EXERCISES

Question [ 1] : What is the proper sample size that should be selected from a large shipment of canned
food to estimate the percentage of defective cans to be within 0.03 of population proportion. Use 90%
confidence level to determine the required sample size if it is known from previous pilot sample that
the percentage of defective cans is 6%.

Solution:
𝑛 =? , 𝜖 = 0.03, Zα = 1.65, 𝑝 = 0.06
2

Zα 2
1.65 2
𝑛 = 𝑝(1 − 𝑝) ( 2 ) = 0.06(1 − 0.06) ( ) = 170.61 ≅ 171
𝜖 0.03

Question [2] : A survey was conducted by the Ministry of Health to estimate the proportion of all
smoker college students. What is the most conservative estimate of the sample size that would limit
the maximum error to be within 0.03 of the population proportion for a 95% confidence interval?

Solution:
𝑛 =? , 𝜖 = 0.03, Zα = 1.96, 𝑝 = 0.5
2

Zα 2
1.96 2
𝑛 = 𝑝(1 − 𝑝) ( 2 ) = 0.5(1 − 0.5) ( ) = 1067.11 ≅ 1068
𝜖 0.03

Question [ 3 ] : A survey was conducted by the research department of the Internet Yahoo.com site to
estimate the average hour per month of visiting this site by University students. A simple random
sample of 1400 University students revealed that the average time of visiting this site is 15 hour per
month with standard deviation 1.25 hour. Develop a 95% confidence interval for the population mean.
Interpret your findings.

Solution:
𝑛 = 1400, ×= 15, 𝑆 = 1.25, Zα = 1.96
2
s
× ± Zα
2 √n
1.25
15 ± 1.96
√1400
14.93 ≤ μ ≤15.07
the population average hour per month of visiting the Internet Yahoo.com between (14.93, 15.07) with
95% degree of confidence.

1
Question [ 4 ] : The Tax department of Ministry of Finance estimated the average daily sale of every
Gas Station in a large city by 20 thousand gallon a day. Since the shape of the distribution of the daily
sales is not known, a simple random sample of 50 Gas Station was selected, and it showed that the
average daily sale is 18.5 thousand gallons with standard deviation 4.35 thousand gallon. Find the
probability that the average daily sale will be different by 1.5 thousand gallons from the average
estimated by the Tax department.
Solutions:
µ = 20, 𝑛 = 50, 𝒔 = 30
18.5−𝜇 ×−𝜇 21.5−𝜇
𝑃 (20 − 1.5 <×< 20 + 1.5) = 𝑃(18.5 <×< 21.5) = 𝑃 ( 𝑠 < 𝑠 < 𝑠 )
√𝑛 √𝑛 √𝑛

18.5−20 21.5−20
= 𝑃( 30 < 𝑧 < 30 ) = 𝑃(−0.35 < 𝑧 < 0.35 )
√50 √50

= 𝑃( −0.35 < 𝑧 < 0 ) + 𝑃 (0 < 𝑧 < 0.35) = 0.1368 + 0.1368 = 0.2736

Question [ 5 ] : Crystal Bakery sells cookies in boxes of 16 ounces . However, not all boxes contain
exactly 16 ounces of cookies, with the weight varying slightly from box to box. The quality control
department wants to know what percentage of such boxes contains less than 16 ounces of cookies. A
preliminary sample of certain boxes showed that 25% of them contain less than 16 ounces of cookies.
How large a sample should be taken so that the maximum error for 95% confidence interval of the
population proportion is 0.25?
solution:
𝑛 =? , 𝜖 = 0.25, Zα = 1.96, 𝑝 = 0.25
2

Zα 2
1.96 2
𝑛 = 𝑝(1 − 𝑝) ( 2 ) = 0.25(1 − 0.25) ( ) = 11.52 ≅ 12
𝜖 0.25

Question [ 6 ] : A survey is being planned to determine the mean amount of time corporation executive
watch television. A pilot survey indicated that the mean time per week is 12 hours, with standard
deviation of 3 hours. It is desired to estimate the mean viewing time within one-quarter hour. The 95%
degree of confidence is to be used. How many executives should be surveyed?
solution:

