
6 4 $240
7 5 $185

NARREND
29. Identify the independent and dependent variables.

ANS:
Independent variable: Number in Household

Dependent variable: Weekly Food Expenses

PTS: 1 OBJ: Section 15.7

30. Determine the least-squares regression line.

NARREND
37. Determine the least-squares regression line.

NARRBEGIN: Unemployed
The data below are for the number of unemployed persons (in millions) and the
federal unemployment insurance payments (in billions of dollars) for the years
1978 – 1985. Some economists state that these two variables are positively
related.
Year 1978 1979 1980 1981 1982 1983 1984 1985
Federal Unemployment Insurance Payments 11.8 10.7 18.0 19.7 23.7 31.5 18.4
16.8
Number of Unemployed Persons 6.2 6.1 7.6 8.3 10.7 10.7 8.5 8.3

NARREND
42. Use these data to develop an estimated regression equation.

= ____________________

ANS:

PTS: 1 OBJ: Section 15.7

43. Assume that a simple linear regression model is appropriate for these data.
Identify the dependent and independent variables.

Dependent variable Y: _______________________________

Independent variable X: ______________________________

ANS:
Federal unemployment insurance payments; Number of unemployed persons

PTS: 1 OBJ: Section 15.7

44. Use these data to develop a scatter diagram for these data.

ANS:

PTS: 1 OBJ: Section 15.7

45. What does a scatter diagram of these data indicate about the relationship
between these two variables?
ANS:
The number of unemployed persons and the federal unemployment insurance
payments appear to be positively linearly related.

PTS: 1 OBJ: Section 15.7

ANS:
0.9765; It has a positive sign since the slope of the regression line is positive.

PTS: 1 OBJ: Section 15.7

58. Conduct a test of the population coefficient of correlation to determine at the
5% significance level whether a linear relationship exists between years of
experience and sales.

ANS:
= 0 (There is no linear relationship)H0:
0 (A linear relationship exists)H1:
Rejection region: | t | > 2.306 Test statistic: t = 12.8258. Since t = 12.8258 >
2.306, we reject the null hypothesis. A linear relationship exists between years
of experience and sales.

PTS: 1 OBJ: Section 15.7

59. Conduct a test of the population slope to determine at the 5% significance

level whether a linear relationship exists between years of experience and sales.

ANS:
= 0 (There is no linear relationship)H0:
0 (A linear relationship exists)H1:
Rejection region: | t | > 2.306 Test statistic: t = 12.8258. Since t = 12.8258 >
2.306, we reject the null hypothesis. A linear relationship exists between years
of experience and sales.

PTS: 1 OBJ: Section 15.7

60. Predict with 95% confidence the monthly sales of a salesperson with 10
years of experience.

95% CI = ________________

Enter as (n1,n2) with no $ or “,” in the number.

ANS:
(15640,23253)

PTS: 1 OBJ: Section 15.7

61. Predict with 95% confidence the average monthly sales of all salespersons
with 10 years of experience.
95% CI10 yrs + = ________________

Enter as (n1,n2) with no $ or “,” in the number.

ANS:
(18290,20604)

PTS: 1 OBJ: Section 15.7

62. If the regression equation is , determine the predicted values of y.

ANS:
The values are: 8.630, 10.793, 19.447, 11.875, 17.284, 14.039, 21.610, 16.202,
30.264, 24.856

PTS: 1 OBJ: Section 15.7

63. If the regression equation is , calculate the residuals

ANS:
The residuals are: -1.630, -1.793, 0.553, 3.125, 0.716, -0.039, -1.610, 0.798,
-0.264, 0.144

PTS: 1 OBJ: Section 15.7

64. If the regression equation is , plot the residuals against the predicted values
of y. Does the variance appear to be constant?

ANS:

The variance appears constant. Heteroscedasticity does not appear to be a

problem

PTS: 1 OBJ: Section 15.7

65. If the regression equation is , compute the standardized residuals and

identify possible outliers.

ANS:
The standardized residuals are: -1.100, -1.210, 0.373, 2.108, 0.483, -0.026,
-1.086, 0.538, -0.178, 0.097. No outliers exist.
PTS: 1 OBJ: Section 15.7

ESSAY

1. A scatter diagram includes the following data points:

x32545
y 8 6 12 10 14

Two regression models are proposed:

Model 1: 1.2 + 2.5x

Model 2: 5.5 + 4.0x

Using the least squares method, which of these regression models provide the
better fit to the data? Why?

ANS:
SSE = 4.95 and 593.25 for models 1 and 2, respectively. Therefore, model 1 is
better than model 2.

PTS: 1 OBJ: Section 15.2

2. Which assumptions are required in using the simple linear regression model ?

ANS:
a) For any given value of x, the y values are normally distributed with a mean
that is on the regression line. b) Regardless of the value of x, the standard
deviation of the distribution of y values about the regression line is the same;
this is the assumption of homoscedasticity. c) The y values are statistically
independent of each other.

PTS: 1 OBJ: Section 15.2

3. In the sample regression line, what does the cap (^) over the y indicate?

ANS:
The (^) indicates that is the estimated value of the dependent variable y for a
given value x; that is, is an estimate of the (unknown) “true” value of y.

PTS: 1 OBJ: Section 15.2

4. What does the least-squares criterion have to do with obtaining a regression
line for a given set of data?

ANS:
The least squares criterion is one method used to determine the “best fitting”
line. The criterion requires that the sum of the squared deviations between the
actual y values and values predicted by the regression line be minimized.

PTS: 1 OBJ: Section 15.2

5. A scatter diagram includes the data points:

(x = 2, y = 5),
(x = 4, y = 12),
(x = 6, y = 20),
(x = 8, y = 28), and
(x = 10, y = 30).

Two regression lines are proposed:

(1) = -.6 + 3x
(2) = -1 + 5 x

Using the least squares criterion, which of these regression lines is the better fit
to the data? Why?

ANS:
The residual sum of squares, for the two regression proposed lines (1) and (2)
are 28.8 and 628, respectively. Using the least squares criterion, the first line fits
the data much better.

PTS: 1 OBJ: Section 15.2

6. Differentiate between a confidence interval and a prediction interval.

ANS:
A confidence interval provides a range of possible values for the mean value of y
given a specific value of x. The point estimate for the mean will fall on the
regression line. A prediction interval provides a range of possible values for an
individual observation of y given a value of x.

PTS: 1 OBJ: Section 15.3

7. Is it possible for the standard error of the estimate to be equal to zero? If so,
under what circumstances?

ANS:
The standard error of the estimate will be zero only when every data point falls
on the regression line, that is, when the sum of the squared residual terms is
also zero.

PTS: 1 OBJ: Section 15.3

8. What is the standard error of estimate, and what role does it play in simple
linear regression and correlation analysis?

ANS:
The standard error of the estimate is a measure which describes the dispersion
of the data points above and below the regression line. The standard error may
be used as a measure of how well the regression line fits the data. In addition,
the standard error is used in calculating confidence intervals for the mean value
of y given a specific value of x, and in calculating the prediction interval for an
individual y observation.

PTS: 1 OBJ: Section 15.3

9. What happens to the width of a prediction interval for y as the x value on

which the interval estimate is based gets farther away from the mean of x?
Why?

ANS:
The prediction interval for y gets wider as the x value on which the interval
estimate is based gets farther away from the mean of x because there is less
error in making interval estimates based on x values that are closer to the
mean. This can be seen in the formula; the numerator of the fraction under the
square root includes This value, of course, increases as the x value moves away
from the mean.

PTS: 1 OBJ: Section 15.3

10. For a given value of x, which will be wider, a 90% confidence interval or a
90% prediction interval? Explain

ANS:
For a given value of s, the prediction interval will always be wider than the
confidence interval. The confidence interval is concerned with the mean value of
y only; the prediction interval is concerned with all of the possible values of y.

PTS: 1 OBJ: Section 15.3

11. Differentiate between the coefficients of correlation and determination. What

information does each one offer that the other does not?

ANS:
The coefficient of correlation (r) describes both the direction and the strength of
the linear relationship between two variables. The coefficient of determination
expresses the proportion of the variation in the dependent variable (y) that is
explained by the regression line, but it does not indicate the direction of the
relationship.

PTS: 1 OBJ: Section 15.4

12. The coefficient of correlation between variables y and x is 0.80. Calculate

and interpret the value of the coefficient of determination.

ANS:
The coefficient of determination is 0.64 (or the coefficient of correlation
squared). This means that 64% of the variation in y and is explained by x.

PTS: 1 OBJ: Section 15.4

13. The values of y and x are inversely related, and 84.64% of the variation in y
is explained by the regression equation. What is the coefficient of correlation?
ANS:
Since 84.64% of the variation in y is explained by x .8464 is the coefficient of
determination. The square root of the coefficient of determination, with the
appropriate sign, is equal to the coefficient of correlation. Therefore, the
coefficient of correlation is -.92. We know this is negative because y and x are
inversely related.

PTS: 1 OBJ: Section 15.4

14. For a set of data, the total variation or sum of squares for y is SST =180, and
the error sum of squares SSE =54. What proportion of the variation in y is
explained by the regression equation?

ANS:
The coefficient of determination = = 1- 0.30 = 0.70. This means that 70% of the
variation in y is explained by x.

PTS: 1 OBJ: Section 15.4

15. In regression and correlation analysis, what are the two components of the
total amount of variation in the y values? Define the coefficient of determination
in terms of these components.

20. For n = 37 data points, r2 = 0.49. At the 0.02 level of significance, can we
conclude that the true coefficient of correlation could be zero?

ANS:
This calls for the following hypothesis test:
(there is no linear relationship) and (there is a linear relationship).

This is a two-tail t-test with and d.f.=37-2-35. The critical values of t are -2.438
and +2.438. The calculated value of the test statistic is:

Since the calculated test statistic falls outside the critical values, we reject There
is no evidence to suggest that a linear relationship exists between x and y.

PTS: 1 OBJ: Section 15.5

21. What is residual analysis, and what information can it provide?

ANS:
Residual analysis refers to a broad class of tests which can be performed using
the error terms from a regression line to test the assumptions of regression
analysis. Residual analysis can test the assumption of normal distribution of the
error terms, the assumption of equal standard deviations of the error terms, and
the assumption that the error terms are independent from one another. In
residual analysis, we may also “flag” error values that are especially large.

PTS: 1 OBJ: Section 15.6

22. What is spurious correlation? Provide a real or hypothetical example where

two variables might exhibit such a relationship.

ANS:
Spurious correlation occurs whenever two variables are highly correlated but
there is little evidence to suggest any causation. For instance, the closing of the
Dow Jones Industrial Average (DJIA) could be highly correlated with the winner of
the Super Bowl. (When the NFC wins it has historically tended to close higher for
the year, and when the AFC wins it has tended to close lower for the year).
However, there is no evidence to suggest that the Super Bowl winning
conference causes the DJIA to move up or down. Likewise, there is no evidence
to suggest that the movement in the DJIA causes one conference or the other to
win the Super Bowl.

PTS: 1 OBJ: Section 15.6

23. What is the Lilliefors test, and how can it contribute to regression and
correlation analysis?

ANS:
The Lilliefors test, introduced in Chapter 14, is used to examine whether the
residuals could have come from a normally distributed population. Recall that
one of the assumptions of the regression model is whether the residuals are
from a normal population with a mean of zero.

PTS: 1 OBJ: Section 15.6

24. A firm finds the coefficient of correlation between y = annual sales and x =
annual expenditure on research and development to r = +.095. Comment on
the likely direction of causation, if any, between these variables.

ANS:
Correlation does not necessarily imply causation of any kind. Perhaps sales have
increased as a result of better products which came from more money invested
in research and development. On the other hand, perhaps the R&D budget is set
on past or anticipated sales. It is also very possible that both of these variables
have simply increased over time.

PTS: 1 OBJ: Section 15.6

Chapter 16. Multiple

Regression and Correlation
Test Bank

TRUE/FALSE

1. True or False
Multiple regression analysis examines the linear relationship between a
dependent variable (y) and two or more independent variables (x1, x2, and so
on).

ANS: T PTS: 1 OBJ: Section 16.1

2. True or False
Multicollinearity is a situation in which two or more of the independent variables
are highly correlated with each other.

ANS: T PTS: 1 OBJ: Section 16.7

3. True or False
For each y term in the multiple regression equation, the corresponding is
referred to as the partial regression coefficient.

ANS: F PTS: 1 OBJ: Section 16.2

4. True or False
In interpreting the multiple regression equation, it can be a mistake to conclude
that one independent variable is more important than another just because its
partial regression coefficient happens to be large.

ANS: T PTS: 1 OBJ: Section 16.2

5. True or False
It is a good idea to make point estimates based on x values that lie beyond the
range of the underlying data.

ANS: T PTS: 1 OBJ: Section 16.2

6. True or False
The purpose of the multiple correlation analysis is to measure the strength of
the relationship between the dependent (y) and the set of independent (x)
variables.
ANS: T PTS: 1 OBJ: Section 16.4

7. True or False
A dummy variable is used to incorporate qualitative data into the analysis.

ANS: T PTS: 1 OBJ: Section 16.7

MULTIPLE CHOICE

1. In reference to the equation: = -0.25 + 0.08×1 + 0.10×2, the value -0.25 is

the:
a. predicted value of y.
b. partial regression coefficient for x1.
c. partial regression coefficient for x2.
d. predicted value of y when x1 = 0 and x2 = 0.
e. predicted value of when x1 = 2 and x2 = 1.
ANS: D PTS: 1 OBJ: Section 16.2

2. In reference to the equation: = -0.25 + 0.08×1 + 0.10×2, the value 0.01 is

the:
a. predicted value of y.
b. partial regression coefficient for x1.
c. partial regression coefficient for x2.
d. predicted value y when x1 = 0 and x2 = 0.
e. predicted value of y when x1 = 2 and x2 = 1.
ANS: E PTS: 1 OBJ: Section 16.2

3. In reference to the equation: = -0.25 + 0.08×1 + 0.10×2, the value 0.08 is

the:
a. predicted value of y.
b. estimated change in y when x1 increases by one unit.
c. estimated change in y when x2 increases by one unit.
d. predicted value of y when x1 = 0 and x2 = 0.
e. predicted value of y when x1= 2 and x2 = 1.
ANS: B PTS: 1 OBJ: Section 16.2
4. A multiple regression model has the form = b0 + b1x1 + b2x2. The
coefficient b1 is interpreted as the:
a. estimated change in y per unit change in x1.
b. estimated change in y per unit change in x1, holding x2constant.
c. estimated change in y per unit change in x1, when x1 and x2 values are
correlated.
d. estimated change in y per unit change in x2, holding x1 constant.
ANS: B PTS: 1 OBJ: Section 16.2

5. A multiple regression model has the form: = 5.25 + 2.5×1 + 4×2. As x2

increases by 1 unit, holding x1 constant, then the value of y will increase by:
a. 2.5 units.
b. 7.75 units.
c. 4 units on average.
d. 11.75 units on average.
ANS: C PTS: 1 OBJ: Section 16.2

6. For the multiple regression model = 50 + 25×1 – 10×2 + 8×3, if x2 were to

increase by 5, holding x1 and x3 constant, the value of y would:
a. increase by 5.
b. increase by 50.
c. decrease on average by 5.
d. decrease on average by 50.
ANS: D PTS: 1 OBJ: Section 16.2

7. For the multiple regression model = 3 – 4×1 + 5×2 + 2×3, a unit increase in
x1, holding x2 and x3 constant, results in:
a. an increase of 4 units in the value of y.
b. a decrease of 4 units in the value of y.
c. a decrease of 4 units, on average, in the value of y.
d. an increase of 6 units in the value of y.
ANS: C PTS: 1 OBJ: Section 16.2

8. The amount of variation in the dependent variable that is not explained by

the multiple regression equation is known as:
a. total sum of squares.
b. residual sum of squares.
c. regression sum of squares.
d. treatment sum of squares.
ANS: B PTS: 1 OBJ: Section 16.3

9. A multiple regression analysis includes 25 data points and 4 independent

variables results in SST = 200 and SSR = 150. The multiple standard error of
estimate will be:
a. 1.333.
b. 6.124.
c. 2.500.
d. 1.581.
ANS: D PTS: 1 OBJ: Section 16.3

10. A multiple regression equation includes 3 independent variables, and the

coefficient of multiple determination is 0.64. The percentage of the variation in y
that is explained by the regression equation is:
a. 64%.
b. 80%.
c. 36%.
d. 21%.
ANS: A PTS: 1 OBJ: Section 16.4

11. In a multiple regression model, the following statistics are given: SSE = 100,
R2 = 0.995, k = 5, n = 15. The multiple coefficient of determination adjusted for
degrees of freedom is:
a. 0.955.
b. 0.992.
c. 0.900.
d. 0.855.
ANS: B PTS: 1 OBJ: Section 16.4

12. The adjusted multiple coefficient of determination is adjusted for the:

a. number of regression parameters including the y-intercept.
b. number of dependent variables and the sample size.
c. number of independent variables and the sample size.
d. coefficient of correlation and the significance level.
ANS: C PTS: 1 OBJ: Section 16.4

13. In a multiple regression analysis involving 40 observations and 4

independent variables, SST = 375 and SSE = 75. The multiple coefficient of
determination is:
a. 0.8333.
b. 0.8000.
c. 0.1875.
d. 0.9375.
ANS: B PTS: 1 OBJ: Section 16.4

14. In order to test the significance of a multiple regression model involving 4

independent variables and 30 observations, the numerator and denominator
degrees of freedom (respectively) for the critical value of F are:
a. 4 and 30.
b. 3 and 29.
c. 4 and 25.
d. 5 and 31.
ANS: C PTS: 1 OBJ: Section 16.5

15. In a multiple regression analysis involving k independent variables and n

data points, the degrees of freedom associated with the error sum of squares is:
a. k – 1.
b. n – k – 1.
c. n – 1.
d. n – k.
ANS: B PTS: 1 OBJ: Section 16.5

16. In a regression model involving 40 observations, the following estimated

regression model was obtained: = 10 + 3×1 + 5×2 + 6×3. For this model, SSR
= 300 and SSE = 75. Then, the value of MSR is:
a. 100.
b. 225.
c. 25.
d. 75.
ANS: A PTS: 1 OBJ: Section 16.5

17. In a regression model involving 50 observations, the following estimated

regression model was obtained. = 51.4 + 0.70×1 + 0.679×2 – 0.378×3. For this
model SST = 120,524 and SSR = 85,400. Then, the value of MSE is:
a. 763.565.
b. 702.480.
c. 1708.0.
d. 2410.48.
ANS: A PTS: 1 OBJ: Section 16.5

18. In testing the significance of a multiple regression model in which there are
three independent variables, the null hypothesis is:
a. H0: .
b. H0: .
c. H0: .
d. H0: .
ANS: C PTS: 1 OBJ: Section 16.5

NUMERIC RESPONSE

1. In a multiple regression problem, the regression equation is given by = 58.0 –

5.66×1 + 0.61 x2. Compute the point estimate for y when x1 = 3 and x2 = 4.

