Statistical Methods for Economics and Business Test Questions
Course Introduction
This course provides an in-depth introduction to the fundamental statistical methods used in economics and business analysis. Students will learn how to collect, organize, and interpret data relevant to decision-making processes. The curriculum covers descriptive statistics, probability theory, sampling techniques, hypothesis testing, regression analysis, and correlation, with a strong emphasis on real-world applications in economic and business contexts. By integrating theory with practical exercises and case studies, the course equips students with the quantitative skills necessary to analyze and solve a variety of economic and business problems using statistical tools.
Recommended Textbook
Business Statistics for Contemporary Decision Making 2nd Canadian Edition by Ken Black
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Chapter 1: Introduction to Statistics
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Sample
Questions
Q1) Manuel Banales,Marketing Director of Plano Power Plants,Inc.'s Electrical Division,is leading a study to identify and assess the relative importance of product features.Manuel directs his staff to design a survey questionnaire and distribute it 100 of Plano's 954 customers.Manuel is ordering a ___.
A)statistic from the customers
B)census of the customers
C)sample of the customers
D)sorting of the customers
E)parameter of the customers
Answer: C
Q2) The complete collection of all entities under study is called the sample.
A)True
B)False
Answer: False
Q3) Numbers which are used to rank-order the performance of workers represent data measured at the interval level.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Charts and Graphs
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Sample Questions
Q1) For any given data set,a frequency distribution with a larger number of classes will always be better than the one with a smaller number of classes.
A)True
B)False
Answer: False
Q2) A scatter plot is useful for examining the relationship between two numerical variables.
A)True
B)False
Answer: True
Q3) Display and analyze two variables simultaneously using cross tabulation and scatter plots.
Answer: Cross tabulation is a process for producing a two-dimensional table that displays the frequency counts for two variables simultaneously.The scatter plot is a two-dimensional plot of pairs of points from two numerical variables.It is used to graphically determine whether any apparent relationship exists between the two variables.
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Chapter 3: Descriptive Statistics
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Sample Questions
Q1) Average deviation is a common measure of the variability of data containing a set of numbers.
A)True
B)False
Answer: False
Q2) It is inappropriate to use the mean to analyze data that are not at least interval level in measurement.
A)True
B)False
Answer: True
Q3) The empirical rule says that approximately what percentage of the values would be within two standard deviations of the mean in a bell shaped set of data?
A)95%
B)68%
C)50%
D)97.7%
E)100%
Answer: A
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5
Chapter 4: Probability
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Sample Questions
Q1) Given two events A and B each with a non-zero probability,if the conditional probability of A given B is zero,it implies that the events A and B are independent.
A)True
B)False
Q2) An analysis of personal loans at a local bank revealed the following facts: 10% of all personal loans are in default (D),90% of all personal loans are not in default (D ),20% of those in default are homeowners (H | D),and 70% of those not in default are homeowners (H | D ).If a personal loan is selected at random,P (D | H)= ___.
A)0.03
B)0.63
C)0.02
D)0.18
E)0.78
Q3) Bayes' rule is an extension of the law of conditional probabilities to allow revision of original probabilities with new information.
A)True
B)False
Q4) Describe what probability is and when one would use it.
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Page 6
Chapter 5: Discrete Distributions
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Sample Questions
Q1) Solve problems involving the Poisson distribution using the Poisson formula and the Poisson table.
Q2) The mean or the expected value of a discrete distribution is the long-run average of the occurrences.
A)True
B)False
Q3) The number of cars arriving at a toll booth in five-minute intervals is Poisson distributed with a mean of 3 cars arriving in five-minute time intervals.The probability of 3 cars arriving over a five-minute interval is ___.
A)0.2700
B)0.0498
C)0.2240
D)0.0001
E)0.0020
Q4) Poisson distribution describes the occurrence of discrete events that may occur over a continuous interval of time or space.
A)True
B)False
Q5) Determine the mean,variance,and standard deviation of a discrete distribution.
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Chapter 6: Continuous Distributions
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Sample Questions
Q1) If x,the time (in minutes)to complete an oil change job at a certain auto service station,is uniformly distributed over the interval 20 to 30,inclusively (20 \(\le\) x \(\le\) 30),then the probability that an oil change job is completed in less than 17 minutes,i.e. ,P(x < 17)is ___.