𝑛 =? , 𝜖 = 0.25, 𝝈 = 3, Z α = 1.96
2
𝒁𝜶 𝝈
𝟏.𝟗𝟔 ( 𝟑) 2
𝑛=( 𝟐
)2 = ( ) = 553.19 ≅ 554
𝜖 0.25

2
Question [ 7 ] : Suppose the Nile TV network is considering replacing one of its prime -time
dramas with a new family-oriented comedy. Before a final decision is made, a random sample of
400 prime-time viewers is conducted. After seeing a preview of the comedy, 250 indicate d that
they would watch it.
(i) What is the point estimate of the proportion of viewers in the population who will
watch the new show?
(ii) Develop a 95% confidence interval for the proportion of viewers in the population
who will watch the new show. Interpret your findings.
solution:
n=400,
250
𝑝= = 0.625 = point estimate
400

Zα = 1.96
2

𝑝(1 − 𝑝)
𝑝 ± Zα√
2 𝑛

0.625 (1 − 0.625)
0.625 ± 1.96 √
400
0.578 ≤ 𝑝 ≤ 0.672
the proportion of viewers in the population who will watch the new show between (0.578, 0.672)
with 95% degree of confidence.

Question [ 8 ] : A typical college student drinks an average of at least 96 ounces per day of various
beverages that contain caffeine. A sample of 12 students at a given college revealed that: the sample size
is 𝑛=12 , sample mean is 𝑥̅=99 and standard deviation 𝑠=19.23
a. Construct a 95% confidence interval to estimate the average amount of beverages consumed
containing caffeine at this college.
b. Identify the margin of error.
solution:

𝑛 = 12, ×= 99, 𝑆 = 19.23,

t α
,n−1 = t 0.025 ,10−1 = t 0.025 ,9 = 2.262
2
s
× ± t α ,n−1
2 √n
19.23
99 ± 2.262
√12
86.44 ≤ μ ≤111.56
the population average amount of beverages consumed containing caffeine at this college between (86.44,
111.56 ) with 95% degree of confidence.
s 19.23
the margin of error = t α ,n−1 = 2.262 = 12.56
2 √n √12

3
Question [ 9 ] : If monthly salary of the public sector employees is normally distributed with mean 8000
EGP and standard deviation of 2000 EGP. The Government decided to increase taxes on the top 15% of
salaries and meanwhile gives extra financial support to the lowest 25% of salaries.
(1) What is the minimum salary of an employee who will be subject to tax increase?
(2) What is the maximum salary of an employee who will deserve extra financial support?
solution:
µ= 8000 , 𝛔 =2000
1)

𝑥̅ − 𝜇
𝑧=
𝜎
𝑥̅ − 8000
1.04 =
2000
1.04 ∗ 2000 = 𝑥̅ − 8000
2080 = 𝑥̅ − 8000
𝑥̅ = 10080
2)

𝑥̅ − 𝜇
𝑧=
𝜎
𝑥̅ − 8000
−0.67 =
2000
−0.67 ∗ 2000 = 𝑥̅ − 8000
−1340 = 𝑥̅ − 8000
𝑥̅ = 6660

4
Question [ 10 ] : The marketing department at Acer Computer company would like to increase its sale
from the very expensive Lab top computer (PC) and get red from the old version ones. The Company
decided to give some bonus on the most expensive 12% of PC’s and sale the cheapest 8% of PC’s with
half prices. Knowing that the price of PC is normally distributed with mean price 32000 EGP and
standard deviation 12000 EGP.
(1) What is the minimum price of a PC that will deserve the bonus?
(2) What is the maximum price of a PC that will be sold with 50% of the price?
solution:
µ= 32000 , 𝛔 =12000
1)

𝑥̅ − 𝜇
𝑧=
𝜎
𝑥̅ − 32000
1.17 =
12000
1.17 ∗ 12000 = 𝑥̅ − 32000
14040 = 𝑥̅ − 32000
𝑥̅ = 46040
2)

𝑥̅ − 32000
−1.41 =
12000
−1.41 ∗ 12000 = 𝑥̅ − 32000
−16920 = 𝑥̅ − 32000
𝑥̅ = 15080

5
 Section 2

Exercise 1:

Students' scores on the exam are normally distributed, with a mean of 50 minutes and a standard
deviation of 9 minutes.