ANS: 43.46

PTS: 1 OBJ: Section 16.2

2. A health science-kinesiology program to lose weight collected data from ten

students. Sex was coded as 1 = female and 0 = male. The regression equation
obtained was given by: Pounds lost = 15.8 + 0.65 time + 6.00 sex What is the
estimated weight loss of a female who stayed in the program for 5 time periods?

ANS: 25.05
PTS: 1 OBJ: Section 16.2

3. A health science-kinesiology program to lose weight collected data from ten

students. Sex was coded as 1 = female and 0 = male. The regression equation
obtained was given by: Pounds lost = 15.8 + 0.65 time + 6.00 sex. What is the
estimated weight loss of a male who stayed in the program for 5 time periods?

ANS: 19.05

PTS: 1 OBJ: Section 16.2

4. Consider the multiple regression equation, = 80 + 15×1 – 5 x2 + 100×3. If x1

= 10, x2 = 4, x3 = 12, what is the estimated value of y?

ANS: 1410

PTS: 1 OBJ: Section 16.2

5. A multiple regression model has three independent variables. The following

values of y are given:

Compute the total sum of squares (SST).

SST = ____________________

ANS: 1258.5

PTS: 1 OBJ: Section 16.4

6. For a multiple regression model the following statistics are given: SSE = 40,
SST = 200, k = 4, n = 20. Calculate the coefficient of determination adjusted for
degrees of freedom.

ANS: 0.747

PTS: 1 OBJ: Section 16.4

7. In a regression model involving 25 observations, the following estimated

regression model was obtained:

= 60 + 2.8×1 + 1.2×2 – x3. For this model, SST = 600 and SSE = 150. Calculate
the value of the F statistic for testing the significance of this model.
F = ____________________

ANS: 21.0

PTS: 1 OBJ: Section 16.5

NARRBEGIN: States
Concern over the number of car thefts grew into a project to determine the
relationship between car thefts by state and these variables:

x1 = Police per 10,000 persons, by state

x2 = Expenditure by local government for police protection, in thousands, by
state
x3 = New passenger car registrations, in thousands, by state.

Data from 13 states were collected. The MINITAB regression results are:
NARREND
8. Compute the multiple standard error of estimate (se) from the regression
results.

ANS: 10.14889

PTS: 1 OBJ: Section 16.6

9. How much of the variation in thefts is explained by the model?

ANS: 0.9727

PTS: 1 OBJ: Section 16.6

NARRBEGIN: Motor Vehicle

In order to predict motor vehicle purchases for the U.S., the coefficients of a
multiple regression equation were estimated using 25 years of data. The
variables were:

y = motor vehicle purchases (billions of dollars)

x1 = disposable personal income (billions of dollars)
x2 = U. S. population (millions of persons)
x3 = automobile installment credit (billions of dollars)
Part of the results using MINITAB was:
NARREND
10. Use the values in the analysis of variance table to compute the multiple
standard error of the estimate.

ANS: 5.305

PTS: 1 OBJ: Section 16.6

11. Use the values in the analysis of variance table to compute R2 using the
values for SST and SSE or SSR.

ANS: 0.982

PTS: 1 OBJ: Section 16.6

COMPLETION

1. With four or more variables, the regression equation becomes a mathematical

entity called a ____________________.

ANS: hyperplane

PTS: 1 OBJ: Section 16.2

2. The ____________________ is the proportion of the variation in y that is

explained by the multiple regression equation.

ANS: coefficient of determination

PTS: 1 OBJ: Section 16.4

3. A dummy variable will have a value of either ____________________ or

____________________, depending on whether a given characteristic is present or
absent.

ANS:
one; zero
1, 0

PTS: 1 OBJ: Section 16.7

SHORT ANSWER

1. A health science-kinesiology program to lose weight collected data from ten

students. Sex was coded as 1 = female and 0 = male. The regression equation
obtained was given by: Pounds lost = 15.8 + 0.65 time + 6.00 sex. For the same
length of time in the program, compare the weight loss of a female to a male.
What is your conclusion?

ANS:
The weight loss of a female compared to a male is 6 more pounds.

PTS: 1 OBJ: Section 16.2

2. Explain each of the terms in the multiple regression model:

ANS:
yi = a value of the dependent variable, y
= a constant
xi… = values of the independent variables
…. = partial regression coefficients for independent variables
= random error, or residual

PTS: 1 OBJ: Section 16.2

3. Consider the multiple regression equation, = 80 + 15×1 – 5 x2 + 100×3.

Identify the y-intercept and partial regression coefficients:

y-intercept: ____________________

x1: ____________________

x2: ____________________

x3: ____________________

ANS:
80; 15; -5; 100

PTS: 1 OBJ: Section 16.2

4. Consider the multiple regression equation, = 80 + 15×1 – 5×2 + 100×3. If x3
were to increase by 5, what change would be necessary in x2 in order for the
estimated value of y to remain unchanged?

x2 would by .

ANS:
Increase; 100

PTS: 1 OBJ: Section 16.2

ANS:
SSE = 0.148.

PTS: 1 OBJ: Section 16.3

11. Calculate the total sum of squares.

ANS:
SST = 0.634

PTS: 1 OBJ: Section 16.3

12. Calculate the coefficient of multiple determination.

ANS:

g = ____________________

h = ____________________

i = ____________________

ANS:
25.277; 2.808; -2.367; 3.897; 0.423; 562; 206; 15.189; 13.562

PTS: 1 OBJ: Section 16.5

NARRBEGIN: States
Concern over the number of car thefts grew into a project to determine the
relationship between car thefts by state and these variables:

x1 = Police per 10,000 persons, by state

x2 = Expenditure by local government for police protection, in thousands, by
state
x3 = New passenger car registrations, in thousands, by state.

Data from 13 states were collected. The MINITAB regression results are:
NARREND
24. Do the partial regression coefficients have the algebraic sign you might
expect?

ANS:
The sign for b1 is questionable since it implies the more police per 10,000
persons, the more car thefts taking place. The more spent for police protection
coefficient, b2, is questionable since it is positive; thus implying the more spent
the more car thefts. The sign for b3 is expected since the more new cars the
more to steal.

PTS: 1 OBJ: Section 16.6

25. Perform a test for each partial regression coefficient using a 0.05
significance level. Results:

Conclusion: _________________________________________________________
ANS:
Coef t-ratio p-values
1.2831 1.38 0.200
0.018827 2.23 0.053
0.09686 2.74 0.023

3 is non zero.Only the b3 coefficient is greater than 2.262, or has a p-value

smaller than 0.05; Reject H0 and infer that the population coefficient

PTS: 1 OBJ: Section 16.6

26. What, if any, multicollinearity do you detect?

ANS:
Multicollinearity is correlation between independent variables. Expenditures for
police and registration are highly correlated, indicating a multicollinearity
problem.

PTS: 1 OBJ: Section 16.6

27. Test the significance of the regression equation at the 0.01 level of
significance.

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

ANS:
F = 107.14; F critical = 6.99; Reject H0

A marketing analyst is interested in predicting prospective buyer’s knowledge
about compact disc players. A random sample of 36 buyers was taken, a
questionnaire about compact disc players completed, and information about
education, income and age was obtained. In estimating the equation, the
variables were:

y = knowledge about compact disc players

x1 = education (years)
x2 = age
x3 = income (thousands of dollars)

The resulting output using MINITAB was:

NARREND
32. Identify b0, b1, and b3.

b0 = ____________________

b1 = ____________________

b3 = ____________________

ANS:
50.168; 4.3609; -0.0682

PTS: 1 OBJ: Section 16.6

33. Identify the coefficient of multiple determination, R2.

Interpret the value.

ANS:
0.85; It means that 85% of the variation in knowledge about compact disc
players is explained by the variation in education, age and income variables.

PTS: 1 OBJ: Section 16.6

34. Predict the questionnaire score for a buyer who is 41 years of age, has 13
years of education, and $39,000 income.

ANS:
= 78.301

PTS: 1 OBJ: Section 16.6

NARRBEGIN: Motor Vehicle

In order to predict motor vehicle purchases for the U.S., the coefficients of a
multiple regression equation were estimated using 25 years of data. The
variables were:

y = motor vehicle purchases (billions of dollars)

x1 = disposable personal income (billions of dollars)
x2 = U. S. population (millions of persons)
x3 = automobile installment credit (billions of dollars)

Part of the results using MINITAB was:

NARREND
35. Use the values in the analysis of variance table to find MSR and MSE.

MSR = ____________________

MSE = ____________________

ANS:
10874.66; 28.14285

PTS: 1 OBJ: Section 16.6

NARRBEGIN: Professor
A statistics professor investigated some of the factors that affect an individual
student’s final grade in his course. He proposed the multiple regression model
where:

y = final mark (out of 100)

x1 = number of lectures skipped
x2 = number of late assignments
x3 = mid-term test mark (out of 100)

The professor recorded the data for 50 randomly selected students. The
computer output is shown below.
NARREND
36. Do these data provide enough evidence to conclude at the 5% significance
level that the model is useful in predicting the final mark?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

ANS:
F = 6.558; F critical = 2.84; Reject H0

PTS: 1 OBJ: Section 16.8

37. Do these data provide enough evidence to conclude at the 5% significance

level that the final mark and the number of skipped lectures are linearly related?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

ANS:
t = -1.916; t critical = -2.013; Do not reject H0

PTS: 1 OBJ: Section 16.8

38. Do these data provide enough evidence at the 5% significance level to

conclude that the final mark and the number of late assignments are negatively
linearly related?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

ANS:
t = -1.035; t critical = -1.679; Do not reject H0

PTS: 1 OBJ: Section 16.8

39. Do these data provide enough evidence at the 1% significance level to

conclude that the final mark and the mid-term mark are positively linearly
related?

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

ANS:
t = 4.846; t critical = 2.410; Reject H0

PTS: 1 OBJ: Section 16.8

40. What is the coefficient of determination?

What does this statistic tell you?

ANS:
0.30; This means that 30% of the variation in the student’s final grade in
statistics is explained by the three variables: number of lectures skipped,
number of late assignments, and mid-term test grade, while 70% remains
unexplained.

PTS: 1 OBJ: Section 16.8

41. Interpret the coefficients b1 and b3.

b1 = ____________________

Interpretation: _____________________________________________________

b3 = ____________________
Interpretation: _____________________________________________________

ANS:
b1 = -3.18; This tells us that for each additional lecture skipped, the student’s
final score on average decreases by 3.18 points (assuming that the other
independent variables in the model are held constant).;
b2 = 0.63; This tells us that for each additional mid-term test score point, the
student’s final score on average increases by .63 points (assuming that the
other independent variables in the model are held constant).

PTS: 1 OBJ: Section 16.8

ESSAY

1. In multiple regression, to what does the descriptor “multiple” refer?

PTS: 1 OBJ: Section 16.1

5. What assumptions are required in using the multiple regression model?

ANS:
In terms of the residual component of the model, the assumptions underlying
multiple regression are: a) For any given set of values for the independent
variables, the population of residuals will be normally distributed with a mean of
zero and a standard deviation of . b) The standard deviation of the error terms is
the same regardless of the combination of values taken on by the independent
variables. c) The error terms are statistically independent from each other.

PTS: 1 OBJ: Section 16.2

6. In simple linear regression, the regression equation is a straight line. In

multiple regression, what geometric form is taken by the regression equation
when there are two independent variables? When there are three or more
independent variables?

ANS:
When there are two independent variables, the regression equation can be
thought of in terms of a geometric plane. When there are three or more
independent variables, the regression equation becomes a mathematical entity
called a hyperplane. It is impossible to visually summarize a regression with
three or more independent variables because it will be in four or more
dimensions.

PTS: 1 OBJ: Section 16.2

7. What does the numerical value of the multiple standard error of estimate (se)
reflect?

ANS:
The numerical value of se reflects the amount of scatter, or dispersion, of data
points about the plane (or hyperplane) represented by the multiple regression
equation.

PTS: 1 OBJ: Section 16.3

8. What is the multiple standard error estimate?

ANS:
The multiple standard error of the estimate is an indication of the amount of
scatter of the data points about the regression surface. It is analogous to the
standard error of the estimate for simple regression.

PTS: 1 OBJ: Section 16.3

9. What is the coefficient of multiple determination, and what does it tell us

about the relationship between y and the independent variables.

ANS:
The coefficient of multiple determination (R2) is analogous to the coefficient of
determination in simple linear regression. It is the proportion of variation in y
that is explained by the multiple regression equation.

PTS: 1 OBJ: Section 16.4

10. Some computer packages report an adjusted R2 along with the unadjusted
R2. In general, why is the adjusted R2 smaller, and under what conditions will it
approach the size of the unadjusted R2?

ANS:
The R2 has been adjusted for the degrees of freedom. If the number of variables
is large relative to the number of observations, R2 will exaggerate the strength
of the linear relationship. The adjusted R2 will get closer to R2 as sample sizes
become larger relative to the number of variables.
PTS: 1 OBJ: Section 16.4

11. Among the results of a multiple regression analysis are the following sum-of-
squares terms: SST, SSR, and SSE. What does each term represent, and how do
the terms contribute to our understanding of the relationship between y and the
set of independent variables.

ANS:
SST is the total variation in the y values, SSR is the variation in the y values that
is explained by the regression, and SSE is the variation in the y values that is not
explained by the regression. The coefficient of multiple determination is equal to
1 – (SSE/SST), or SSR/SST. If SSE is small compared to SST, SSR will be large
compared to SST, and the multiple regression equation will explain a large
portion of the variation in y. Recall that SST = SSR + SSE.

PTS: 1 OBJ: Section 16.4

12. What is the relationship between:

(A) the results of the hypothesis test examining whether b2 differs significantly
from zero at the 0.05 level and

(B) the 95% confidence interval for .

ANS:
Both of these tests will reach the same conclusion. If the confidence interval for
does not include zero, the hypothesis test will reject the null hypothesis. On the
other hand, if the confidence interval for does contain zero, the hypothesis test
will not reject the null hypothesis.

PTS: 1 OBJ: Section 16.5

13. What kind of test is performed in evaluating the overall significance of a

multiple regression equation? In evaluating the significance of the individual
partial regression coefficients?

ANS:
An ANOVA test is used to evaluate the overall significance of a multiple
regression equation. If the F calculated in the ANOVA exceeds the critical F, the
null hypothesis of no significance is rejected. Individual t-tests are used to
evaluate the significance of the individual partial regression coefficients.

PTS: 1 OBJ: Section 16.5

14. What role does the normal probability plot play in examining whether the
multiple regression model is appropriate for a given set of data?

ANS:
The normal probability plot is used to examine whether the residuals could have
come from a normally distributed population. One of the assumptions underlying
multiple regression analysis is that the residuals are normally distributed with a
mean of zero.

PTS: 1 OBJ: Section 16.6

15. Discuss residual analysis in terms of the assumptions required for using the
multiple regression model.

ANS:
Residual analysis can be used to examine the residuals with respect to the
assumptions underlying multiple regression analysis. We can do many things
with residual analysis, including: (1) constructing a histogram of the residuals as
a rough check to see if they are approximately normally distributed, (2)
constructing a normal probability plot or applying the Lilliefors test to examine
whether the residuals could have come from a normally-distributed population,
(3) plotting the residuals versus each of the independent variables to see if they
exhibit some cycle or pattern with respect to that variable, and (4) plotting the
residuals versus the order in which the observations were recorded to look for
auto-correlation.

PTS: 1 OBJ: Section 16.6

16. What is a dummy variable, and how is it useful to multiple regression? Give
an example of three dummy variables that could be used in describing your
home town.
ANS:
A dummy variable is a variable that takes on a value of one or zero to indicate
the presence or absence of an attribute. Dummy variables can help explain
some of the variation in y due to the presence or absence of a characteristic.
Three dummy variables that can be used to describe one town versus another
are URBAN (1 if urban, 0 otherwise), MANUF (1 if durable goods manufacturing is
the major industry, 0 otherwise), and POPMIL (1 if the population is 1 million or
more, 0 otherwise). Other dummy variables could include the presence of a
major university, a major medical center, a major research institution, and many
more.

PTS: 1 OBJ: Section 16.7

17. What is multicollinearity?

ANS:
A situation in which two or more of the independent variables are highly
correlated with each other.

PTS: 1 OBJ: Section 16.7

18. A multiple regression equation has been developed for y = daily attendance
at a community swimming pool, x1 = temperature (degrees Fahrenheit), and x2
= weekend versus weekday, (x2 = 1 for Saturday and Sunday, and 0 for other
days of the week.) For the regression equation shown below, interpret each
partial regression coefficient: = 100 + 10×1 + 175×2.

ANS:
The partial regression coefficient for x1 implies that, holding the day of the week
constant, a one degree Fahrenheit increase in the temperature will result in an
increase of 10 in attendance. The partial regression coefficient for x2 implies
that the attendance increases by 175 people on Saturdays and Sundays
(assuming a constant temperature).

PTS: 1 OBJ: Section 16.7

Chapter 17. Model Building

Test Bank

TRUE/FALSE

1. True or False
For the second-order polynomial model , the shape of the curve will be
determined by the relative sizes of and and on their signs.

ANS: T PTS: 1 OBJ: Section 17.2

2. True or False
The second-order polynomial model allows the plotted line to reverse the
direction in which it is curving.

ANS: F PTS: 1 OBJ: Section 17.2

3. True or False
A qualitative variable such as gender can be included in regression analysis and
is referred to as a dummy variable.

ANS: T PTS: 1 OBJ: Section 17.4

4. True or False
Interaction between two predictor variables is present when the effect on E(y) of
a 1-unit increase in does not depend on the value of , and vice versa.

