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likelihood of an error in arithmetic is high when a large number of values are con-
cerned. On the other hand, statistical software packages and spreadsheets can
provide accurate information in seconds.
At the option of your instructor, and depending on the software system avail-
able, we urge you to apply a computer package to the exercises in the Data Set
Exercises section in each chapter. It will relieve you of the tedious calculations and
allow you to concentrate on data analysis.

Chapter Summary
I. Statistics is the science of collecting, organizing, presenting, analyzing, and interpreting
data to assist in making more effective decisions.
II. There are two types of statistics.
A. Descriptive statistics are procedures used to organize and summarize data.
B. Inferential statistics involve taking a sample from a population and making estimates
about a population based on the sample results.
1. A population is an entire set of individuals or objects of interest or the measure-
ments obtained from all individuals or objects of interest.
2. A sample is a part of the population.
III. There are two types of variables.
A. A qualitative variable is nonnumeric.
1. Usually we are interested in the number or percent of the observations in each
category.
2. Qualitative data are usually summarized in graphs and bar charts.
B. There are two types of quantitative variables and they are usually reported numerically.
1. Discrete variables can assume only certain values, and there are usually gaps
between values.
2. A continuous variable can assume any value within a specified range.
IV. There are four levels of measurement.
A. With the nominal level, the data are sorted into categories with no particular order to
the categories.
B. The ordinal level of measurement presumes that one classification is ranked higher than
another.
C. The interval level of measurement has the ranking characteristic of the ordinal level
of measurement plus the characteristic that the distance between values is a con-
stant size.
D. The ratio level of measurement has all the characteristics of the interval level, plus there
is a 0 point and the ratio of two values is meaningful.

Chapter Exercises
5. Explain the difference between qualitative and quantitative variables. Give an example of
qualitative and quantitative variables.
6. Explain the difference between a sample and a population.
7. Explain the difference between a discrete and a continuous variable. Give an example of
each not included in the text.
8. For the following questions, would you collect information using a sample or a popula-
tion? Why?
a. Statistics 201 is a course taught at a university. Professor A. Verage has taught nearly
1,500 students in the course over the past 5 years. You would like to know the aver-
age grade for the course.
b. As part of a research project, you need to report the average profitability of the num-
ber one corporation in the Fortune 500 for the past 10 years.
c. You are looking forward to graduation and your first job as a salesperson for one of
five large pharmaceutical corporations. Planning for your interviews, you will need to
know about each company’s mission, profitability, products, and markets.
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What Is Statistics? 17

d. You are shopping for a new MP3 music player such as the Apple iPod. The manu-
facturers advertise the number of music tracks that can be stored in the memory. Usu-
ally, the advertisers assume relatively short, popular music to estimate the number of
tracks that can be stored. You, however, like Broadway musical tunes and they are
much longer. You would like to estimate how many Broadway tunes will fit on your
MP3 player.
9. Exits along interstate highways were formerly numbered successively from the western or
southern edge of a state. However, the Department of Transportation has recently changed
most of them to agree with the numbers on the mile markers along the highway.
a. What level of measurement were data on the consecutive exit numbers?
b. What level of measurement are data on the milepost numbers?
c. Discuss the advantages of the newer system.
10. A poll solicits a large number of college undergraduates for information on the following
variables: the name of their cell phone provider (AT&T, Verizon, and so on), the numbers
of minutes used last month (200, 400, for example), and their satisfaction with the ser-
vice (Terrible, Adequate, Excellent, and so forth). What is the data scale for each of these
three variables?
11. Barnes & Noble stores recently began selling the Nook. With this device, you can
download over 1,500 books electronically and read the book on a small monitor instead
of purchasing the book. Assume you have the number of Nooks sold each day for the
last month at the Barnes & Noble store at the Market Commons Mall in Riverside,
California. Describe a condition in which this information could be considered a sample.
Illustrate a second situation in which the same data would be regarded as a population.
12. Utilize the concepts of sample and population to describe how a presidential election is
unlike an “exit” poll of the electorate.
13. Place these variables in the following classification tables. For each table, summarize your
observations and evaluate if the results are generally true. For example, salary is reported
as a continuous quantitative variable. It is also a continuous ratio-scaled variable.
a. Salary
b. Gender
c. Sales volume of MP3 players
d. Soft drink preference
e. Temperature
f. SAT scores
g. Student rank in class
h. Rating of a finance professor
i. Number of home computers

Discrete Variable Continuous Variable

Quantitative a. Salary

Discrete Continuous
Nominal
Ordinal

Interval
Ratio a. Salary
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14. Using data from such publications as the Statistical Abstract of the United States, The
World Almanac, Forbes, or your local newspaper, give examples of the nominal, ordinal,
interval, and ratio levels of measurement.
15. The Struthers Wells Corporation employs more than 10,000 white collar workers in its
sales offices and manufacturing facilities in the United States, Europe, and Asia. A sam-
ple of 300 of these workers revealed 120 would accept a transfer to a location outside
the United States. On the basis of these findings, write a brief memo to Ms. Wanda
Carter, Vice President of Human Services, regarding all white collar workers in the firm
and their willingness to relocate.
16. AVX Stereo Equipment, Inc., recently began a “no-hassles” return policy. A sample of
500 customers who had recently returned items showed 400 thought the policy was
fair, 32 thought it took too long to complete the transaction, and the rest had no opin-
ion. On the basis of this information, make an inference about customer reaction to the
new policy.
17. The following table reports the number of cars and light duty trucks sold by the eight
largest automakers in the first two months of 2010 compared to the first two months of
2009.

Year-to-Date Sales
Through February Through February
Manufacturer 2010 2009
General Motors Corp. 287,242 252,701
Ford Motor Company 249,514 185,825
Chrysler LLC 141,592 146,207
Toyota Motor Sales USA Inc. 198,823 226,870
American Honda Motor Co. Inc. 148,150 142,606
Nissan North America Inc. 132,761 108,133
Hyundai Motor America 64,507 55,133
Mazda Motor of America Inc. 32,748 31,821

a. Compare the total sales for the eight automakers. Has there been an increase or a
decrease in sales for 2010 compared to the same period in 2009?
b. Compute the market share for each of the companies. Has there been a large change
in the market share for any of the companies?
c. Compare the percentage increases for each of the eight companies. What significant
changes are there from 2009 to 2010 for each of the companies?
18. The following chart depicts the average amounts spent by consumers on holiday gifts.

Write a brief report summarizing the amounts spent during the holidays. Be sure to
include the total amount spent, and the percent spent by each group.