1. What is the probability that the students' scores will be more than 70?
2. What is the probability that the students' scores will be less than 35?
3. What is the probability that the students' scores between 40 and 60 minutes?

Solution:
µ= 50 , 𝛔 =9
𝑥−𝜇 70−𝜇 70−50
𝑃 (𝑥 > 70 ) = 𝑃( > ) = 𝑃( 𝑧 > ) = 𝑃( 𝑧 > 2.22 )
𝜎 𝜎 9

= 0.5 − 𝑃 ( 0 ≤ 𝑧 ≤ 2.22 ) = 0.5 – 0.4868 = 0.0132

𝑥−𝜇 35−𝜇 35−50
𝑃 (𝑥 < 35 ) = 𝑃( < ) = 𝑃( 𝑧 < ) = 𝑃( 𝑧 < −1.66 )
𝜎 𝜎 9

= 0.5 − 𝑃 (−1.66 ≤ 𝑧 ≤ 0 ) = 0.5 – 0.4515 = 0.0485

40−𝜇 𝑥 −𝜇 60−𝜇 40−50 60−50
𝑃 (40 < 𝑥 < 60 ) = 𝑃( < < ) = 𝑃( <𝑧< ) = 𝑃(−1.11 < 𝑧 < 1.11 )
𝜎 𝜎 𝜎 9 9

= 𝑃 (−1.11 ≤ 𝑧 ≤ 0 ) + 𝑃 (0 ≤ 𝑧 ≤ 1.11 ) = 0.3665+ 0.3665 = 0.733

Exercise 2

In a factory producing a certain type of medical device, it was found that the mean life of the device is 145
months, with a standard deviation of 30 months. If a sample is drawn of size 160 lamps, find:

1- The probability that the mean life of the device is more than 147.
2- The probability that the mean life of the device is less than 150.
3- The probability that the mean lifetime of the device is between (limited to) 146,148.

Solutions:
µ= 145 , 𝛔 =30, n = 160
×−𝜇 147−𝜇 147−145
𝑃(×> 147) = 𝑃( 𝜎 > 𝜎 ) = 𝑃( 𝑧 > 30 ) = 𝑃( 𝑧 > 0.84 )
√𝑛 √𝑛 √160

= 0.5 − 𝑃 ( 0 ≤ 𝑧 ≤ 0.84 ) = 0.5 – 0.2995 = 0.2005

×−𝜇 150−𝜇 150−145
𝑃(×< 150 ) = 𝑃( 𝜎 < 𝜎 ) = 𝑃( 𝑧 < 30 ) = 𝑃( 𝑧 < 2.11 )
√𝑛 √𝑛 √160

= 0.5 + 𝑃 ( 0 ≤ 𝑧 ≤ 6.32 ) = 0.5 + 0.4826 = 0.9826

146−𝜇 ×−𝜇 148−𝜇 146−145 148−145
𝑃(146 <×< 148 ) = 𝑃( 𝜎 < 𝜎 < 𝜎 ) = 𝑃( 30 < 𝑧 < 30 ) =
√𝑛 √𝑛 √𝑛 √160 √160
𝑃(0.422 < 𝑧 < 1.26 )
= 𝑃(0 < 𝑧 < 1.26 ) − 𝑃(0 < 𝑧 < 0.42 ) = 0.3962 − 0.1628 = 0.2334
Exercise 3
According to the latest opinion polls, 80% of those who own a computer have access to the
Internet. What is the probability that more than 300 people can access the Internet in a sample
of 400 people?
solution:
𝜋 =80% = 0.8, n = 400, 𝑃̂ = 𝑥 = 300 = 0.75
𝑛 400
𝑃̂ – 𝜋 0.75 – 𝜋 0.75 −0.8
𝑃(𝑃̂ > 0.75) = 𝑃( 𝜋(1−𝜋)
> 𝜋(1−𝜋)
) = 𝑃( 𝑧 > 0.8(1−0.8)
) = 𝑃( 𝑧 > −2.5)
√ √ √
𝑛 𝑛 400