ANS: F PTS: 1 OBJ: Section 17.3

5. True or False
The first-order polynomial model is the same as the simple linear regression
model.

ANS: T PTS: 1 OBJ: Section 17.2

6. True or False
The coefficient of determination R2 for the third-order polynomial model is
always larger than R2 for the second-order polynomial model.

ANS: F PTS: 1 OBJ: Section 17.2

7. True or False
The model = is referred to as a multiplicative model with two predictor
variables.

ANS: T PTS: 1 OBJ: Section 17.5

8. True or False
The exponential model = b0b1x can be converted to a linear model by taking
the logarithms of both sides of the equation (either natural or common
logarithms can be used as long as we are consistent).

ANS: T PTS: 1 OBJ: Section 17.5

9. True or False
Data transformation may include converting x to its square root or inverse.

ANS: T PTS: 1 OBJ: Section 17.5

10. True or False

Multicollinearity is a situation in which the dependent variable is highly
correlated with two or more of the independent variables in a multiple
regression.

ANS: F PTS: 1 OBJ: Section 17.6

11. True or False

If level of education has four possible categories, four qualitative variables
would be needed to represent education in the regression model.

ANS: F PTS: 1 OBJ: Section 17.4

12. True or False

In general, we should attempt to use the simplest possible model that satisfies
the goal for which the model is being developed.

ANS: T PTS: 1 OBJ: Section 17.8

13. True or False

If the goal for the regression analysis is to interpret partial regression
coefficients in an attempt to better understand the relationship between the
dependent variable and one or more of the predictor variables, it will be
desirable to build a smaller model with predictor variables that are more
independent from each other.

ANS: T PTS: 1 OBJ: Section 17.8

14. True or False

A practical way to identify multicollinearity is to generate a standard deviation
matrix.

ANS: F PTS: 1 OBJ: Section 17.6

15. True or False

If two or more independent variables are highly correlated with each other,
multicollinearity is present, and the partial regression coefficients will be
unreliable.

ANS: T PTS: 1 OBJ: Section 17.9

MULTIPLE CHOICE

1. Consider the model described by the equation . The slope of the relationship
between and
a. is constant for all values of .
b. depends on the value of .
c. depends on the value of .
d. is constant for all values of .
ANS: B PTS: 1 OBJ: Section 17.3

2. The model is referred to as a:

a. polynomial model with one predictor variable.
b. polynomial model with p predictor variables.
c. polynomial model with (p + 1) predictor variables.
d. polynomial model with (x +1) predictor variables.
ANS: A PTS: 1 OBJ: Section 17.2

3. The model = b0 + b1x + b2x2 is referred to as a:

a. simple linear regression model.
b. first order model with one predictor variable.
c. second order model with one predictor variable.
d. third order model with one predictor variable.
ANS: C PTS: 1 OBJ: Section 17.2

4. The model is not suitable when

a. the relationship between y and x is linear.
b. the relationship between y and x is nonlinear.
c. the coefficients and are independent of one another.
d. the coefficients and are dependent of one another.
ANS: B PTS: 1 OBJ: Section 17.2

5. The model = b0 + b1x1 + b2x2 is used whenever the statistician believes

that:
a. E(y) is linearly related to x1 and the predictor variables do not interact.
b. E(y) is linearly related to x2 and the predictor variables do not interact.
c. Either A or B is correct.
d. Both A and B are correct.
ANS: D PTS: 1 OBJ: Section 17.3

6. The shape of the model described by the equation could be:

a. parabolic resembling an upright”U”.
b. parabolic resembling an upside-down”U”.
c. a straight line with an intercept and slope .
d. a straight line with an intercept and slope .
e. Both A and B.
ANS: E PTS: 1 OBJ: Section 17.2

7. The model = b0 + b1x1 + b2x2 + b3x1x2 is referred to as the:

a. first order model with two predictor variables with no interaction.
b. first order model with two predictor variables with interaction.
c. second order model with three predictor variables with no interaction.
d. second order model with three predictor variables with interaction.
ANS: B PTS: 1 OBJ: Section 17.3
8. The model = b0 + b1x1 + b2x2 is referred to as the:
a. first order model with one predictor variable.
b. first order model with two predictor variables.
c. second order model with one predictor variable.
d. second order model with two predictor variables.
ANS: B PTS: 1 OBJ: Section 17.3

9. In a first-order model with two predictors x1 and x2, an interaction term may
be used when:
a. the effect of x1 on the dependent variable is influenced by x2.
b. the effect of x2 on the dependent variable is influenced by x1.
c. the relationship between the dependent variable and the independent
variables is linear.
d. Both A and B are correct.
ANS: D PTS: 1 OBJ: Section 17.3

10. Consider the first-order regression model = 15 + 6×1 + 5×2 + 4x1x2. A unit
increase in x1 increases the value of y on average by:
a. 5.
b. 30.
c. 26.
d. an amount that depends on the value of x2.
ANS: D PTS: 1 OBJ: Section 17.3

11. Consider the model described by the equation . Which of the following
coefficients determine the initial slope of the line for small positive values for x.
a.
b.
c.
d.
ANS: B PTS: 1 OBJ: Section 17.2

12. Consider the first-order model = 70 + 35×1 – 10×2 + 5x1x2. A unit increase
in x2, while holding x1 constant at 1, changes the value of E(y) by:
a. -10.
b. -5.
c. 10.
d. 5.
ANS: B PTS: 1 OBJ: Section 17.3

13. Consider the model described by the equation . Which term provides a linear
component to the model?
a.
b.
c.
d.
ANS: B PTS: 1 OBJ: Section 17.2

14. Consider the model described by the equation . Which term provides a
nonlinear component to the model allowing the line to curve?
a.
b.
c.
d.
ANS: C PTS: 1 OBJ: Section 17.2

15. Consider the model described by the equation . Which term provides a
nonlinear component to the model enabling the line to reverse the direction of
curvature?
a.
b.
c.
d.
ANS: D PTS: 1 OBJ: Section 17.2

16. In regression analysis, qualitative variables are sometimes referred to as:

a. response variables.
b. dummy variables.
c. nonsense variables.
d. dependent variables.
ANS: B PTS: 1 OBJ: Section 17.4

17. In general, to represent a qualitative predictor variable that has n possible

categories we must create:
a. (n + 2) qualitative variables.
b. (n + 1) qualitative variables.
c. n qualitative variables.
d. (n – 1) qualitative variables.
ANS: D PTS: 1 OBJ: Section 17.4

18. Suppose that the estimated regression equation of a College of Business

graduates is given by: = 20,000 + 2000x + 1500D, where y is the starting
salary, x is the grade point average and D is a dummy variable which takes the
value of 1 if the student is a finance major and 0 if not. A hotel management
major graduate with a 3.5 grade point average would have an average starting
salary of:
a. $22,000.
b. $27,000.
c. $28,500.
d. $20,000.
ANS: B PTS: 1 OBJ: Section 17.4

19. In explaining the income earned by college graduates, which of the following
independent variables is best represented by a dummy variable?
a. Grade point average
b. Age
c. Number of years since graduating from high school
d. College major
ANS: D PTS: 1 OBJ: Section 17.4

20. In explaining students’ test scores, which of the following independent

variables would not best be represented by a dummy variable?
a. Gender
b. Race
c. Number of hours studying for the test
d. Marital status
ANS: C PTS: 1 OBJ: Section 17.4

21. In explaining the amount of money spent on children’s toys each year, which
of the following independent variables is best represented with a dummy
variable?
a. Age
b. Height
c. Gender
d. Weight
ANS: C PTS: 1 OBJ: Section 17.4

22. Multicollinearity in a regression model can be detected when

a. two or more independent variables are highly correlated with each other.
b. an independent variable known to be an important predictor ends up having a
partial regression coefficient that is not significant.
c. a partial regression coefficient that should be positive turns out to be
negative, or vise versa.
d. when an independent variable is added or removed , the partial regression
coefficients for the other independent variables change drastically.
e. All of the above could be evidence that multicollinearity is present in the
model.
ANS: E PTS: 1 OBJ: Section 17.6

23. In stepwise regression procedure, if two independent variables are highly

correlated, then:
a. both variables will enter the equation.
b. only one variable will enter the equation.
c. neither variable will enter the equation.
d. None of these is correct.
ANS: B PTS: 1 OBJ: Section 17.7

24. Stepwise regression is an iterative procedure that:

a. adds one independent variable at a time.
b. deletes one independent variable at a time.
c. adds one dependent variable at a time.
d. deletes one dependent variable at a time.
e. Both A and B are correct.
ANS: E PTS: 1 OBJ: Section 17.7

25. Stepwise regression is especially useful when there are:

a. a great many independent variables.
b. few independent variables.
c. a great many dependent variables.
d. few dependent variables.
ANS: A PTS: 1 OBJ: Section 17.7

26. In forward selection stepwise regression with ten predictor variables, which
of the following statements is correct?
a. The procedure starts with 10 predictor variables and eliminate one predictor
at each iteration.
b. The procedure starts with 2 predictor variables and add one predictor at each
iteration.
c. The procedure starts with 1 predictor variable and add one predictor at each
iteration.
d. The procedure starts with no predictor variables and add one predictor at
each iteration.
ANS: D PTS: 1 OBJ: Section 17.7

27. In backward selection stepwise regression with ten predictor variables,

which of the following statements is correct?
a. The procedure starts with 10 predictor variables and eliminate one predictor
at each iteration.
b. The procedure starts with 2 predictor variables and add one predictor at each
iteration.
c. The procedure starts with 1 predictor variables and add one predictor at each
iteration.
d. The procedure starts with no predictor variables and add one predictor at
each iteration.
ANS: A PTS: 1 OBJ: Section 17.7

28. Which of the following statements are important steps in selecting a model?
a. Specify the dependent variable and determine the goal for the analysis.
b. Specify possible predictor variables and collect the data.
c. Specify the candidate models, and for each candidate model decide which of
the available predictor variables will be included in the model.
d. Select a model, evaluate its suitability and test its reliability.
e. All of these.
ANS: E PTS: 1 OBJ: Section 17.8

NUMERIC RESPONSE

1. Suppose that the sample regression equation of a second-order model is

given by: = 2.50 + 0.15x + 0.45×2 What is the predicted value of y when x = 2?

ANS: 4.60

PTS: 1 OBJ: Section 17.2

2. The estimated regression equation for a sample of 500 college professors is

given by: = 275 – 3x – 2D, where y is retirement age, x is pre-retirement annual
income (in $1000s), and D is a dummy variable that takes the value of 0 for
female professors and 1 for male professors. Assume that there is a relationship
between y, x and D. What is the average age of retirement for male professors
with pre-retirement income of $68,500?

____________________ years

ANS: 67.5

PTS: 1 OBJ: Section 17.4

3. The estimated regression equation for a sample of 500 college professors is

given by: = 275 – 3x – 2D, where y is retirement age, x is pre-retirement annual
income (in $1000s), and D is a dummy variable that takes the value of 0 for
female professors and 1 for male professors. Assume that there is a relationship
between y, x and D. What is the average age of retirement for female professors
with pre-retirement income of $68,500?

____________________ years

ANS: 69.5

PTS: 1 OBJ: Section 17.4

COMPLETION

1. If the goal for the regression analysis is simply to predict the value of the
dependent variable based on a set of predictor variables, we need not worry
about ____________________, which means that some of the predictor variables
might be highly correlated with each other.

ANS: multicollinearity

PTS: 1 OBJ: Section 17.8

2. The ____________________ indicates the proportion of variation in the

dependent variable that is “explained” by the set of predictor variables.

ANS: coefficient of determination

PTS: 1 OBJ: Section 17.8

3. The ____________________ method involves forward selection or reverse

elimination of one predictor variable at a time.

ANS: stepwise regression

PTS: 1 OBJ: Section 17.8

4. For underlying relationships that are not linear, ____________________

transformation methods can be employed in constructing exponential and
multiplicative models.

ANS: logarithmic

PTS: 1 OBJ: Section 17.9

SHORT ANSWER

1. In the general polynomial model, the order of the polynomial is:

will by

ANS:
increase; 8

PTS: 1 OBJ: Section 17.3

5. The regression model = 160 + 8×1 – 5×2 has been fitted to a set of data. If
x2 = 20, what will be the effect on if x1 increases by 1 unit?

will by

ANS:
increase; 8

PTS: 1 OBJ: Section 17.3

6. The regression model = 160 + 8×1 – 5×2 has been fitted to a set of data.
Comment on whether interaction would appear to exist between x1 and x2?

Interaction: ____________________

Comments:

ANS:
Interaction does not appear to exist. There is no interaction between the two
predictor variables since the effect on by a one unit increase in x1 does not
depend on the value of x2.

PTS: 1 OBJ: Section 17.3

both x1 and x2 but believes there is a little or no interaction between the two
predictor variables. Which model would likely be most suitable for this situation?

Comments:

ANS:
Interaction does not appear to exist. Regardless of the value of x2, a 1-unit
increase in x1 will increase by 6 units. In this model, there is no interaction
between x1and x2.

PTS: 1 OBJ: Section 17.3

16. The estimated regression equation for a sample of 500 college professors is
given by: = 275 – 3x – 2D, where y is retirement age, x is pre-retirement annual
income (in $1000s), and D is a dummy variable that takes the value of 0 for
female professors and 1 for male professors. Assume that there is a relationship
between y, x and D. How does the average age at retirement for male
professors change for each additional thousand dollars of pre-retirement
income?

The average age at retirement by years

ANS:
decreases; 3

PTS: 1 OBJ: Section 17.4

17. After data transformation, regression analysis results in the estimation

equation: log = -0.25 + 0.15x. Transform this equation to the equivalent
exponential model of the form = b0b1x. (The base of the logarithm is 10.)

= ____________________

ANS:
0.5623*1.4125x

PTS: 1 OBJ: Section 17.5

18. Regression analysis results in the estimation equation log = 3.0 + 0.50 log
x1 + 0.35 log x2 following data transformation. Transform this equation to the
equivalent exponential model of the form = . (The base of the logarithm is 10.)

= ____________________

ANS:
1000*x10.50*x20.35

PTS: 1 OBJ: Section 17.5

19. Three predictor variables are being considered for use in a linear regression
model. Given the correlation matrix below, does it appear that multicollinearity
could be a problem?

x1 x2 x3
x1 1.000 . .
x2 0.025 1.000 .
x3 0.968 0.897 1.000

Comment:
ANS:
Yes; It appears that multicollinearity could be a problem because x3 is highly
correlated with both x1 and x2.

PTS: 1 OBJ: Section 17.6

20. The two largest values in a correlation matrix are the 0.89 correlation
between y and x3 and the 0.83 correlation between y and x7. During a stepwise
regression analysis is the first independent variable brought into the equation.
Will x7 necessarily be next? If not, why not?

ANS:
Predictor variable x7 will not necessarily be the next variable brought into the
equation. We do not know about the correlation between x3 and x7, so we
cannot determine whether x7 will explain the greatest amount of the remaining
variation in y.

PTS: 1 OBJ: Section 17.7

ESSAY

1. A scatter diagram for a set of data shows that as x increases, y initially

increases, then it decreases, and then it increases again. What does the scatter
diagram indicate?

ANS:
The scatter diagram indicates that a linear model is not a very good fit to the
data.

PTS: 1 OBJ: Section 17.1

2. Write a formula for the fourth-order polynomial model. Would such a

polynomial model tend to be practical for use with business data?

ANS:
. Due to its complexity, this model would not be very practical for use with most
business data.

12. Briefly discuss the best subset regression approach.

ANS:
In the best subset regression approach, sophisticated statistical software
consider all of the possible combinations or subsets of the available predictor
variables, then report which models are the best performers for each given
number of predictors. Implicit in this process is the criterion by which one model
is judged to perform better than another (e.g., coefficient of determination R2).

PTS: 1 OBJ: Section 17.8

13. How do we identify multicollinearity?

ANS:
One way to identify multicollinearity is to use a computer to generate a
correlation matrix that shows the correlation of each independent variable with
each of the other independent variables.

PTS: 1 OBJ: Section 17.9

14. What is stepwise regression?

ANS:
Stepwise regression is a multiple regression estimation technique whereby the
independent variables are added to the regression equation one at a time. The
first x variable to enter is the one that explains the greatest amount of variation
in y. The second x variable to enter will be the one that explains the greatest
amount of the remaining variation in y, and so on.

PTS: 1 OBJ: Section 17.9

15. When is it desirable to make use of stepwise regression technique?

ANS:
The use of stepwise regression can reduce the possibility of multicollinearity
since it is unlikely that two highly correlated x variables will be included in a
multiple regression that is estimated using the stepwise technique. This
technique is especially useful when there are a great many independent
variables.

PTS: 1 OBJ: Section 17.9

16. What is the general idea of stepwise regression?

ANS:
The general idea of stepwise regression is the balancing act of trying to (a)
explain the most possible variation in the dependent variable y, while (b) using
the fewest possible number of the independent variables x.

PTS: 1 OBJ: Section 17.9

Chapter 18. Models for Time

Series and Forecasting
Test Bank

TRUE/FALSE

1. True or False
A time series may consist of weekly production output, monthly sales, annual
rainfall, or any other variable for which the value is observed or repeated at
regular intervals.

ANS: T PTS: 1 OBJ: Section 18.1

2. True or False
By analyzing a time series, we can identify patterns and tendencies that help
explain variation in past sales, shipments, rainfall, or any other variable of
interest.

ANS: T PTS: 1 OBJ: Section 18.1

3. True or False
A trend component in a time series model must be expressed as a linear
relationship over time using a linear trend equation.

ANS: F PTS: 1 OBJ: Section 18.2

4. True or False
Analysis of a time series involves identifying the components that have led to
the fluctuations in the data.

ANS: T PTS: 1 OBJ: Section 18.2

5. True or False
In general, the most important component of most time series is the irregular,
which can be examined by using regression techniques.

ANS: F PTS: 1 OBJ: Section 18.2

6. True or False
The Consumer Price Index (CPI) describes the change in prices from one time
period to another for a fixed “market basket” of goods and services.

ANS: T PTS: 1 OBJ: Section 18.8

7. True or False
The trend component of a time series can be examined (1) by using regression
techniques to fit a trend line to the data, or (2) by using smoothing techniques
to moderate the peaks and valleys within the series.

ANS: T PTS: 1 OBJ: Section 18.2

8. True or False
The smoothing techniques, such as moving average or exponential smoothing,
function much like the shock absorbers of an automobile; damping the sudden
upward and downward “jolts” that occur over the series.