= 0.5 + 𝑃 (−2.5 ≤ 𝑧 ≤ 0 ) = 0.5 + 0.4938 = 0.9938

Exercise 4
If a simple random sample of size 100 is drawn, and the mean value is equal to 25, then if the
sample is drawn from a normal population its variance equal 25 (or say if you know that the
variance is 25) find.
1) point estimate of the population mean.
2) An estimated 95% confidence interval for the population mean.
3) What is the sample size that should be selected so that the error in estimating the mean is
to be less than 2 (within 2).
solution:
𝑛 = 100,×= 25, 𝜎 2 = 25, 𝜎 = √𝜎 2 = 5, 𝐸 = 2
𝛼 0.05
(1 − 𝛼) = 95% = 0.95, 𝛼 = 5% = 0.05 , = = 0.025, 𝑍𝛼 = 𝑍0.025 = 1.96 𝑔𝑖𝑣𝑒𝑛
2 2 2
point estimate =×= 25
confidence interval
σ
×± Zα
2 √n
5
25 ± 1.96 ( )
√100
24.02 ≤ 𝜇 ≤ 25.98
𝒁𝜶 𝝈
𝟏.𝟗𝟔 (𝟓) 2
sample size =𝑛 = ( 𝟐
)2 = ( ) = 24.01 ≅ 25
𝐸 2

Exercise 5
To estimate the mean income in a company, a sample of 100 workers was drawn, and the mean
monthly income was found to be 1500, and the standard deviation of 400 required:
1) find point estimate and estimate A confidence interval of the mean at the 10% level of
significance.
2) What is the sample size that should be selected within 3.
Solution:
n = 100, ×=1500, S2= 400, S=20, 𝐸 = 2
𝛼
(1 − 𝛼) = 99% = 0.99, 𝛼 = 1% = 0.01, = 0.005, 𝑍𝛼 = 𝑍0.005 = 1.65
2 2
point estimate =×= 1500
confidence interval

s
× ± Zα
√n 2
20
1500 ± 1.65 ( )
√100
1496.71 ≤ μ ≤1503.29
𝐙𝛂 𝒔
1.65 (𝟐𝟎) 2
sample size =n = ( 𝟐
) 2= ( ) =121
𝐸 3

Exercise 6
A company has branches around the world, so if a sample of 10 branches was selected at the
end of last year, as follows: 40, 50, 35, 70, 80, 55,60,85,93,77 find 95% confidence interval for
the average sales of each branch of this company.
Solution:
Firstly, calculate the mean and standard deviation of the sample as follows.
∑𝑥 55+60+85+93+77+80+70+35+50+40 645
×= = = = 64.5
𝑛 10 10
∑(𝑥𝑖−× ) 2
𝑺𝟐 = =
𝑛−1
(55−64.5)2+(60−64.5)2+(85−64.5)2+(93−64.5)2+(77−64.5)2+(80−64.5)2+(70−64.5)2+(35−64.5)2+(50−64.5)2+(40−64.5)2
4
3833.764
= = 383.38
10

𝑆 = √𝑺 𝟐 = √383.38 = 19.580
α
1- α = 95% = 0.95, α = 5% =0.05, = 0.025, t α ,n−1 = t 0.025 ,10−1 = t 0.025 ,9= 2.262
2 2
confidence interval
s
× ± t α, n−1
2 √n
19.580
64.5 ± 2.262 ( )
√10
50.5 ≤ μ ≤78.5
Exercise 7
In an opinion poll conducted over the internet on a sample of 2000 visitors to a particular
website, it was found that 1600 people from this sample prefer to use this site Find:
1- a point estimate and create a 99% confidence interval for the proportion of those who
prefer this site.
2- What is the size of the sample required to be selected for the opinion poll so that it
does not differ the estimate from 0.05.
Solution:
n=2000, 1600 people from this sample prefer to use this site, 𝜖=0.05
1600
𝑃̂ = = 0.8 = point estimate
2000
α 0.01
(1- α) = 99% = 0.99, α = 1% =0.01, = = 0.005, Zα = Z0.005 = 2.58
2 2 2

𝑃̂(1 − 𝑃̂)
𝑃̂ ± Zα √
2 𝑛

0.8( 1 − 0.8)
0.8 ± 2.58 √
2000
0.777≤ p ≤0.823
Zα 2 2
1.65
sample size =𝑛 = 𝑃̂(1 − 𝑃̂) ( 𝐸 ) = 0.8(1 − 0.8) ( 0.05 ) = 426.01 ≅ 426
2
 Helwan University

HNU-BIDT

Dr. Ibrahim Hassan Ibrahim

Prof. of Applied Statistics
Dept. of Math., Insurance & Applied Stat.
Faculty of Comm. & Bus. Admin.