ANS: T PTS: 1 OBJ: Section 18.3

9. True or False
If you are not using a computer, it is desirable to select an even number of
periods for a centered moving average unless there is some compelling reason
to do otherwise.

ANS: F PTS: 1 OBJ: Section 18.3

10. True or False
In general, a moving average with a base equal to the duration of a strong
cyclical or seasonal pattern will be highly useful in dampening fluctuations
caused by the pattern.

ANS: T PTS: 1 OBJ: Section 18.3

11. True or False

The larger the smoothing constant ( ), the more importance is given to the
actual y value for the most recent time period.

ANS: T PTS: 1 OBJ: Section 18.3

12. True or False

The Mean Absolute Deviation criterion is analogous to the least squares criterion
used in determining the regression equation.

ANS: F PTS: 1 OBJ: Section 18.6

13. True or False

The seasonal index is a factor that inflates or deflates a trend value to
compensate for the effect of a pattern that repeats over a period of one year or
less.

ANS: T PTS: 1 OBJ: Section 18.4

14. True or False

In de-seasonalizing a time series, we remove the seasonal influences and
generate a time series that is said to be seasonally adjusted.

ANS: T PTS: 1 OBJ: Section 18.4

15. True or False

Compared to the Mean Squared Error approach, the Mean Absolute Deviation
places a greater penalty on estimates for which there is a large error.

ANS: F PTS: 1 OBJ: Section 18.6

16. True or False
Exponential smoothing requires that we assume an initial forecast value in order
to get things started.

ANS: T PTS: 1 OBJ: Section 18.5

17. True or False

When exponential smoothing is used for forecasting, the forecast will tend to be
too high for time series that are increasing (positive trend) and too low for time
series that are decreasing (negative trend).

ANS: F PTS: 1 OBJ: Section 18.5

18. True or False

A common method of testing for autocollinearity (serial correlation) is a Durbin-
Watson test.

ANS: T PTS: 1 OBJ: Section 18.7

19. True or False

Second-order autocorrelation is the correlation between et and et-2.

ANS: T PTS: 1 OBJ: Section 18.7

20. True or False

A common method of testing for autocollinearity (serial correlation) is a
Wilcoxon matched pairs signed rank test.

ANS: F PTS: 1 OBJ: Section 18.7

21. True or False

A common method of testing for autocollinearity (serial correlation) is a
Wilcoxon signed rank test for one sample.

ANS: F PTS: 1 OBJ: Section 18.7

22. True or False

All index numbers are unit-less.

ANS: T PTS: 1 OBJ: Section 18.8

23. True or False
The analysis of time series data is useful in identifying past patterns and
tendencies as well as helping to forecast future values.

ANS: T PTS: 1 OBJ: Section 18.9

24. True or False

The Durbin-Watson test can be used to determine whether the residuals in a
regression model are independent.

ANS: F PTS: 1 OBJ: Section 18.9

25. True or False

In autoregressive forecasting, each independent variable represents the value of
the dependent variable for a previous time period.

ANS: T PTS: 1 OBJ: Section 18.9

MULTIPLE CHOICE

1. Which of the following components of a time series measures the overall

general directional movement over a long period of time?
a. irregular
b. cycle
c. seasonal
d. trend
e. exponential
ANS: D PTS: 1 OBJ: Section 18.2

2. The classical time series model combines the various components in which of
the following ways?
a.
b.
c.
d.
e. None of these.
ANS: A PTS: 1 OBJ: Section 18.2
3. In general, the most important component of most time series is the
a. trend.
b. cyclical.
c. seasonal.
d. irregular.
ANS: A PTS: 1 OBJ: Section 18.2

4. The upsurge in school supply sales in the fall of each year is an example of
the:
a. irregular component.
b. trend component.
c. seasonal component.
d. cyclical component.
ANS: C PTS: 1 OBJ: Section 18.2

5. The effect that business recessions and prosperity have on time series values
is an example of the:
a. irregular component.
b. trend component.
c. seasonal component.
d. cyclical component.
ANS: D PTS: 1 OBJ: Section 18.2

6. The purpose of the moving average technique is to

a. take away the short-term trend and cyclical variation leaving behind seasonal
and irregular movement.
b. take away the short-term trend and seasonal variation leaving behind cyclical
and irregular movement.
c. take away the short-term trend and irregular variation leaving behind cyclical
and seasonal movement.
d. take away the short-term seasonal and irregular variation leaving behind
trend and cyclical movement.
ANS: D PTS: 1 OBJ: Section 18.3
7. Of the four components of the multiplicative time series model, the ratio-to-
moving average procedure isolates the:
a. irregular component.
b. trend component.
c. seasonal component.
d. cyclical component.
e. All of these.
ANS: C PTS: 1 OBJ: Section 18.4

8. The component of a time series that has repeating patterns that have a
period longer than one year is the:
a. irregular component.
b. trend component.
c. seasonal component.
d. cyclical component.
ANS: D PTS: 1 OBJ: Section 18.2

9. The time series component that reflects a long-term, relatively smooth

pattern or direction exhibited by a time series over a long time period (more
than two years) is called:
a. trend.
b. cyclical.
c. seasonal.
d. random variation.
ANS: A PTS: 1 OBJ: Section 18.2

10. The time series component that reflects variability over short repetitive time
periods and has duration of less than one year is called:
a. trend.
b. cyclical.
c. seasonal.
d. random variation.
ANS: C PTS: 1 OBJ: Section 18.2
11. The time series component that reflects the irregular changes in a time
series that are not caused by any other component, and tends to hide the
existence of the other more predictable components, is called:
a. trend.
b. cyclical.
c. seasonal.
d. random variation.
ANS: D PTS: 1 OBJ: Section 18.2

12. The time series component that reflects a wavelike pattern describing a
long-term trend that is generally apparent over a number of years is called:
a. trend.
b. cyclical.
c. seasonal.
d. random variation.
ANS: B PTS: 1 OBJ: Section 18.2

13. Which of the four time series components is more likely to exhibit the steady
growth of the population of the United States from 1950 to 2000?
a. Trend
b. Cyclical
c. Seasonal
d. Random variation
ANS: A PTS: 1 OBJ: Section 18.2

14. Selecting a large the number of periods (N) for a centered moving average
a. results in greater dampening.
b. is less responsive to directional changes.
c. results in a more accurate forecast.
d. both A and B.
e. All of the above.
ANS: D PTS: 1 OBJ: Section 18.3

15. Different values of the smoothing constant employed in exponential

smoothing cause the smoothing procedure to react more or less rapidly to
changes in the value of a series. Which of the following smoothing constants
causes the least rapid reaction to a change in the current value of a series?
a. 0.30
b. 0.25
c. 0.15
d. 0.10
e. 0.40
ANS: D PTS: 1 OBJ: Section 18.3

16. We calculate the three-period moving average for a time series for all time
periods except the:
a. first period.
b. last period.
c. first and last period.
d. first and last two periods.
ANS: C PTS: 1 OBJ: Section 18.3

17. Selecting a large value for the smoothing constant ( ) in exponential

smoothing
a. results in more importance being placed on the exponentially smoothed value
from the previous period.
b. results in more importance being placed on the actual y value for the current
time period.
c. more strongly dampens the fluctuations in the original series.
d. results in a less accurate forecast.
ANS: B PTS: 1 OBJ: Section 18.3

18. Selecting a small value for the smoothing constant ( ) in exponential

smoothing results in
a. more importance being placed on the exponentially smoothed value from the
previous period.
b. more importance being placed on the actual y value for the current time
period.
c. a more accurate forecast.
d. a less accurate forecast.
ANS: A PTS: 1 OBJ: Section 18.3

19. A factor that inflates or deflates a trend value to compensate for the effect
of a pattern that repeats over a period of one year or less is known as a
a. smoothing factor.
b. dampening factor.
c. seasonal index.
d. residual factor.
ANS: C PTS: 1 OBJ: Section 18.4

20. An auto parts supplier forecasted 1998 annual sales of $800,000. Seasonal
indexes of sales for each quarter of the year were: I – 80, II – 112, III – 117, IV –
91. The sales forecast for quarter II was:
a. 300,000.
b. 200,000.
c. 224,000.
d. 228,000.
e. 284,000.
ANS: C PTS: 1 OBJ: Section 18.4

21. Which of the following equations de-seasonalize a time series?

a.
b.
c.
d.
ANS: C PTS: 1 OBJ: Section 18.4

22. Which of the following will not be present in a de-seasonalized time series?
a. Trend effects
b. Cyclical effects
c. Seasonal effects
d. Random variation
ANS: C PTS: 1 OBJ: Section 18.4
23. In determining weekly seasonal indexes for gas consumption, the sum of the
52 means for gas consumption as a percentage of the moving average is 5050.
To get the seasonal indexes, each weekly mean is to be multiplied by:
a. 5200/5050.
b. (5200 + 5050)/52.
c. (5050 + 52)/5200.
d. 5050/5200.
ANS: A PTS: 1 OBJ: Section 18.4

24. In determining monthly seasonal indexes for gas consumption, the sum of
the 12 means for gas consumption as a percentage of the moving average is
1150. To get the seasonal indexes, each of the 12 monthly means is to be
multiplied by:
a. 1150/1200.
b. (1200 + 1150)/12.
c. (1150 + 12)/1200.
d. 1200/1150.
ANS: D PTS: 1 OBJ: Section 18.4

25. The results of a quadratic model fit to time series data were = 7.5 – 0.25t +
3.5t2, where t = 1 for 1995. The forecasted value for 2002 is:
a. -2.0.
b. 10.75.
c. 28.
d. 229.5.
ANS: D PTS: 1 OBJ: Section 18.5

26. The trend equation for quarter sales data (in millions of dollars) for 1996-
2000 is = 6.8 + 1.2t, where t = 1 for the first quarter of 1996. If the seasonal
index for the third quarter of 2001 is 1.25, then the forecasted sales for the third
quarter of 2001 is:
a. 34.4.
b. 27.52.
c. 43.00.
d. 35.65.
ANS: C PTS: 1 OBJ: Section 18.5

27. Five trend models applied to the same time series data are compared and
the MAD are given below. The model which is the best fit for the data is the one
whose MAD is:
a. 35.
b. 9.
c. 15.
d. 118.
e. 40.
ANS: B PTS: 1 OBJ: Section 18.6

28. The mean absolute deviation averages the absolute differences between the
actual values of the time series at time t and the forecast values at time:
a. t + 1.
b. t.
c. t – 1.
d. t – 2.
ANS: B PTS: 1 OBJ: Section 18.6

29. Which method would you recommend to your statistics professor in selecting
the appropriate forecasting model if avoiding large errors is extremely important
to him or her?
a. Mean absolute deviation (MAD)
b. Mean square error (MSE)
c. Either A or B
d. Neither A nor B
ANS: B PTS: 1 OBJ: Section 18.6

30. One of the assumptions required by the regression model is that the
residuals (errors) be independent of each other. When this assumption is not
met:
a. multicollinearity exists.
b. heteroscedasticity exists.
c. homoscedasticity exists.
d. serial correlation exists.
e. a normal distribution exists.
ANS: D PTS: 1 OBJ: Section 18.7

31. Which of the following statements is not true?

a. In forecasting based on time series information, data from the past are used
in predicting the future value of the variable of interest.
b. Extrapolation of a trend equation fitted to time series is one approach to time
series forecasting.
c. Exponential smoothing is one approach to time series forecasting.
d. All of these statements are true.
e. All of these statements are not true.
ANS: D PTS: 1 OBJ: Section 18.9

32. Which of the following statements is not true regarding the Consumer Price
Index (CPI)?
a. The CPI describes the change in prices from one period to the next for a fixed
“market basket” of goods and services.
b. The CPI is used as a measurement of inflation.
c. The CPI is used as a “cost of living” adjustment in labor contracts.
d. The CPI is used as a means of deflating current prices or wages to “real”
prices wages.
e. All of these statements are true.
ANS: E PTS: 1 OBJ: Section 18.9

NUMERIC RESPONSE

NARRBEGIN: Cell Phones

The number of peak cell-phones minutes used each month by a particular
person is shown in the table below:

Month Minutes
1 74
2 86
3 70
4 96
5 111
6 102
7 115
8 126

NARREND
1. What is the linear trend estimate for Month 7?

ANS: 115.95

PTS: 1 OBJ: Section 18.2

NARRBEGIN: Susan Young

Susan Young is a college student who has just completed her junior year. The
table below summarizes her Grade Point Average (GPA) for each of the last nine
semesters.

Year Semester GPA

Freshman Fall 2.5
Winter 2.8
Spring 2.6
Sophomore Fall 2.4
Winter 3.1
Spring 2.8
Junior Fall 2.6
Winter 3.5
Spring 3.1

NARREND
2. What is the linear trend estimate for Susan’s GPA for Spring semester
Sophomore year?

ANS: 2.906

PTS: 1 OBJ: Section 18.2

3. The trend equation = 1300 + 25x has been fitted to a time series for auto
industry worker days lost due to job-related injuries. If x = 1 for 1999, estimate
the number of worker days lost during 2010.

ANS: 1600

PTS: 1 OBJ: Section 18.2

4. The following trend line was calculated from quarterly data for 1995 – 1999:
where t is 1 for the first quarter of 1995. Calculate the trend value for the
second quarter of the year 2000.

ANS: 0.81

PTS: 1 OBJ: Section 18.2

NARRBEGIN: Stock exchange

Membership on a stock exchange for five years is given below:
NARREND
5. Use the exponential smoothing procedure to obtain estimates of the trend
(this is not the logarithm approach here). Set the smoothed value for 1996 equal
to the actual and use a smoothing constant, = 0.4. Compute the forecasted
value for 2000.

ANS: 510.896

PTS: 1 OBJ: Section 18.3

6. Use the exponential smoothing procedure to obtain estimates of the trend.

Set the smoothed value for 1996 equal to the actual and use a smoothing
constant, = 0.2. Compute the forecasted value for 2000.

ANS: 513.536

PTS: 1 OBJ: Section 18.3

NARRBEGIN: Time periods

The following are the values of a time series for the first four time periods:
NARREND
7. Using a four-period moving average, what is the forecasted value for time
period 5?

ANS: 25

PTS: 1 OBJ: Section 18.3

8. Using exponential smoothing, with = 0.30, what is the forecasted value for
time period 5?

ANS: 24.644

PTS: 1 OBJ: Section 18.3

9. Suppose that we calculate the four-period moving average of the following

time series

What is the centered moving average for period 3?

ANS: 21.25

PTS: 1 OBJ: Section 18.3

10. The seasonal indexes for a convention center’s bookings are 85, 128, 104,
and 83 for quarters 1 through 4, respectively. What percentage of the center’s
annual bookings tend to occur during the second quarter?

ANS: 32%

PTS: 1 OBJ: Section 18.4

NARRBEGIN: Inventory
The following values are the means for each month of the inventory as a
percentage of the moving average for the twelve months of the year.
NARREND
11. Compute the de-seasonalized value for February if the inventory in February
is $48,000.

ANS: $55581

PTS: 1 OBJ: Section 18.4

12. Compute the seasonal index for February.

ANS: 86.36

PTS: 1 OBJ: Section 18.4

13. The trend equation for annual sales is = 32 + 3.1x where x = 0 in 1992.
Sales (y) are in millions of dollars. The monthly seasonal index for July is 98.
What is the July sales estimate for 2000?

PTS: 1 OBJ: Section 18.4

17. The linear trend equation = 100 + 5.2x has been developed, where =
estimated sales (thousands of dollars) and x = 1 for the year 1995. What level of
sales would be forecast for 2012?

NARRBEGIN: Table
NARREND
22. What is the computed value of the Durbin-Watson statistic?

ANS: 1.19

PTS: 1 OBJ: Section 18.7

23. Daily sales volume from the Avalon Convenience Store is shown in the table
below.

Day Sales ($)

1 512
2 328
3 538
4 662
5 498
6 546
7 579
8 595
9 616
10 655

What is the linear trend estimate for Day 4?

ANS: $522.12

PTS: 1 OBJ: Section 18.2

COMPLETION
1. In forecasting, we use data from the ____________________ in predicting the
____________________ value of the variable of interest, such as automobile sales.

ANS: past; future

PTS: 1 OBJ: Section 18.5

2. In the MAD criterion, “MAD” stands for ____________________.

ANS: mean absolute deviation

PTS: 1 OBJ: Section 18.6

3. In the MSE criterion, “MSE” stands for ____________________.

ANS: mean squared error

PTS: 1 OBJ: Section 18.6

4. Fill in the blank Interpreting the Durbin-Watson test statistic (d), weak or
nonexistent autocorrelation is indicated by a value near ____________________.

ANS:
2
two

PTS: 1 OBJ: Section 18.7

5. ____________________ are measures intended to reflect the extent to which

various parts of the year experience higher or lower levels of production,
demand, or other kinds of economic activity.

ANS: Seasonal indexes

PTS: 1 OBJ: Section 18.8

6. In 2000 a company’s inventory costs were $4 million. Then the index number
for the 2000 base period is ____________________.

ANS: 100

PTS: 1 OBJ: Section 18.8

7. A time series can be deseasonalized by using the ____________________ for the
respective months or quarters of the year.

ANS: seasonal indexes

PTS: 1 OBJ: Section 18.9

8. When values in a time series are highly correlated with each other,
____________________ forecasting models can be useful.

ANS: autoregressive

PTS: 1 OBJ: Section 18.9

9. When data are a sequence of observations over regular intervals of time, they
are referred to as a ____________________.

ANS: time series

PTS: 1 OBJ: Section 18.1

ANS:

PTS: 1 OBJ: Section 18.3

11. What can you conclude from your time-series smoothing?

ANS:
There appears to be a gradual trend of increasing sales.

PTS: 1 OBJ: Section 18.3

12. Gashol (a mixture of gasoline and methyl alcohol) sales in Iowa City have
been recorded over the past 10 months as shown below:

Month Jan Feb Mar Apr May June July Aug Sep Oct
Sales 75 72 81 92 90 105 112 107 110 93

16. In determining weekly seasonal indexes for electrical consumption, the sum
of the 52 means for electrical consumption as a percentage of the moving
average is 5193. To get the seasonal indexes, each monthly mean is to be
multiplied by ____________________________________.

ANS:
5200/5193

PTS: 1 OBJ: Section 18.4

17. In determining seasonal indexes for the months of the year, a statistician
finds the total of the “unadjusted” seasonal indexes is 1150 instead of 1200.
What correction must be made to arrive at the adjusted seasonal indexes?

ANS:
The statistician must multiply each seasonal index by the adjustment factor
1200/1150

PTS: 1 OBJ: Section 18.4

18. The means of the quarterly cost as a percentage of moving average are
151.5, 77.5, 67.3, and 110.6. Prepare the seasonal index for each quarter.

ANS:

Quarter Mean Seasonal Index

1 151.5 148.931
2 77.5 76.186
3 67.3 66.159
4 110.6 108.725
Total 406.9 400
PTS: 1 OBJ: Section 18.4

NARRBEGIN: Overtime
The quarterly overtime hours (in 1000s) recorded in a large steel mill are shown
below.

Using the regression technique, the linear trend line = 21.675 + .854t was
computed.
NARREND
19. Calculate the seasonal indexes based on the regression trend line.
ANS:
Using Excel to calculate for each value of t and compute the ratio of y/ . The
ratios associated with each quarter, the averages, and the seasonal indexes are
shown below.

Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

1995 1.4204 .6415 .8664 1.1159
1996 1.3490 .5970 .9764 1.0173
1997 1.2261 .6950 .8047 1.1590
1998 1.2509 .8623 .8989 1.1319
Average 1.3116 .6990 .8866 1.1060 4.0032
Seasonal Index 1.3106 .6984 .8859 1.1051 4.0000
PTS: 1 OBJ: Section 18.4

20. What do the seasonal indexes tell us?

ANS:
The seasonal indexes tell us that, on average, the total overtime hours are
below the annual average in the second and third quarters, and above the
average in the first and fourth quarter. That is, we expect the total number of
overtime hours for the second and third quarters to be 30.16 % and 11.41%,
respectively, below the annual average. The total overtime hours for the first
and fourth quarters are expected to be 31.06% and 10.51%, respectively, above
the average.

PTS: 1 OBJ: Section 18.4

21. The following seasonal indexes and linear trend were computed from five
year quarterly sales data.

Trend line is

Quarter Seasonal Index

1 1.4
2 1.2
3 0.9
4 0.5
Forecast the sales for the next four quarters

ANS:

Quarter t Trend value Seasonal Index Forecast

5 21 1130 1.4 1582
6 22 1160 1.2 1392
7 23 1190 0.9 1071
8 24 1220 0.5 610
PTS: 1 OBJ: Section 18.5

22. The regression output produced by MINITAB for times series set of data is
shown below:

Test for positive autocorrelation using a 0.05 significance level.

Test statistic = ____________________

Critical Value = ____________________

Conclusion: ____________________

Interpretation: __________________________________________________

ANS:
1.94; 1.37; Do not reject H0; There is NO evidence of positive autocorrelation

PTS: 1 OBJ: Section 18.7

NARRBEGIN: Table
NARREND
23. At the 0.01 significance level with n = 15, k = 2, test the hypothesis that
there is positive autocorrelation present. What is the appropriate conclusion?

ANS:
The test is inconclusive.

PTS: 1 OBJ: Section 18.7

24. If a company’s inventory costs were $3.5 million in 1995 (base period) and
$5.95 million in 2002, what is the index number for 2002?
What does it mean?

ANS:
170; This means that if inventory costs in 1995 are defined as 100, 2002 costs
can be expressed as 170 or 70% higher.

PTS: 1 OBJ: Section 18.8

25. In the classical time series model, the time series is made up of (T), (C), (S),
and (I) components What do these initials indicate?

ANS:
trend; cyclical; seasonal; irregular

PTS: 1 OBJ: Section 18.9

ESSAY

1. Why do we examine time series?

ANS:
Time series are examined for two reasons: (a) to understand the past and (b) to
predict the future.

PTS: 1 OBJ: Section 18.1

2. Distinguish between the four components of a time series. Define each

component.

ANS:
Trend. (T); an overall upward or downward tendency.
Cyclical. (C); fluctuations that repeat over time, with a period being more than a
year from one peak to the next.
Seasonal. (S); Periodic fluctuations that repeat over a period of one year or less
Irregular. (I); Random or “noise” fluctuations that are the result of chance
events.

PTS: 1 OBJ: Section 18.2

3. What is the purpose of using the moving average?

ANS:
The purpose of using the moving average is to take away the short-term
seasonal and irregular variation, leaving behind a combined trend and cyclical
movement.

PTS: 1 OBJ: Section 18.3

4. Identify the following equation: .

ANS:
Exponential smoothing of a time series

PTS: 1 OBJ: Section 18.3

5. When exponential smoothing is used in fitting a curve to a time series, the

approach is slightly different from its application to forecasting. Compare the
appropriate formulas and point out how they differ.

ANS:
When exponential smoothing is used to smooth a time series, the formula for
the current period includes the exponentially-smoothed value for the previous
period and the actual value for the current period. However, when exponential
smoothing is used to forecast, the formula for the next period includes the
forecasted value for the current period and the actual data for the current
period. Thus, in smoothing, the smoothed data is the combination of the
smoothed data for previous periods and actual data for current periods. In
forecasting, the forecast for the next period is the combination of the forecast
and the actual data for the current period.

PTS: 1 OBJ: Section 18.5

6. How do the MAD and MSE criteria differ in their approach to evaluating the fit
of an estimation equation to a time series?

ANS:
MAD considers the mean absolute error from the actual data; the direction of the
error is not considered. In calculating MAD, the absolute values of the deviations
are used. MSE considers the mean squared error from the actual data. In
calculating MSE, the squared deviations from the actual data are used. The MSE
approach penalizes large errors more since the errors are squared.

PTS: 1 OBJ: Section 18.6

7. According to the chapter, regression models based on time series data are
especially susceptible to autocorrelation. Why?

ANS:
a) Key independent (x) variables that have not been included in the model are
likely to be related to time. b) Omission of one or more of these independent
variables will tend to yield residuals (errors) that are also related to time.

PTS: 1 OBJ: Section 18.7

8. What is the Durbin-Watson test for autocorrelation, and how can it be useful in
evaluating the relevance of a given regression model that has been fitted to a
set of time series data?

ANS:
The Durbin-Watson test is used to detect the presence of autocorrelation
between adjacent residuals. If the test detects the presence of autocorrelation,
there is the possibility in the given model that important variables may have
been omitted. The inclusion of these variables can reduce the presence of
autocorrelation and enhance the quality of confidence and prediction intervals.

PTS: 1 OBJ: Section 18.7

9. When autocorrelation of the residuals is present, what effect can this have on
interval estimation and significance tests regarding the regression model
involved?

ANS:
When autocorrelation of the residuals is present, the interval estimations will
tend to be too narrow, and the respective independent variables will be
exaggerated in their significance.

TRUE/FALSE

1. True or False
In hypothesis testing, uncertainty is reflected in Type I but not Type II error.

ANS: F PTS: 1 OBJ: Section 19.1

2. True or False
Decisions can never be made without the benefit of knowledge gained from
sampling.

ANS: F PTS: 1 OBJ: Section 19.1

3. True or False
A decision situation can be expressed as either a payoff table or a decision tree
diagram.

ANS: T PTS: 1 OBJ: Section 19.1

4. True or False
Incremental analysis is a technique especially useful for inventory decisions.

ANS: T PTS: 1 OBJ: Section 19.1

5. True or False
In non-Bayesian decision making, the decision rule considers the respective
probability of the states of nature.

ANS: F PTS: 1 OBJ: Section 19.3

6. True or False
The maximum criterion specifies that we select the decision alternative having
the lowest maximum payoff.

ANS: F PTS: 1 OBJ: Section 19.3

7. True or False
The maximax criterion specifies that we select the decision alternative having
the highest maximum payoff.

ANS: T PTS: 1 OBJ: Section 19.3

8. True or False
In using the minimax regret criterion, we must first construct a regret table.

ANS: T PTS: 1 OBJ: Section 19.3

9. True or False
Regrets refer to the differences between each payoff and the worst possible
payoff if that state of nature were to occur.

ANS: F PTS: 1 OBJ: Section 19.3

10. True or False

The minimax regret criterion specifies selection of the alternative with the
lowest maximum regret.

ANS: T PTS: 1 OBJ: Section 19.3

11. True or False

Bayesian decision making takes into account the probabilities for the respective
states of nature.

ANS: T PTS: 1 OBJ: Section 19.4

12. True or False

The profit if one more unit is stocked and sold is known as marginal profit.

ANS: T PTS: 1 OBJ: Section 19.6

13. True or False
The expected opportunity loss for the alternative having the maximum expected
payoff is the expected value of perfect information.

ANS: T PTS: 1 OBJ: Section 19.5

MULTIPLE CHOICE

1. The level of doubt regarding the decision situation where both the possible
states of nature and their exact probabilities of occurrence are known is which of
the following?
a. risk
b. uncertainty.
c. ignorance
d. expected payoff
e. state of nature
ANS: A PTS: 1 OBJ: Section 19.2

2. Which of the following would not be considered a state of nature for a

business firm?
a. Federal Reserve regulations.
b. Food and Drug Administration regulations.
c. The number of employees to hire.
d. Minimum wage regulations.
e. What other firms charge for price.
ANS: C PTS: 1 OBJ: Section 19.2

3. Which of the following would be considered a state of nature for a business

firm?
a. Incentive programs for sales staff
b. Inventory levels
c. Salaries for employees
d. Site for new plant
e. Worker safety laws
ANS: E PTS: 1 OBJ: Section 19.2
4. A person builds a storm cellar in a region struck consistently with tornadoes.
Which of the following decision making criteria does this typify?
a. Maximum
b. Maximax
c. Maximum regret
d. Minimax
e. Maximum opportunity loss
ANS: A PTS: 1 OBJ: Section 19.3

5. A person bets his remaining savings on a horse race based on the large payoff
if his horse wins. Which of the following decision making criteria does this typify?
a. Maximum
b. Maximax
c. Minimax
d. Minimax regret
e. Maximum expected payoff
ANS: B PTS: 1 OBJ: Section 19.3

6. A homeowner takes out an insurance policy to try to insure against every

contingency to avoid catastrophic losses. Which of the following decision making
criteria does this typify?
a. Maximum
b. Maximax
c. Minimax
d. Minimax regret
e. Maximum expected payoff
ANS: D PTS: 1 OBJ: Section 19.3

7. Which of the following represents behavior of risk avoidance?

a. Bungee jumping.
b. Buying lottery tickets.
c. Entering magazine sweepstakes.
d. Buying a car with an air bag for both front seat occupants.
e. Skydiving.
ANS: D PTS: 1 OBJ: Section 19.5
8. The expected value of perfect information is the same as:
a. maximin payoff.
b. maximax payoff.
c. the expected opportunity loss for the best alternative.
d. the expected payoff.
e. the expected payoff with perfect information.
ANS: C PTS: 1 OBJ: Section 19.5

NUMERIC RESPONSE

NARRBEGIN: Economy
An investor has constructed the following payoff table for his profit in thousands
of dollars.
NARREND
1. What is the most the investor should be willing to pay for perfect information
about the future state of the economy?

____________________ thousand

ANS: 12.8

PTS: 1 OBJ: Section 19.5

2. A fruit stand manager must decide how many pounds of bananas to stock
weekly. From past records it appears that the demand for bananas is
approximately normal with a mean of 1,200 pounds and a standard deviation of
400 pounds. The cost of the bananas is $0.15 per pound and the usual selling
price is $0.45 per pound. At the end of each week a hog farmer comes by the
fruit stand and purchases any unsold, over-ripened bananas for $0.05 per
pound. Calculate the amount of bananas the manager needs to purchase each
week to maximize his profit.

____________________ pounds

ANS: 1468

PTS: 1 OBJ: Section 19.6

3. A silk screen T-shirt Company buys T-shirts and places designs on them. The
cost of the T-shirt is $2.00. Placing the designs on shirts costs $3.00. The shirts
sell for $12. Unsold shirts are donated to charity. The monthly demand for T-
shirts with designs runs at a mean of 400 and a standard deviation of 50 T-shirts
and is approximately normally distributed. What is the profit maximizing number
of T-shirts to purchase each month?

____________________ T-shirts

ANS: 411

PTS: 1 OBJ: Section 19.6

4. A civic organization cooks and serves pancakes once a year as a fundraiser

and has done so for the past 25 years. The pancake grill size requires pancakes
to be cooked in advance of the orders for them. All labor is donated, but the
electricity and pancake supplies cost $0.20 per pancake. Each pancake sells for
$0.60. From past records it appears that the distribution of pancake sales is
approximately normal with a mean of 3000 and a standard deviation of 450.
Cooked, but unsold pancakes are given to anyone who wishes to take them. Find
the number of cooked pancakes that will yield the maximum profit for the
project.

____________________ pancakes

Remove all commas from your answer before submitting.

ANS: 3194

PTS: 1 OBJ: Section 19.6

5. The manager of a grocery store pays 60 cents for each rose and sells them for
$1.50 each. Roses left at the end of the day are discarded. The daily demand
can be approximated by a normal distribution having a mean of 250 and a
standard deviation of 40. To maximize his expected profit, how many roses
should the manager buy before the market opens each day?

____________________ roses
ANS: 260

PTS: 1 OBJ: Section 19.6

6. A retailer can purchase units of a perishable item for 75 cents each. The
retailer sells the item for $2.00. Unsold items are worthless and will be
discarded. If demand for the item can be approximated by a normal distribution
having a mean of 150 and a standard deviation of 30, how many units should
the retailer stock to maximize expected profit?

____________________ items

ANS: 160

PTS: 1 OBJ: Section 19.6

NARRBEGIN: Market Condition

Three different designs are being considered for a new refrigerator, and profits
will depend on the combination of the refrigerator design and market condition.
The following payoff table summarizes the decision situation, with amounts in
millions of dollars.
NARREND
7. Assume that the probabilities for the three market conditions are estimated as
0.1, 0.6, and 0.3, respectively. Determine the expected payoff value that would
be realized if perfect information were available.

____________________ million

ANS: $26.1

PTS: 1 OBJ: Section 19.7

8. What is the most the firm would be willing to pay for a research study
designed to reduce its uncertainty about market conditions?

____________________ million

ANS: $5.6

PTS: 1 OBJ: Section 19.7

NARRBEGIN: Scenario
A company must decide whether or not to change its packaging now to a more
environmentally safe material. The impact of the decision on profits depends on
which future scenario develops. Scenario 1 is that the media does not focus
heavily on concerns about packaging and no new laws requiring changes in
packaging are passed. Under this scenario, the company will make $30 million if
they change their packaging now, but will make $70 million if they do not
change their packaging now. Scenario 2 is that the media does focus heavily on
concerns about packaging and no new laws requiring changes in packaging are
passed. Under this scenario, the company will make $45 million if they change
their packaging now, but will make $50 million if they do not change their
packaging now. Scenario 3 is that the media does focus heavily on concerns
about packaging and new laws requiring changes in packaging are passed.
Under this scenario, the company will make $55 million if they change their
packaging now, but will make only $10 million if they do not change their
packaging now. The probabilities of the three scenarios are 0.3, 0.5, and 0.2,
respectively.
NARREND
9. What is the most the company should be willing to pay for a research study
designed to reduce its uncertainty about media and legal developments
concerning packaging?

____________________ million

ANS: $9

ANS: $46.5

PTS: 1 OBJ: Section 19.7

COMPLETION

1. Another term for regret is ______________________________.

ANS: opportunity loss

PTS: 1 OBJ: Section 19.5

2. Incremental analysis involves the key terms of ______________________________

and ___________________________________.

ANS: marginal profit; marginal loss

PTS: 1 OBJ: Section 19.6

SHORT ANSWER

1. A California mango grower is considering the installation of a heating system

to protect his crop in the event of frost during the coming winter. What would be
the rows and columns of a payoff table applicable to this decision?
Rows:

Columns:

ANS:
The rows of a payoff table depict the alternatives the decision maker has
available. In this case, the mango grower may choose to install the heating
system or not to install the system.; The columns of a payoff table represent the
possible states of nature that might occur; in this case, the winter will be cold
enough to require the system to save the crop or it will be mild enough not to
require the system.

PTS: 1 OBJ: Section 19.2

2. When Jessica takes the direct route to work, she gets there in 25 minutes if no
train is at the railroad crossing. When a train is using the crossing, her travel
time is 10 minutes longer. Her alternative is a route that takes 32 minutes to
travel, but has no traffic signals or other delays. Assuming that shorter transit
times are more desirable, which route will Jessica select if she uses the maximin
criterion? Explain.

ANS:
Alternative route; Assuming that shorter transit times are more desirable,
Jessica’s reason using the maximin criterion will follow these steps: If she takes
the direct route, the greatest time it might take her to get to work is 35 minutes.
If she takes the longer route, the greatest possible time is 32 minutes.
Therefore, using the maximin criterion, Jessica will choose the longer route
because it has the better of the worst possible travel times.

PTS: 1 OBJ: Section 19.3

3. When Jessica takes the direct route to work, she gets there in 25 minutes if no
train is at the railroad crossing. When a train is using the crossing, her travel
time is 10 minutes longer. Her alternative is a route that takes 32 minutes to
travel, but has no traffic signals or other delays. Assuming that shorter transit
times are more desirable, which route will Jessica select if she uses the maximax
criterion? Explain.
ANS:
Direct route; Using the maximax criterion, Jessica will assume that good things
will happen to her. So if she takes the direct route, she will get to work in 25
minutes, and, if she takes the longer route, it will take 32 minutes. Therefore,
Jessica will choose the direct route if she is using the maximax criterion.

PTS: 1 OBJ: Section 19.3

4. When Jessica takes the direct route to work, she gets there in 25 minutes if no
train is at the railroad crossing. When a train is using the crossing, her travel
time is 10 minutes longer. Her alternative is a route that takes 32 minutes to
travel, but has no traffic signals or other delays. Assuming that shorter transit
times are more desirable, which route will Jessica select if she uses the minimax
regret criterion? Explain.

ANS:
Direct route; This criterion minimizes the maximum possible regret. Jessica’s
maximum possible regret if she takes the direct route is 3 minutes; if she takes
the longer route, it is 7 minutes. Therefore, using the minimax regret criterion,
Jessica will take the direct route, since her maximum possible route on that
route is only 3 minutes as compared to 7 minutes on the longer route.