Dr. Ibrahim Hassan Ibrahim 1

Practice Sheet

Hypothesis Testing
The test statistic
[1] When testing the population mean:

Ibrahim Hassan 3
[2] When testing the population proportion:

∗
𝒑 − 𝝅𝟎
𝒁 =
𝝅𝟎 (𝟏 − 𝝅𝟎 )
𝒏

Ibrahim Hassan 4
Some Values to Know

Ibrahim Hassan 5
Question (1): Choose the correct answer

(1) Type II error is:

a. Reject H0 while it is false.

b. Do not reject H0 while it is false.
c. Reject H0 while it is true.
d. Significance Level.

Ibrahim Hassan 6
(2) When testing that population mean is greater than 5, the null
hypothesis is written as:

a. 𝐻0 : 𝜇 ≤ 5 b. 𝐻0 : 𝜇 ≠ 5
c. 𝐻0 : 𝜇 > 5 d. 𝐻1 : 𝜇 ≤ 5

(3) Type I error is:

a. Significance level.
b. Do not reject H0 while it is false.
c. Reject H0 while it is true.
d. a and c are true.

Ibrahim Hassan 7
Question (2): A physician measured pulse rates of 36 college
men. Based on this sample, he found that a mean pulse rate is
70 pulse beats per minute with a standard deviation of 9.85
beats per minute. Is the mean pulse rate for all college men is
different from the current standard of 72 beats per minute?

Ibrahim Hassan 8
 Solution:
n = 36, 𝑥ҧ = 70, s = 9.85

H0 : μ = 72 H1 : μ ≠ 72

70−72
The test statistic: 𝑧 = 9.85 = −1.22
ൗ 36

Two tail test: z0.025 = 1.96, two critical values ±1.96

-1.96 < 1.22 < 1.96, we don’t reject H0

We can conclude; with 0.05 level of significance, that the mean pulse rate for all
college men is not different from the current standard of 72 beats

Ibrahim Hassan 9
Question (3): The individual’s income per month in a certain population follows the
normal distribution with variance 100. If a random sample of 20 persons is selected
from this population, we calculated the mean to be 510. Can we conclude, with level
of significance 0.05, that the population mean is greater than 504?

n = 20, σ2 = 100; σ = 10 , 𝑥ҧ = 510

H0: μ ≤ 504 H1: μ > 504
510−504
The test statistic: 𝑧 = 10 = 2.68
ൗ 20

one tail test: α = 0.05; z0.05 = 1.645

2.68 > 1.645; Reject H0
We can conclude, with 0.05 significance, that the population mean is greater than
504.

Ibrahim Hassan 10
Question (4): A random sample of 100 parts is selected from an inventory. After its
investigation, it was found that 14 parts are outdated and no longer useful. Based on
this information, with significance level 1%, can we say that the rate of outdated
parts is below 15%?

n = 100, p = 14/100 = 0.14

H0: π ≥ 0.15 H1: π < 0.15
0.14−0.15
The test statistic: 𝑧 = = −0.28
0.15(1−0.15)
100
One tail test –z0.01 = -2.33
-2.33 < -0.28, Don’t reject H0
We can conclude; with significance level 0.01, that the rate of outdated parts is not
below 15%.

Ibrahim Hassan 11
Question (5): A researcher wants to verify the claim: “the average IQ is
120”, then a simple random sample of 10 college students is drawn.
Among sampled students, the average IQ score is 115 with a standard
deviation 10.

(i)What is the assumption needed to test this claim?