PTS: 1 OBJ: Section 19.3

5. For each of the following, indicate whether the behavior represents the
maximin criterion or the maximax criterion. Explain your reasoning.
A) A truck driver is behind schedule and knows he is approaching an area where
police radar is often encountered, but he continues driving at 20 mph over the
speed limit. Explain:

B) A struggling retailer hires a public relations firm to carry out an intensive

promotional campaign for her store. If the campaign is not extremely successful,
the retailer will not be able to pay the PR firm and will be in danger of defaulting
on next month’s payroll. Explain:

C) The owner of a medical clinic buys liability insurance. Explain:

ANS:
Maximax; Maximax is a very optimistic criterion, and this trucker is exhibiting
optimistic behavior.;
Maximax; The retailer is being very optimistic in assuming that the public
relations firm can turn things around for her store.;
Maximum; The owner of the medical clinic is assuming that bad things might
happen, and he is going to try to make the best of the bad situation.

PTS: 1 OBJ: Section 19.3

NARRBEGIN: Competitor’s Price

ABC Industries is about to launch a new product and must decide to set the
price of the product at either high, medium, or low. The annual payoff for ABC
will depend on the price set on a competing product that will be introduced in
the near future. The table below shows the annual payout for each combination
of prices.

Competitor’s Price
ABC Price High Medium Low
High $60,000 $25,000 -$20,000
Medium $35,000 $46,000 -$4,000
Low $18,000 $12,000 $8,000

NARREND
6. What price should ABC choose using the maximax criterion?

ANS:
PAYOFFS Competitor Price Maximax
Alternatives High Medium Low Max Payoff Choice
High $60,000 $25,000 -$20,000 $60,000 Best
Medium $35,000 $46,000 -$4,000 $46,000
Low $18,000 $12,000 $8,000 $18,000

Set price High.

PTS: 1 OBJ: Section 19.3

7. What price should ABC choose using the maximin criterion?

ANS:
PAYOFFS Competitor Price Maximum
Alternatives High Medium Low Min Payoff Choice
High $60,000 $25,000 -$20,000 -$20,000
Medium $35,000 $46,000 -$ 4,000 -$ 4,000
Low $18,000 $12,000 $ 8,000 $ 8,000 Best

Set price Low.

PTS: 1 OBJ: Section 19.3

8. What price should ABC choose using the minimax regret criterion?

ANS:
Regrets Competitor Price Minimax
Alternatives High Medium Low Max Regret Regret
High $0 $21,000 $28,000 $28,000
Medium $25,000 $0 $12,000 $25,000 Best
Low $42,000 $34,000 $0 $42,000

Set price medium.

PTS: 1 OBJ: Section 19.3

9. If the probability of the competitor setting their price High, Medium, and Low
is 40%, 25%, and 35% respectively, which price provides ABC with the highest
expected payoff?

ANS:
PAYOFFS Competitor Price Expected
Alternatives High Medium Low Payoff Choice
High $60,000 $25,000 -$20,000 $23,250
Medium $35,000 $46,000 -$4,000 $24,100 Best
Low $18,000 $12,000 $8,000 $13,000
Probability 0.40 0.25 0.35

Set price medium.

PTS: 1 OBJ: Section 19.4

10. If the probability of the competitor setting their price High, Medium, and Low
is 40%, 25%, and 35% respectively, what is the expected value of perfect
information?

ANS:
PAYOFFS Competitor Price Expected
Alternatives High Medium Low Payoff Choice
High $60,000 $25,000 -$20,000 $23,250
Medium $35,000 $46,000 -$ 4,000 $24,100 Best
Low $18,000 $12,000 $ 8,000 $13,000
Probability 0.40 0.25 0.35
Best Outcome $60,000 $46,000 $ 8,000

Expected Payoff with Perfect Information $38,300

Expected Payoff with Present Information = $24,100
Expected Value OF Perfect Information (EVPI) = $14,200
PTS: 1 OBJ: Section 19.4

NARRBEGIN: Economy
An investor has constructed the following payoff table for his profit in thousands
of dollars.
NARREND
11. Construct the regret matrix.

ANS:

The state of the economy will be:

Invest in the company Weak
(0.2) Moderate
(0.4) Strong
(0.4)
A $74 $0 $0
B $54 $10 $15
C $0 $2 $30
PTS: 1 OBJ: Section 19.5
12. Determine the expected opportunity loss (EOL) from investing in each
company.

Company A: ____________________ thousand

Company B: ____________________ thousand

Company C: ____________________ thousand

ANS:
$14.8; $20.8; $12.8

PTS: 1 OBJ: Section 19.5

13. Using the opportunity loss approach, which alternative will be selected, and
what is its expected opportunity loss?

EOL is ____________________ thousand

ANS:
Company C; 12.8

PTS: 1 OBJ: Section 19.5

NARRBEGIN: Tee shirts

Tee Shirts Unlimited is providing shirts for an upcoming sports tournament. They
assume demand will be either 2000, 3000, 4000, or 5000 shirts and they need
to decide whether to produce 2000, 3000, 4000, or 5000 shirts. The payoff for
each production/demand combination is shown in the table below.

18. The probabilities for demand levels 2000, 3000, 4000, and 5000 have been
estimated to be 20%, 40%, 15%, and 25% respectively. Which is the expected
value of perfect information?

Expected Payoff with Perfect Information = $17,250

Expected Payoff with Present Information $12,600
Expected Value of Perfect Information (EVPI) = $4,650
PTS: 1 OBJ: Section 19.7
19. With the probabilities for the three market conditions estimated as 0.1, 0.6,
and 0.3, respectively, what is the expected opportunity loss (EOL) associated
with each of the three decision alternatives?

Design A: ____________________ million

Design B: ____________________ million

Design C: ____________________ million

ANS:
$11.4; $7.6; $5.6

PTS: 1 OBJ: Section 19.7

NARRBEGIN: Market Condition

ANS:
Design B

PTS: 1 OBJ: Section 19.7

21. What decision will be made using the maximax criterion?

ANS:
Design C

PTS: 1 OBJ: Section 19.7

22. Convert the payoff table to a regret table

ANS:

Market Condition
Alternative I II III
A 0 2 34
B 10 0 22
C 20 6 0
PTS: 1 OBJ: Section 19.7

23. What decision will be made using the minimax regret criterion?

ANS:
Design C

PTS: 1 OBJ: Section 19.7

24. Assume that the probabilities for the three market conditions are estimated
as 0.1, 0.6, and 0.3, respectively. Which design should be selected in order to
maximize the firm’s expected profit?

29. What decision will be made using the minimax regret criterion?

ANS:
Change packaging

PTS: 1 OBJ: Section 19.7

30. What decision will be made to maximize expected payoff?

ANS:
Don’t change packaging

PTS: 1 OBJ: Section 19.7

31. Which decision has the minimum expected opportunity loss?

ANS:
Don’t change packaging

PTS: 1 OBJ: Section 19.7

NARRBEGIN: Canoe rentals

John’s Canoe Rentals leases canoes each day from a supplier and rents them to
customers who use them to float down the Delaware River. Each day, John can
lease 10, 20, or 30 canoes from his supplier. John assumes daily demand will be
either 10, 20, or 30 canoes. The payoff table for each lease/demand
combination is shown below.

PAYOFFS Demand
Alternatives 10 20 30
10 $140 $140 $140
20 -$20 $280 $280
30 -$180 $120 $420

NARREND
32. How many canoes should be leased using the maximax criterion?

ANS:
PAYOFFS Demand Maximax
Alternatives 10 20 30 Max Payoff Choice
10 $140 $140 $140 $140
20 -$20 $280 $280 $280
30 -$180 $120 $420 $420 Best

Lease 30 canoes.

PTS: 1 OBJ: Section 19.7

33. How many canoes should be leased using the minimax regret criterion?

ANS:
REGRET Demand Minimax
Alternatives 10 20 30 Max Regret Choice
10 $0 $140 $280 $280
20 $160 $0 $140 $160 Best
30 $320 $160 $0 $320

Lease 20 canoes.

PTS: 1 OBJ: Section 19.7

34. How many canoes should be leased using the maximin criterion?
ANS:
PAYOFFS Demand Maximum
Alternatives 10 20 30 Min Payoff Choice
10 $140 $140 $140 $140 Best
20 -$20 $280 $280 -$20
30 -$180 $120 $420 -$180

Lease 10 canoes.

PTS: 1 OBJ: Section 19.7

35. John assumes the probabilities for demand levels of 10, 20, and 30 canoes is
40%, 25%, and 35% respectively. Which leasing alternative will provide the
largest expected payoff?

ANS:
PAYOFFS Demand Expected
Alternatives 10 20 30 Payoff Choice
10 $140 $140 $140 $140
20 -$20 $280 $280 $160 Best
30 -$180 $120 $420 $105
Probability 0.40 0.25 0.35

Lease 20 canoes.

PTS: 1 OBJ: Section 19.7

36. John assumes the probabilities for demand levels of 10, 20, and 30 canoes is
40%, 25%, and 35% respectively. What is the expected value of perfect
information?

ANS:
PAYOFFS Demand Expected
Alternatives 10 20 30 Payoff Choice
10 $140 $140 $140 $140
20 -$20 $280 $280 $160 Best
30 -$180 $120 $420 $105
Probability 0.40 0.25 0.35
Best Outcome $140 $280 $420

Expected Payoff with Perfect Information = $273

Expected Payoff with Present Information = $160
Expected Value OF Perfect Information (EVPI) = $113
PTS: 1 OBJ: Section 19.7

NARRBEGIN: State of Nature

The following table displays the payoffs (in thousands of dollars) for five
different decision alternatives under three possible states of nature:
NARREND
37. Based on the expected opportunity loss criterion, what is the best decision
alternative?

ANS:
Alternative D

PTS: 1 OBJ: Section 19.7

ESSAY

1. Define payoff table.

ANS:
The payoff table is a table in which the rows are decision alternatives, the
columns are states of nature, and the entry at each intersection of a row and
column is a numerical payoff such as a profit or loss. The table may also include
estimated probabilities for the states of nature.

PTS: 1 OBJ: Section 19.2

2. What is meant when we say that the states of nature in the payoff table must
be mutually exclusive and exhaustive?

ANS:
The states of nature must be mutually exclusive (only one of them will occur),
and they must be exhaustive (one of them must occur). For example, the states
of nature for a roll of a single die are the numbers 1, 2, 3, 4, 5, and 6. This list is
mutually exclusive – only one of the states of nature can occur for a single roll of
the die. It is also exhaustive, because it lists all the possible outcomes and one
of the listed outcomes must occur.

PTS: 1 OBJ: Section 19.2

3. The manager of a small local airport must extend a runway if business jets
are to be accommodated. However, the residents living close to the airport are
already complaining to the city council about the volume and noise of existing
air traffic at the facility. Identify the decision alternatives and the possible states
of nature that might occur after the decision is made.

ANS:
The decision alternatives for the airport manager are to extend the runway or
not to extend the runway. The possible states of nature would include increased
complaints from local residents, reduced complaints from local residents, or no
change in complaints from area residents.

PTS: 1 OBJ: Section 19.2

4. What are the differences among risk, uncertainty, and ignorance? Into which
category of decision situation do most business decisions fall?

ANS:
Risk is the condition when all the possible states of nature and their associated
probabilities are known. Uncertainty is the condition when the possible states of
nature are known, but the exact probabilities for the states of nature are not
known. Ignorance is the condition in which neither the possible states of nature
nor any of the associated probabilities are known. Most business decisions are
made under conditions of uncertainty.

PTS: 1 OBJ: Section 19.2

5. A new car salesman is being paid a straight salary, but has the choice to (a)
continue with straight salary, (b) change to straight commission, or (c) change
to a combination that includes a lower base salary and a commission on each
sale of a new car. What states of nature might be useful in constructing a payoff
table for this situation?
ANS:
The salesman should consider the possible levels of sales he might make as his
states of nature. Of course, the various levels of sales would affect his income
under the different types of income plans.

PTS: 1 OBJ: Section 19.2

6. Define expected payoff of a decision alternative.

ANS:
The expected payoff of a decision alternative is the sum of the products of the
payoffs and the state of nature probabilities.

PTS: 1 OBJ: Section 19.4

7. Define the Expected Value of Perfect Information.

ANS:
The Expected Value of Perfect Information (EVPI) is the difference between (1)
the expected payoff if we are guaranteed perfect knowledge about the future
and (2) the expected payoff under uncertainty (present information).

PTS: 1 OBJ: Section 19.4

8. Why should we bother determining the expected value of perfect information

when such information is practically never available?

ANS:
Rarely will we ever obtain perfect information, yet we can usually purchase
“better” information for a price. The expected value of perfect information
(EVPI) tells us the upper limit for what “perfect” information would be worth.
Certainly we would not want to pay more than the EVPI for “imperfect”
information.

PTS: 1 OBJ: Section 19.4

9. What is the most important difference between Bayesian and non-Bayesian

decision criteria?
ANS:
Non-Bayesian decision criteria ignore the probabilities for the respective states
of nature, while Bayesian decision criteria take them into account.

PTS: 1 OBJ: Section 19.4

10. In what way are the minimax regret criterion and the expected opportunity
loss (EOL) criterion similar? In what ways do they differ?

ANS:
Both the minimax regret criterion and the expected opportunity loss (EOL)
criterion call for the construction of a “regret matrix”. That is, they force the
decision maker to consider the possible lost opportunities in choosing one
alternative over another. The two criteria differ in that the minimax regret does
not take into account the probabilities of the various states of nature, and the
EOL criterion does.

PTS: 1 OBJ: Section 19.5

Chapter 20. Total Quality

Management
Test Bank

TRUE/FALSE

1. True or False
Random variation occurs due to identifiable causes that have changed the
process.

ANS: F PTS: 1 OBJ: Section 20.1

2. True or False
Assignable variation occurs due to identifiable causes that have changed the
process.

ANS: T PTS: 1 OBJ: Section 20.1

3. True or False
Where traditional quality control tended to be results oriented, total quality
management is process oriented.

ANS: T PTS: 1 OBJ: Section 20.3

4. True or False
Perceived quality refers to attributes that relate to the human senses, for
example, how a product looks, feels, tastes, or smells.

ANS: F PTS: 1 OBJ: Section 20.1

5. True or False
Six Sigma is a philosophy that focuses on small, ongoing improvements rather
than relying on large-scale innovations, such as might come from advances in
technology or equipment.

ANS: F PTS: 1 OBJ: Section 20.3

6. True or False
Competitive benchmarking involves studying, and attempting to emulate, the
strategies and practices of organizations already known to generate world-class
products and services.

ANS: T PTS: 1 OBJ: Section 20.4

7. True or False
In general, as long as random variation is absent and assignable variation
remains within acceptable limits, the process is deemed to be stable, or in
statistical control.

ANS: F PTS: 1 OBJ: Section 20.2

8. True or False
Although both statistical process control (SPC) and acceptance sampling make
inferences on the basis of samples, SPC uses sampled products to make
inferences about a larger population of the products, while acceptance sampling
uses the sampled products to make inferences about the process from which
they came.
ANS: F PTS: 1 OBJ: Section 20.2

9. True or False
Acceptance sampling involves inspection of a sample of products after an entire
production run or shipment lot has been produced. As such, it represents a
defect-detection approach to quality management.

ANS: T PTS: 1 OBJ: Section 20.2

10. True or False

One of Dr. Deming’s earliest contributions to total quality management was the
Deming cycle, also known as the Deming wheel and the PDCA (Plan-Do-Check-
Act) cycle.

ANS: T PTS: 1 OBJ: Section 20.3

11. True or False

The Pareto diagram, also known as the Juran diagram, is a bar chart describing
the relative frequencies with which various kinds of defects, or nonconformities,
have occurred.

ANS: T PTS: 1 OBJ: Section 20.5

12. True or False

When the purpose of sampling is to detect when a process becomes too
variable, the chart of choice will be a c-chart.

ANS: F PTS: 1 OBJ: Section 20.8

13. True or False

Control charts for variables are appropriate whenever we are interested in
monitoring measurements, such as weights, diameters, or temperature.

ANS: T PTS: 1 OBJ: Section 20.6

14. True or False

When the purpose of sampling is to detect when a process becomes too
variable, the chart of choice will be an R chart.

ANS: T PTS: 1 OBJ: Section 20.7

15. True or False
The p-chart and the c-chart are examples of control charts for attributes

ANS: T PTS: 1 OBJ: Section 20.8

16. True or False

The cause-and-effect diagram visually depicts the operations (or subprocesses)
involved in a process, showing the sequential relationships between them.

ANS: F PTS: 1 OBJ: Section 20.5

17. True or False

Control charts are available for individual observations, moving averages, and
moving ranges.

ANS: T PTS: 1 OBJ: Section 20.9

18. True or False

The process flow chart is used to tally frequency counts or record measurements
and is a mechanism for entering and retaining data that may be subject to
further analysis by another statistical tool.

ANS: F PTS: 1 OBJ: Section 20.5

19. True or False

If a point is more than 3 sigmas away from the centerline, or if two out of three
consecutive points are on the same side of the centerline and more than 2
sigmas away from it, the process is deemed to be in control.

ANS: F PTS: 1 OBJ: Section 20.9

20. True or False

If six points in a row are all headed either upward or downward, or if nine points
in a row are on the same side of the centerline, the process is judged to be out
of control.

ANS: T PTS: 1 OBJ: Section 20.9

21. True or False

Much of the emphasis in TQM is on understanding and reducing variation within
the process through which the product is produced, and samples of output are
used in reaching inferences about the stability of the process.

ANS: T PTS: 1 OBJ: Section 20.10

22. True or False

The TQM philosophy of defect prevention has quality integrated throughout the
organizational structure and central to corporate thinking in all matters.

ANS: T PTS: 1 OBJ: Section 20.10

23. True or False

A popular and important tool for applying TQM is statistical process control,
where sampled products are used in making inferences about the process from
which they came.