(ii) Assume that the assumption in (i) is satisfied, then at α = 0.02, what
is his decision?

n = 10, 𝑥ҧ = 115, 𝑠 = 10

Ibrahim Hassan 12
(i)What is the assumption needed to test this claim?
The population is normally distributed

(ii) Assume that the assumption in (i) is satisfied, then at α = 0.02, what is his
decision?
n = 10, 𝑥ҧ = 115, 𝑠 = 10
H0 : μ = 120 H1 : μ ≠ 120
115−120
The test statistic: t= 10 = −1.58
ൗ 10
Two tail test, ± t(0.01,9) = ±2.821
-2.821 < -1.58 < 2.821, Don’t reject H0

We can conclude that, with 0.02 level of significance, that the average IQ is not
different from 120.

Ibrahim Hassan 13
Question (6): Pizza-Hut claims that 90% of its order are delivered within 10
minutes of the time the order is placed. A sample of 100 order revealed that 82
were delivered within the promised time. At 10% significance level, can we
conclude that at least 90% of the orders are delivered in less than 10 minutes?

n = 100, p = 82/100 = 0.82 α = 0.10

H0: π ≥ 0.90 H1: π < 0.90

0.82−0.90
The test statistic: 𝑧 = = −2.67
0.90(1−0.90)
100

One tail test –z0.10 = -1.28 -2.67 < -1.28, Reject H0

We can not conclude; with significance level 0.10, that at least 90% of the orders are
delivered in less than 10 minutes.
Ibrahim Hassan 14
Question (7)

According to Prentice-Hall press, it is found that the mean time of

writing a text book is 15 months. A simple random sample of 16
books published with different press showed that the mean time
of writing a book is 12.5 month with standard deviation 3.6
month. Test at 2.5% significance level that the mean time of
writing a book is less than 15 months.

Ibrahim Hassan 15
Solution

𝜇0 = 15, 𝑛 = 16, 𝑥ҧ = 12.5, 𝑆 = 3.6, 𝛼 = 2.5%

(𝜎 is not known, sample size is small < 30, can assume normality).
𝐻0 : 𝜇 ≫ 15
𝐻1 : 𝜇 < 15

The test statistic is t-test, 𝛼 = 2.5%, with one left tail test, then −𝑡𝛼,(𝑛−1) = −𝑡0.025,15 = −2.131 from the

ഥ− 𝝁𝟎
𝒙 𝟏𝟐.𝟓−𝟏𝟓
t-table. 𝒕∗ = = = −𝟐. 𝟕𝟕𝟖
𝑺/ 𝒏 𝟑.𝟔/ 𝟏𝟔

Decision: Reject H0 since 𝑡 ∗ = 2.778 > 𝑡0.025,15 = 2.131 and conclude that the mean
time of writing a book is significantly less than 15 months.

Ibrahim Hassan 16
Question (8)

Research department at the Helwan National University (HNU)

indicates that 50% of the students change their major area of
study after their first year in a program. A random sample of
100 students in the College of Business revealed that 48 had
changed their major area of study after their first year of the
program. Has there been a significant decrease in the
proportion of students who change their major after the first
year in this program? Test at 5% level of significance.

Ibrahim Hassan 17
 48
Solution: 𝜋0 = 0.50, 𝑛 = 100, 𝑝 = = 0.48, 𝛼 = 5%
100

𝐻0 : 𝜋 ≫ 0.50
𝐻1 : 𝜋 < 0.50

𝛼 = 5%, with one left tail test, then −𝑍𝛼 = −𝑍0.05 = −1.65 .
The test statistic is

𝑝 − 𝜋0 0.48 − 0.50
𝑍∗ = = = −0.40
𝜋0 (1 − 𝜋0 ) 0.50(1 − 0.50)
𝑛 100

Decision: Fail to reject H0 since 𝑍 ∗ = 0.4 < 𝑍0.05 = 1.65 and conclude that there has
been no significant decrease in the proportion of students who changed their major
after the first year in this program.

Ibrahim Hassan 18
Question (9)
A tire manufacturer company claims that the mean mileage of its tire is 60200 miles. Test the
company’s claim at 5% significance level if the mean mileage of a sample of 49 tires is 59500 with
standard deviation of 4900 miles.
Solution
𝜇0 = 60200, 𝛼 = 5%, 𝑛 = 49,
𝑥ҧ = 59500, 𝑆 = 4900
(𝜎 is not known, sample size is large > 30)
𝐻0 : 𝜇 = 60200
𝐻1 : 𝜇 ≠ 60200
We have a two-tailed test then 𝑍𝛼/2 = 𝑍0.025 = 1.96

𝑥ҧ − 𝜇0 59500 − 60200
𝑍∗ = = = −1
𝑆/ 𝑛 4900/ 49
Decision: Fail to reject H0 since 𝑍 ∗ = 1 < 𝑍0.025 = 1.96 and conclude that the mean mileage of the
tire is not significantly different from 60200 miles, which means that the company’s claim is true

Ibrahim Hassan 19
Question(10)
A machine at Helwan Steel Corporation makes 3-inch-long nails. The probability distribution of
the lengths of these nails is normal with a mean of 3 inches and standard deviation of 0.1 inches.
The quality control inspector takes a sample of a 25 nail once a week and calculates the mean
length of these nails.
(1) If the sample mean was 3.04, use 5% significance level to test if the mean lengths of these
nails is greater than 3 inches.
(2) If you use 1% significance level, what will be your decision for the test in (1).
Solution
(1) 𝜇0 = 3.0, 𝜎 = 0.1, 𝑛 = 25,

𝑥ҧ = 3.04, 𝛼 = 5% (𝜎 is known, population is normally distributed)

𝐻0 : 𝜇 ≤ 3.0
𝐻1 : 𝜇 > 3.0
Ibrahim Hassan 20
 The test is right tail test and from the standard normal table with 𝛼 = 5%, we can find
the value 𝑍0.05 = 1.65, then

𝑥ҧ − 𝜇0 3.04 − 3.0
𝑍∗ = = =2
𝜎/ 𝑛 0.1/ 25

Decision: Reject H0 since 𝑍 ∗ = 2 > 𝑍0.05 = 1.65 and conclude that the mean lengths of these
nails is significantly greater than 3 inches.

(2) If 𝛼 = 1% then Z0.01 = 2.33, then 𝑍 ∗ = 2 < 𝑍𝛼 and

Decision: we fail to reject the null hypothesis H0. (Graph….)

Ibrahim Hassan 21
Applied statistics
By Nada El desouky
Problem 1
Most graduate schools of business require applicants for admission to
take the Graduate Management Admission Council’s GMAT examination.
Scores on the GMAT are roughly normally distributed with a mean of
487 and a standard deviation of 105.
1- What is the probability that the mean score of 100 individuals above
500 on the GMAT?
2- How high must an individual mean score on the GMAT in order to
score in the highest 5%?
3- What is the probability that the mean score of 100 individuals will be
between 470 and 510 on the GMAT?
Problem 2
• A company’s brand has a marked share of 30% suppose that in a
survey, 1000 consumers of the product are asked which brand they
prefer.
1- what is the probability that more than 32% of the respondents will
say they prefer this company?
2- what is the probability that less than 35% of the respondents will say
they prefer this company?
Problem 3
A researcher wishes to estimate the number of days it takes an
automobile dealer to sell a Chevrolet Aveo. A sample of 20 cars had a
mean time on the dealer’s lot of 54 days.
a- Assume the population standard deviation to be 6.0 days. Find the
best point estimate of the population mean and the 95% confidence
interval of the population mean.

b- Assume the population standard deviation is unknown and the

sample standard deviation is 5.6. Find the best point estimate of the
population mean and the 95% confidence interval of the population
mean
Problem 4
According to previous problem the researcher wants to estimate the
average number of days it takes an automobile dealer to sell a
Chevrolet Aveo. He wants to be 99% confident that the estimate is
accurate within 0.05. From a previous study, the standard deviation of
the time measured was 5 days. How many cars should be selected in
the sample?
Problem 5
• A survey conducted by a research Centre of 1404 respondents found
that 323 students paid for their education by their savings.
a- Find the 90% confidence of the true proportion of students who
paid for their education by their savings.

b- A researcher wishes to estimate, with 95% confidence, the

proportion of students paid for their education by their savings to be
accurate within 2%, a previous study shows that 40% of students paid
for their education by their savings. How many students should be
drawn in the sample.