ANS: T PTS: 1 OBJ: Section 20.10

MULTIPLE CHOICE

1. Which of the following relates to costs of conformance?

a. Defective products that reduce goodwill.
b. Poor quality requiring product recalls.
c. Periodic worker training.
d. Poor quality requiring warranty expenses.
e. Product liability lawsuits.
ANS: C PTS: 1 OBJ: Section 20.1

2. Which of the following relates to costs of non-conformance?

a. Coordination with suppliers.
b. Defective products that reduce goodwill.
c. Periodic customer surveys.
d. Worker involvement.
e. Revisions to product design.
ANS: B PTS: 1 OBJ: Section 20.1

3. An electronics part manufacturer reprimanded an employee. The number of

defective parts produced by the employee increased. The increase in the
number of defective parts is probably an example of:
a. assignable variation.
b. common-cause variation.
c. random variation.
d. homoscedasticity.
e. costs of attrition.
ANS: A PTS: 1 OBJ: Section 20.1

4. Which of the following statements is correct with regard to random variation?

a. It occurs as the result of chance
b. It is inherent in practically any process
c. It leads to random variation in the product
d. It can often be reduced by using more expensive machines or materials
e. All of these statements are correct
ANS: E PTS: 1 OBJ: Section 20.1

5. A random sample of 100 rods from a process with a mean of 20 feet produced
a sample mean of 20.01 feet and a standard deviation of 0.015. This difference
between the process mean and the sample mean is likely to be:
a. assignable variation.
b. special-cause variation.
c. random variation.
d. homoscedasticity.
e. costs of attrition.
ANS: C PTS: 1 OBJ: Section 20.1

6. Although both statistical process control and acceptance sampling make

inferences on the basis of samples,
a. acceptance sampling involves inspection of a sample of products during the
production run.
b. SPC uses sampled products to make inferences about the process from which
they came.
c. acceptance sampling uses sampled products to make inferences about a
larger population of the products.
d. Both B and C
e. All of the above statements are true.
ANS: D PTS: 1 OBJ: Section 20.2

7. Variations in process output that are caused by events that in general cannot
be eliminated without changing the process are:
a. assignable variations.
b. random variations.
c. out of control variations.
d. None of these.
e. All of these.
ANS: B PTS: 1 OBJ: Section 20.1

8. When no point lies outside the control limits of a chart, we conclude that:
a. variation in the process is caused by assignable causes and there is enough
evidence to infer that the process is in statistical control.
b. variation in the process is caused by chance and there is enough evidence to
infer that the process is out of control.
c. variation in the process is caused by chance and there is not enough evidence
to infer that the process is out of control.
d. variation in the process is caused by assignable causes and there is not
enough evidence to infer that the process is out of control.
e. None of these.
ANS: C PTS: 1 OBJ: Section 20.2

9. Variations in process output that are caused by specific events or factors that
are frequently temporary such as machine malfunction are:
a. assignable variations.
b. chance variations.
c. out of control variations.
d. random variations.
e. All of these.
ANS: A PTS: 1 OBJ: Section 20.1

10. Variations in process output that can usually be identified and eliminated
without changing the process are:
a. assignable variations.
b. chance variations.
c. out of control variations.
d. random variations.
e. All of these.
ANS: A PTS: 1 OBJ: Section 20.1

11. In statistical process control (SPC), a Type I error occurs if we conclude that
the process is:
a. in control when in fact it is not.
b. out of control when in fact it is not.
c. in control when this is really true.
d. out of control when this is really true.
e. None of these.
ANS: B PTS: 1 OBJ: Section 20.6

12. Which of the following describes the purpose of statistical process control
(defect-prevention)?
a. A consumer buys a TV and plugs it in. It doesn’t work and she returns it.
b. A soft drink company samples its product at 25 retail establishments to
determine if the canner’s mixture meets the soft drink company’s standard.
c. The Army purchases hammers and tests 10 of them before accepting the
entire shipment.
d. Computer chips received by a computer maker are sampled before the
shipment is accepted or rejected.
e. The manufacturer of pocket knifes samples its process at three stages before
allowing the pocket knives to be assembled.
ANS: E PTS: 1 OBJ: Section 20.2

13. Which of the following describes the purpose of acceptance sampling

(defect-detection)?
a. Computer chips received by a computer maker are sampled before the
shipment is accepted or rejected.
b. The manufacturer of pocket knifes samples its process at three stages before
allowing the pocket knives to be assembled.
c. The manufacturer of gypsum wallboard subjects samples of its fireproof
version to tests in controlled fire situations.
d. Each worker is responsible for the quality of his/her output and tests each
item before sending them on to packaging.
e. A quality checksheet for each division is completed before the product is
released to retailers.
ANS: A PTS: 1 OBJ: Section 20.2

14. When the only sources of variation in a production process are caused by
chance, and random variation remains within acceptable limits, the process is
said to be:
a. stable.
b. in statistical control.
c. out of control.
d. out of luck.
e. Both A and B since they are the same.
ANS: E PTS: 1 OBJ: Section 20.2

15. Perry Company, a variety store, sends a team of five executives to Wal-Mart
headquarters in Bentonville, Arkansas, to observe the distribution and logistics
practices so that Perry Company can improve in these areas. This firm is
engaging in:
a. worker training.
b. statistical process control.
c. a quality circle.
d. competitive benchmarking.
e. acceptance sampling.
ANS: D PTS: 1 OBJ: Section 20.4

16. A company maintains a minimum of inventory of parts to keep its production

process going. If there is any interruption in the delivery of quality parts,
production stops until quality is restored. This company is using:
a. competitive benchmarking.
b. acceptance sampling.
c. just-in-time manufacturing.
d. random variation.
e. a quality circle.
ANS: C PTS: 1 OBJ: Section 20.4

17. Individual units can have higher quality than others, even while meeting
traditional specifications. Deviations from the target lead to lower and lower
quality of the unit. This concept is associated with a:
a. cause and effect diagram.
b. process flow chart.
c. check sheet.
d. Taguchi method.
e. Pareto diagram.
ANS: D PTS: 1 OBJ: Section 20.5

18. The visual display of effects and their possible causes as a method of
problem solving is associated with a:
a. cause and effect diagram.
b. process flow chart.
c. check sheet.
d. Taguchi method.
e. Pareto diagram.
ANS: A PTS: 1 OBJ: Section 20.5

19. When a process that is governed by a Six Sigma approach to quality

improvement is found to be in statistical control, the expected number of
defects per million products or opportunities is
a. 1.2.
b. 1.5.
c. 2.0.
d. 3.4.
e. 6.0.
ANS: D PTS: 1 OBJ: Section 20.3

20. Control charts that are used to monitor a process whose results are
categorized as either defective or non-defective are called:
a. control charts for attributes.
b. control charts for variables.
c. control charts for normality.
d. control charts for out of luck.
e. None of these.
ANS: A PTS: 1 OBJ: Section 20.6

21. For control chart, the lower and upper control limits are usually set at:
a. five standard deviations from the centerline.
b. four standard deviations from the centerline.
c. three standard deviations from the centerline.
d. two standard deviations from the centerline.
e. one standard deviation from the centerline.
ANS: C PTS: 1 OBJ: Section 20.7

22. A chart for a normally distributed random variable shows that one sample
mean is outside the control chart limits. The probability that this happened by
chance is:
a. 0.9554.
b. 0.5000.
c. 0.9974.
d. 0.0300
e. 0.0026
ANS: E PTS: 1 OBJ: Section 20.7

23. The “fraction-defective” control chart is an alternative term for the:

a. c-chart.
b. chart.
c. p-chart.
d. R-chart.
ANS: C PTS: 1 OBJ: Section 20.8

24. Forty samples of size 1,000 were drawn from a manufacturing process and
the number of defectives in each sample was counted. The mean sample
proportion was 0.05. The centerline for the p chart is:
a. 0.05.
b. 50.0.
c. 2.00.
d. 25.0.
ANS: A PTS: 1 OBJ: Section 20.8

25. Fifty samples of size 600 were drawn from a manufacturing process and the
number of defectives in each sample was counted. The mean sample proportion
was 0.025. The lower control limit for the 3-sigma p chart is:
a. 0.1561.
b. 0.0059.
c. 0.0064.
d. 0.0191.
ANS: B PTS: 1 OBJ: Section 20.8

26. Thirty samples of size 1200 were drawn from a manufacturing process and
the number of defectives in each sample was counted. The mean sample
proportion was 0.04. The upper control limit for the 3-sigma p chart is:
a. 0.0170.
b. 0.0570.
c. 0.1518.
d. 0.0230.
ANS: B PTS: 1 OBJ: Section 20.8

27. Which of the following statements are not true?

a. Both Minitab and Excel (with the Data Analysis Plus add-in) provide a
complete battery of tests regarding the state of control of the process.
b. Minitab automatically does all available diagnostic tests regarding the state of
control of the process, but with Excel we must select “Test” option and specify
“Select all tests”.
c. Self-diagnosis regarding the state of control of the process with both Excel
and Minitab takes the form of looking for and reporting any of 8 conditions and
patterns.
d. All of these statements are true.
e. All of these statements are not true.
ANS: B PTS: 1 OBJ: Section 20.9

28. Which of the following are among the statistical tools discussed in your text
and used in applying TQM?
a. The process flow chart
b. The cause-and-effect diagram
c. The Pareto diagram
d. The Taguchi view of quality loss
e. All of these
ANS: E PTS: 1 OBJ: Section 20.10

NUMERIC RESPONSE

1. Ground coffee empties into a chute containing a roll of plastic, which forms a
sealed bag of coffee. From every ten bags filled, four are randomly sampled and
weighed to see if the mean is correct (the process in control). The average mean
for twenty samples of four equals 6.01 ounces. The average range of the twenty
samples is 0.08 ounces. What will be the 3-sigma lower control limit for the
mean chart?

ANS: 5.952

PTS: 1 OBJ: Section 20.7

2. A 3-sigma mean chart for a normally distributed random variable shows that
one mean lies out of the control limits. What is the probability that this
observation is a result of random chance?

ANS: 0.0026

PTS: 1 OBJ: Section 20.7

3. Ground coffee empties into a chute containing a roll of plastic, which forms a
sealed bag of coffee. The weight on the coffee bag states the weight is 6
ounces. From every ten bags filled, four are randomly sampled and weighed to
see if the mean is correct (the process in control). The standard deviation of the
filling process is 0.05 ounces. Compute the 3-sigma lower control limit for the
mean chart.

ANS: 5.925

PTS: 1 OBJ: Section 20.7

4. When a given process is operating properly, the percentage of defectives is

10%. For a 3-sigma p-chart in which the upper and lower control limits are 4
percentage points apart, how large will each sample have to be?

ANS: 2025

PTS: 1 OBJ: Section 20.8

COMPLETION

1. ____________________ involves inspection of a sample of products after an

entire production run or shipment lot has been produced.

ANS: Acceptance sampling

PTS: 1 OBJ: Section 20.2

2. ____________________ is a graphical procedure to make inferences about the

process from which a sample was taken.

ANS: Statistical process control

PTS: 1 OBJ: Section 20.2

3. The four letters in W. Edwards Deming’s PDCA cycle stand for

____________________.

ANS:
Plan, Do, Check, and Act
Plan, Do, Check, Act

PTS: 1 OBJ: Section 20.3

4. Costs of preventing poor quality are also known as ____________________.

ANS: costs of conformance

PTS: 1 OBJ: Section 20.1

5. Costs that occur as the result of poor quality are also known as
____________________.

ANS: costs of nonconformance

PTS: 1 OBJ: Section 20.1

6. Industry often refers to assignable variation as ____________________ variation.

ANS: special-cause

PTS: 1 OBJ: Section 20.1

7. The Statistical Process Control (SPC) Chart was developed by

___________________________________ during the 1920s. This is a graphical
procedure for determining whether a production process is operating properly.

ANS: Walter Shewhart

PTS: 1 OBJ: Section 20.2

8. Based on an earlier model called the Shewhart cycle, the Plan-Do-Check-Act

(PDCA) cycle was popularized in the 1950’s by ____________________.

ANS: W. Edwards Deming

PTS: 1 OBJ: Section 20.3

9. The idea of total quality management in a word from the Japanese is “Kaizen”
or improvement. In his 1986 book, Kaizen, author ____________________ describes
the concept that Kaizen represents.

ANS: Masaaki Imai

PTS: 1 OBJ: Section 20.3

10. The quality improvement program that, if properly implemented, is expected
to experience only 3.4 defects per million products or opportunities is known as
____________________.

ANS: Six Sigma

PTS: 1 OBJ: Section 20.3

11. A bar chart describing the relative frequencies with which various kinds of
defects or nonconformities have occurred is called ____________________.

ANS: a Pareto diagram

PTS: 1 OBJ: Section 20.5

12. The cause-and-effect diagram, developed by Kaoru Ishikawa, assists

problem solving by visually depicting effects and their possible causes. Because
of its appearance, it is sometimes called a ____________________.

ANS: fishbone diagram

PTS: 1 OBJ: Section 20.5

13. An approach to quality improvement that involves studying, and attempting

to emulate, the strategies and practices of organizations already known to
generate world-class products and service is known as ____________________.

ANS: competitive benchmarking

PTS: 1 OBJ: Section 20.4

14. Each sample involves a 9 square foot piece of carpet. The number of flaws
found in a piece would be entered on a(n) ____________________ chart.

ANS: c-chart

PTS: 1 OBJ: Section 20.8

Lower value = ____________________

Upper value = ____________________

ANS:
29.724; 54.276

PTS: 1 OBJ: Section 20.7

2. A dispenser of yogurt fills cups with an average of 4 ounces with a standard

deviation of 0.25 ounces. Determine the centerline, lower and upper control
limits for a 3-sigma mean chart when sample size is 9 cups.

Centerline = ____________________

Lower value = ____________________

Upper value = ____________________

ANS:
4; 3.75; 4.25

PTS: 1 OBJ: Section 20.7

NARRBEGIN: Bottles
A bottle filling machine fills bottles with 16 oz of soda. Each hour, 3 bottles are
weighed on a precision scale to determine if the process is under control. The
following data has been collected from the last 4 hours. Each value in the table
represents the weight of an individual bottle.

Time Bottle 1 Bottle 2 Bottle 3

7 AM 16.3 16.4 15.8
8 AM 16.0 16.2 16.4
9 AM 15.7 16.1 16.3
10 AM 16.0 15.9 16.2
NARREND
3. Assuming this data was collected when the process was operating
satisfactorily, construct 3-sigma limits for the mean chart.

ANS:
UCL = 16.59
LCL = 15.62

PTS: 1 OBJ: Section 20.7

4. Assuming this data was collected when the process was operating
satisfactorily, construct 3-sigma limits for the range chart.

ANS:
UCL = 1.22
LCL = 0

PTS: 1 OBJ: Section 20.7

5. At 11:00 AM, the weights of the following three bottles were recorded: 16.0,
16.7, 15.2. According to this sample, is the process in control?

ANS:
Sample mean = 15.97
Sample range = 1.5
Since the sample range exceeds the range chart limits, the process is out if
control.

12. Compute the centerline and control limits for the chart.

Centerline = ____________________

Lower value = ____________________

Upper value = ____________________

ANS:
20.76; 11.5163; 30.0037

PTS: 1 OBJ: Section 20.7

13. Draw the chart on a control chart

ANS:

PTS: 1 OBJ: Section 20.7

14. Does it appear that the process is under control? Explain.

ANS:
No; The chart indicates that the process went out of control at sample 13.
PTS: 1 OBJ: Section 20.7

15. A particular golfer is obsessed with making 10 foot putts. Each day that he
practices, he puts 60 times and counts his misses. The following table indicates
how he has done over the last 10 practices.

Day Number of Misses

1 15
2 10
3 12
4 16
5 14
68
7 10
8 13
9 10
10 12

Set up a 3-sigma control chart using the previous data.

ANS:
UCL = 0.3549
LCL = 0.0451

PTS: 1 OBJ: Section 20.8

16. In a set of data collected for construction of a c-chart, the average number
of defects per unit of output is = 9. What are the 3-sigma lower and upper
control limits for the control chart?

Lower value = ____________________

Upper value = ____________________

ANS:
0; 18

PTS: 1 OBJ: Section 20.8

17. A basketball player has been keeping track of his free throw shooting
practice over the summer. Each day that he practices, he shoots 150 free throws
and counts his misses. The following table indicates how he has done over the
last 20 practices.

Day Number of Misses Day Number of Misses

1 40 11 40
2 36 12 41
3 35 13 39
4 41 14 39
5 40 15 37
6 46 16 44
7 38 17 41
8 40 18 38
9 37 19 40
10 43 20 38

Set up a 3-sigma control chart using the previous data.

ANS:
UCL = 0.372
LCL = 0.156

PTS: 1 OBJ: Section 20.8

NARRBEGIN: Random samples

Random samples of 200 parts were taken on an assembly line every hour for the
past 25 hours. The number of defective parts is shown in the accompanying
table.
NARREND
18. Calculate the centerline and control limits for the p-chart.

Centerline = ____________________

Lower value = ____________________

Upper value = ____________________

ANS:
0.0334; 0.0; 0.715

PTS: 1 OBJ: Section 20.8

19. Construct the p chart and determine if the production process is under
control.

ANS:

The process is out-of-control at sample 22.

PTS: 1 OBJ: Section 20.8

ESSAY

1. According to Greg Brue, author of Six Sigma for Managers, Six Sigma has a
strong profitability and project/problem orientation, and involves five phases.
List these phases.

ANS:
(1) define the project or goal and the internal and external customers involved;
(2) measure the current performance of the process;
(3) analyze the root causes of the defects generated by the process;
(4) improve the process so as to eliminate the defects;
(5) control the future performance of the process.

PTS: 1 OBJ: Section 20.3

2. Explain why quality is important.

ANS:
Quality is important because customers value it, and because quality and the
lack of it cost money. Even spending a lot of money to prevent poor quality is a
bargain compared to the enormous costs incurred by poor quality.

PTS: 1 OBJ: Section 20.1

3. Given that a production process may experience both random and assignable
variation, for which type of variation is the source generally easier to identify
and determine? Why?

ANS:
It is generally easier to find and eliminate the source for assignable variation
than for random variation. Assignable variation can be traced to some
identifiable cause, and the cause can be changed or eliminated. Random
variation, on the other hand, occurs because of chance.

PTS: 1 OBJ: Section 20.1

4. What are the characteristics of worker empowerment as a strategy for quality

improvement?

ANS:
Worker empowerment (1) makes the individual worker responsible for the
quality of the output from his or her own workstation, and (2) provides the
worker with the authority to make changes deemed necessary for quality
improvement.

PTS: 1 OBJ: Section 20.4

5. In a manufacturing process, what is random variation? If cereal boxes are

being filled by a machine, describe how random variation might affect the
content weight of the individual boxes.

ANS:
Random variation in a manufacturing process is the variation in the process that
results from chance. The amount of cereal injected into a box may vary as a
result of the temperature of the cereal, or the temperature of the room, or the
different compositions of the grain.

PTS: 1 OBJ: Section 20.1

6. Give an example of a product for which “conformance” would be among the

most important quality dimensions.
ANS:
Insulation of a microwave oven to EPA standards of radiation emissions would be
an important quality dimension.

PTS: 1 OBJ: Section 20.1

7. In a manufacturing process, if cereal boxes are being filled by a machine,

describe how assignable variation might affect the content weight of the
individual boxes.

ANS:
Assignable variation in the process of filling cereal boxes by machine could be a
malfunction of the weight control that might allow too much cereal into the
boxes. Other factors of assigned variation could be operator error or line voltage
“spikes”.

PTS: 1 OBJ: Section 20.1

8. Two techniques introduced during the era of statistical quality control are
especially noteworthy. What are they?

ANS:
a) Statistical process control chart: graphical procedure for determining whether
a production process is operating properly. b) Acceptance sampling: set of
procedures whereby, based on a random sampling of the items within, an entire
production lot/shipment is accepted, rejected, or subjected to further sampling.
PTS: 1 OBJ: Section 20.2

9. Statistical process control and acceptance sampling both rely on a sampling

of products to make inferences. In what important way do the two types of
inferences differ?

ANS:
SPC uses the sampled products to make inferences about the process from
which they came, while acceptance sampling uses sampled products to make
inferences about a larger population of the products themselves.

PTS: 1 OBJ: Section 20.2

10. Contrast the concepts of defect prevention and defect detection as they
might apply to each of the following “defects” in society:

A) automobile accidents
B) alcoholism

ANS:
A) Automobile accidents. Among strategies for preventing “defects”: driver
education programs, improved road signs and markings. Among strategies for
detecting “defects”: periodic driver retesting, automobile state inspection
programs, checking driver license lists with lists of persons known to have
serious alcohol, drug, medical problems that might impair their driving.;
B) Alcoholism. Preventing: educational programs, family support groups and
other approaches to dealing with some of the causes of alcoholism. Detecting:
various social and law enforcement agencies, identifying repeat DUI (driving
under the influence).
PTS: 1 OBJ: Section 20.2

11. Differentiate between statistical process control and acceptance sampling.

ANS:
SPC method represents a defect-prevention strategy by monitoring the stability
of the manufacturing process while the products are actually being made.
Acceptance sampling is used after an entire production run has been completed.
It represents a defect-detection approach to quality management rather than a
detection prevention approach.

PTS: 1 OBJ: Section 20.2

12. Summarize the steps of the Deming cycle.

ANS:
a) Plan: Develop a plan for a possible improvement to the product or the process
through which the product is made.
b) Do: Apply potential improvement in a small-scale test.
c) Check: Evaluate the change to see if it was successful.
d) Act: Based on results: adopt the plan, abandon the plan, or use the
information gained to revise the plan and go through cycle again.
PTS: 1 OBJ: Section 20.3

13. What is meant by the statement that total quality management has a
“process orientation”?

ANS:
TQM stresses the prevention of defects through continual attention to, and
improvements in, the processes through which the product is designed,
produced, delivered, and supported.

PTS: 1 OBJ: Section 20.3

14. What is the difference between total quality management and the traditional
approach to quality management?

ANS:
Traditional quality management primarily focuses on the end product and defect
detection. Total quality management is process-oriented and aims at defect
prevention.

PTS: 1 OBJ: Section 20.3

15. What is the Deming PDCA cycle and how is it applicable to total quality
management?

ANS:
Deming’s PDCA (Plan-Do-Check-Act) cycle stresses the importance of continuous
and systematic quality-improvement efforts at all levels of the organization.

PTS: 1 OBJ: Section 20.3

16. What two elements are necessary for worker empowerment to be a

successful tool in total quality management?

ANS:
First, the individual worker must be responsible for the quality of output that he
or she produces. Second, the worker must be provided with the authority to
make changes deemed necessary for quality improvement.
PTS: 1 OBJ: Section 20.4

17. What is “Kaizen”, and how is it related to total quality management?

ANS:
“Kaizen” is the name of a book written by Masaaki Imai. Kaizen is a philosophy
centered on ongoing improvement involving everyone, including workers and
managers.

21. What is competitive benchmarking, and how can it be used?

ANS:
Competitive benchmarking involves studying and emulating the strategies and
practices of organizations already known to generate products and services that
are of world-class quality.

PTS: 1 OBJ: Section 20.4

22. In what ways can large production runs and high inventory levels adversely
affect product quality?

ANS:
By the time defects or errors are discovered, there may be an extremely large
number of them. Also, due to the relatively long time that passes between the
occurrence of defects/errors and their discovery, the process problem(s) that led
to them may be difficult or impossible to identify and correct.

PTS: 1 OBJ: Section 20.4

23. What is a quality audit, and for what purposes might one be performed?

ANS:
Quality audits involve evaluating a firm’s process capabilities. The goal is to
assess the firm’s strategies, and success, in defect prevention. These audits can
also be quantified to facilitate comparisons from one firm to the next.

PTS: 1 OBJ: Section 20.4

24. Differentiate between the traditional and the Taguchi approaches to

deviations from a target dimension or measurement.

ANS:
The traditional approach views a product as either “good” or “bad”, depending
on whether it is within certain specification limits. Taguchi’s method goes
beyond this to recognize the loss in quality that occurs as a dimension or
measurement deviates from the target value.

PTS: 1 OBJ: Section 20.5

25. What is a process flow chart, and how can it contribute to the goals of total
quality management?

ANS:
By visually depicting the operations or sub-processes in a process, the process
flow chart contributes to our understanding of the process as well as to our
efforts to improve it.

PTS: 1 OBJ: Section 20.5

26. What is the “80/20” rule, and how does it apply to total quality
management?

ANS:
The “80/20” rule is a guideline which states that 80% of the problems come
from only 20% of the problem areas.

PTS: 1 OBJ: Section 20.5

27. What is a “check sheet” and what is its role in total quality management?

ANS:
A check sheet is a mechanism for entering and retaining data that may be the
subject of further analysis by another statistical tool.

All Files (Seatworks, Written Works and Exams in Bus Math 41)
0% (2)
All Files (Seatworks, Written Works and Exams in Bus Math 41)
267 pages
MCQ For Statistics 621 With Solutions PDF
82% (11)
MCQ For Statistics 621 With Solutions PDF
21 pages
UGRD-MGT6147 Strategic Cost Management Finals Examination
No ratings yet
UGRD-MGT6147 Strategic Cost Management Finals Examination
19 pages
Statistics and Probability Test Bank Chapter 03
71% (7)
Statistics and Probability Test Bank Chapter 03
39 pages
0 CBBFB 4006 Bede 1
100% (1)
0 CBBFB 4006 Bede 1
9 pages
Lecture Note On Descriptive Statistics S
No ratings yet
Lecture Note On Descriptive Statistics S
63 pages
Chapter 6-Continuous Probability Distributions: Multiple Choice
100% (1)
Chapter 6-Continuous Probability Distributions: Multiple Choice
30 pages
Astm d7137
No ratings yet
Astm d7137
17 pages
USTER AFIS PRO Measurement Principle Test Results
100% (1)
USTER AFIS PRO Measurement Principle Test Results
109 pages
Decision Tree
No ratings yet
Decision Tree
45 pages
A) Only in the symbols, we use instead of μ and n instead of N
0% (1)
A) Only in the symbols, we use instead of μ and n instead of N
24 pages
SIR CLEO - Statistics-Exam
No ratings yet
SIR CLEO - Statistics-Exam
11 pages
Assignment Module 3. Normal Distribution
50% (4)
Assignment Module 3. Normal Distribution
2 pages
Chapter 13 Decision Analysis Test Bank PDF
100% (3)
Chapter 13 Decision Analysis Test Bank PDF
42 pages
Ae 311 Midterm Exam Part
No ratings yet
Ae 311 Midterm Exam Part
13 pages
Long Test
100% (1)
Long Test
2 pages
Mid Term Examination: Weekly Sales Buy 400 Buy 500 Buy 600
No ratings yet
Mid Term Examination: Weekly Sales Buy 400 Buy 500 Buy 600
12 pages
Management Science - Chapter 7 - Test Reveiwer
No ratings yet
Management Science - Chapter 7 - Test Reveiwer
10 pages
Carlyn Cpa Encode
No ratings yet
Carlyn Cpa Encode
215 pages
Process Costing Exercise With Answers
100% (1)
Process Costing Exercise With Answers
9 pages
Linear Programming
100% (3)
Linear Programming
34 pages
Epsc 123 Online
No ratings yet
Epsc 123 Online
6 pages
Test Bank Chap 3 PDF
100% (1)
Test Bank Chap 3 PDF
36 pages
6
No ratings yet
6
5 pages
Statistics Reviewer
No ratings yet
Statistics Reviewer
11 pages
Relevant Costing PDF For Chapter
100% (2)
Relevant Costing PDF For Chapter
24 pages
Responsibility Acctng
No ratings yet
Responsibility Acctng
5 pages
Chapter 10 Cac
0% (1)
Chapter 10 Cac
49 pages
Quizzer Management Accounting
No ratings yet
Quizzer Management Accounting
6 pages
(Culture and History of The Ancient Near East 65) Leslie Anne Warden - Pottery and Economy in Old Kingdom Egypt-Brill Academic Publishers (2014)
100% (2)
(Culture and History of The Ancient Near East 65) Leslie Anne Warden - Pottery and Economy in Old Kingdom Egypt-Brill Academic Publishers (2014)
343 pages
Multiple Choice Test Bank
100% (2)
Multiple Choice Test Bank
10 pages
Fin 2
No ratings yet
Fin 2
34 pages
First Periodical Examination Part 1. Multiple Choice (1 Pt. Each)
0% (1)
First Periodical Examination Part 1. Multiple Choice (1 Pt. Each)
6 pages
Risk Analysis in Capital Budgeting
No ratings yet
Risk Analysis in Capital Budgeting
70 pages
Inventory Model Activity
100% (1)
Inventory Model Activity
1 page
Forecasting
100% (1)
Forecasting
21 pages
Problems On Confidence Interval
100% (3)
Problems On Confidence Interval
6 pages
Chapter 9 Testbank
100% (5)
Chapter 9 Testbank
34 pages
OM Test Bank - Chapte3
100% (2)
OM Test Bank - Chapte3
10 pages
CH 3
100% (1)
CH 3
31 pages
The Myrtle Beach International Airport Provides A... : Step-By-Step
No ratings yet
The Myrtle Beach International Airport Provides A... : Step-By-Step
4 pages
Ho There Is No Significant Difference Among The Means. Ha There Is A Significant Difference Among The Means
No ratings yet
Ho There Is No Significant Difference Among The Means. Ha There Is A Significant Difference Among The Means
3 pages
The Expenditure Cycle
No ratings yet
The Expenditure Cycle
10 pages
Math 156 Practice - Midterm - Exam
No ratings yet
Math 156 Practice - Midterm - Exam
80 pages
Chapter 11
100% (1)
Chapter 11
15 pages
CH Chapter 4 Test Bank CH Chapter 4 Test Bank
No ratings yet
CH Chapter 4 Test Bank CH Chapter 4 Test Bank
32 pages
Accy225 Tri 2 2019 Tutorial 3 Revenue and Expenditure Controls Solution
No ratings yet
Accy225 Tri 2 2019 Tutorial 3 Revenue and Expenditure Controls Solution
7 pages
Income Tax 2
100% (1)
Income Tax 2
12 pages
Retained Earnings
100% (1)
Retained Earnings
4 pages
Probability Test Bank
100% (3)
Probability Test Bank
2 pages
Ch1 Test Bank Handout
100% (1)
Ch1 Test Bank Handout
8 pages
Answers To Assignment 1
No ratings yet
Answers To Assignment 1
3 pages
MAS 8 FS Analysis Answers
No ratings yet
MAS 8 FS Analysis Answers
15 pages
Doc
No ratings yet
Doc
42 pages
NCFM Surveillance Module
100% (1)
NCFM Surveillance Module
149 pages
CH1 Hbotb
100% (1)
CH1 Hbotb
7 pages
Test Bank DBA Chapter 3 Chi Square
100% (1)
Test Bank DBA Chapter 3 Chi Square
20 pages
Chapter 2 Exercise
No ratings yet
Chapter 2 Exercise
5 pages
Multiple Choice: Property of STI
No ratings yet
Multiple Choice: Property of STI
2 pages
Production and Operations Management Mid Sem Exam
No ratings yet
Production and Operations Management Mid Sem Exam
10 pages
Finance 8172765
50% (2)
Finance 8172765
2 pages
Cost Accounting 1-2 Final
No ratings yet
Cost Accounting 1-2 Final
29 pages
Test Bank - Chapter 8
0% (1)
Test Bank - Chapter 8
3 pages
Quiz - WCM
No ratings yet
Quiz - WCM
1 page
Docx
No ratings yet
Docx
10 pages
STDM Sample Questions
No ratings yet
STDM Sample Questions
6 pages
Midterm Exam AK PDF
No ratings yet
Midterm Exam AK PDF
19 pages
Test Bank Chapter4
100% (1)
Test Bank Chapter4
13 pages
Uster Statistics-50s CBD Compact Cone
100% (1)
Uster Statistics-50s CBD Compact Cone
6 pages
CVP Analysis Review Problem Solution
No ratings yet
CVP Analysis Review Problem Solution
3 pages
Question 1
No ratings yet
Question 1
1 page
Disclosure of Interests in Other Entities: Ifrs 12
No ratings yet
Disclosure of Interests in Other Entities: Ifrs 12
32 pages
Measures of Variability
No ratings yet
Measures of Variability
21 pages
Errors in Chemical Analysis
No ratings yet
Errors in Chemical Analysis
19 pages
Goa Climatic Data
No ratings yet
Goa Climatic Data
11 pages
Testing The Labor Theory of Value in Sweden
No ratings yet
Testing The Labor Theory of Value in Sweden
6 pages
Financial Management: Valuation of Bonds and Shares Quiz
No ratings yet
Financial Management: Valuation of Bonds and Shares Quiz
12 pages
Engelbert P. Quimson Activity No. 4
No ratings yet
Engelbert P. Quimson Activity No. 4
2 pages
Engelbert Quimson Activity No.3
No ratings yet
Engelbert Quimson Activity No.3
1 page
Demand Puzzle
No ratings yet
Demand Puzzle
1 page
Measure of Dispersion Statistics
No ratings yet
Measure of Dispersion Statistics
24 pages
PDF Intermediate Accounting 1 2 - Compress
No ratings yet
PDF Intermediate Accounting 1 2 - Compress
87 pages
CH 11
No ratings yet
CH 11
111 pages
Specific Intangible Asset
No ratings yet
Specific Intangible Asset
30 pages
Error Correction and Financial Statements
No ratings yet
Error Correction and Financial Statements
61 pages
Theory of Accounts
No ratings yet
Theory of Accounts
12 pages
Comm 215.MidtermReview
No ratings yet
Comm 215.MidtermReview
71 pages
Application of Statistical Techniques in Food Science: Chemical Analysis Data
No ratings yet
Application of Statistical Techniques in Food Science: Chemical Analysis Data
12 pages
This Study Resource Was: Ca/Sv/Rs 4,750,000 7,750,000 3,000,000
No ratings yet
This Study Resource Was: Ca/Sv/Rs 4,750,000 7,750,000 3,000,000
3 pages
A Study On Credit Management
No ratings yet
A Study On Credit Management
16 pages
Anish Final
No ratings yet
Anish Final
17 pages
This Study Resource Was: ACC539: Expenditure Cycle Solutions Problem 8.4
No ratings yet
This Study Resource Was: ACC539: Expenditure Cycle Solutions Problem 8.4
9 pages
PTMC06 UNIV Parma Italy Casoli 1
No ratings yet
PTMC06 UNIV Parma Italy Casoli 1
21 pages
SMS 202
No ratings yet
SMS 202
171 pages
Chapter 10 Homework and Solutions 1.: Account Titles and Explanation Debit Credit
No ratings yet
Chapter 10 Homework and Solutions 1.: Account Titles and Explanation Debit Credit
24 pages
Quiz PDF
No ratings yet
Quiz PDF
8 pages
Valdivia-Cea - 2017 - Assessment of Methods To Determine Soil
No ratings yet
Valdivia-Cea - 2017 - Assessment of Methods To Determine Soil
16 pages
Control of The Adsorption of Dyes On Cotton
No ratings yet
Control of The Adsorption of Dyes On Cotton
262 pages
Application of Statistical Concepts in The Determination of Weight Variation in Samples
100% (1)
Application of Statistical Concepts in The Determination of Weight Variation in Samples
4 pages
Chapter 3
No ratings yet
Chapter 3
32 pages
This Study Resource Was: Problem
No ratings yet
This Study Resource Was: Problem
2 pages
Data Analysis Opdracht
No ratings yet
Data Analysis Opdracht
10 pages
(Journal of Laboratory Medicine) Revision of The Guideline of The German Medical Association On Quality Assurance in Medical Laboratory Examinations Rili-BAEK (Unauthorized Translation)
No ratings yet
(Journal of Laboratory Medicine) Revision of The Guideline of The German Medical Association On Quality Assurance in Medical Laboratory Examinations Rili-BAEK (Unauthorized Translation)
44 pages
THROMBOREL-S 10XF.4ML - LOT 572105 DXDCM 090234ed81ed8358-1702545839019
No ratings yet
THROMBOREL-S 10XF.4ML - LOT 572105 DXDCM 090234ed81ed8358-1702545839019
5 pages
Research Paper Descriptive Analysis Assignment Guide
No ratings yet
Research Paper Descriptive Analysis Assignment Guide
3 pages
Share Khan Brokerage
No ratings yet
Share Khan Brokerage
56 pages
AP8-artikel-Morphological Characterization and Its Variation of Wirasangka Mango
No ratings yet
AP8-artikel-Morphological Characterization and Its Variation of Wirasangka Mango
7 pages
Incertidumbre en La Determinacion de Toxinas Lipoficas Por HPLC
No ratings yet
Incertidumbre en La Determinacion de Toxinas Lipoficas Por HPLC
4 pages