A)0.500
B)0.300
C)0.000
D)0.250
E)1.000
Q2) A correction for continuity must be made when approximating the binomial distribution problems using a normal distribution.
A)True
B)False
Q3) If arrivals at a bank followed a Poisson distribution,then the time between arrivals would follow a binomial distribution.
A)True
B)False
Q4) Solve for probabilities in a continuous uniform distribution.
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8
Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) A carload of steel rods has arrived at Cybermatic Construction Company.The car contains 50,000 rods.Claude Ong,manager of Quality Assurance,directs his crew measure the lengths of 100 randomly selected rods.If the population of rods have a mean length of 120 centimetres and a standard deviation of 0.05 centimetres,the probability that Claude's sample has a mean less than 119.985 centimetres is ___.
A)0.9974
B)0.0026
C)0.4987
D)0.0013
E)0.0030
Q2) Describe the distribution of a sample's mean using the central limit theorem,correcting for a finite population if necessary.
Q3) The directory or map from which a sample is taken is called the frame.
A)True
B)False
Q4) A sampling distribution is the distribution of a sample statistic such as the sample mean or sample proportion.
A)True
B)False
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Chapter 8: Statistical Inference: Estimation for Single Populations
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Sample Questions
Q1) The normal distribution is used to test about a population mean for large samples if the population standard deviation is known."Large" is usually defined as ___.
A)at least 10
B)at least 5% of the population size
C)at least 30
D)at least 12
E)at least 100
Q2) Catherine Chao,Director of Marketing Research,is evaluating consumer acceptance of a new toothpaste package.She plans to use a 95% confidence interval estimate of the proportion of households which prefer the new packages;she will accept a 0.05 error.Previous studies indicate that new packaging has an approximately 70% acceptance rate.The sample size should be at least ___.
A)27
B)59
C)323
D)427
E)500
Q3) Use the chi-square distribution to estimate the population variance given the sample variance.
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Chapter 9: Statistical Inference: Hypothesis Testing for
Single Populations
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Sample Questions
Q1) The rejection region for a hypothesis test becomes smaller if the level of significance is changed from 0.01 to 0.05.
A)True
B)False
Q2) Reach a statistical conclusion in hypothesis testing problems about a population mean with an unknown population standard deviation using the t statistic.
Q3) Consider the following null and alternative hypotheses: H<sub>o</sub>: p \(\ge\) 0.16
H<sub>a</sub>: p < 0.16
These hypotheses ___.
A)indicate a one-tailed test with a rejection area in the right tail
B)indicate a one-tailed test with a rejection area in the left tail
C)indicate a two-tailed test
D)are established incorrectly
E)are not mutually exclusive
Q4) Solve for possible Type II errors when failing to reject the null hypothesis.
Q5) Reach a statistical conclusion in hypothesis testing problems about a population mean with a known population standard deviation using the z statistic.
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Chapter 10: Statistical Inferences About Two Populations
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Sample Questions
Q1) If a 90% confidence interval for the difference in the two population means contains zero,then the null hypothesis of zero difference between the two population means cannot be rejected at a 0.10 level of significance.
A)True
B)False
Q2) Collinsville Construction Company purchases steel rods for its projects.Based on previous tests,Claude Carter,Quality Assurance Manager,has recommended purchasing rods from Redding Rods,Inc.(population 1),rather than Stockton Steel (population 2),since Redding's rods had less variability in length.Recently,Stockton revised it rod shearing operation,and Claude has sampled the outputs from Redding's and Stockton's rod manufacturing processes.The results for Redding were s<sub>1</sub><sup>2</sup> = 0.10 with n<sub>1</sub> = 8,and,for Stockton,the results were s<sub>2</sub><sup>2</sup> = 0.05 with n<sub>2</sub> = 10.Assume that rod lengths are normally distributed in the population.Claude's null hypothesis is ___.
A) \(\sigma\)<sub>1</sub><sup>2</sup>= \(\sigma\)<sub>2</sub><sup>2</sup>
B)\(\sigma\)<sub>1</sub><sup>2</sup>\(\neq\) \(\sigma\)<sub>2</sub><sup>2</sup>
C)\(\sigma\)<sub>1</sub><sup>2</sup> > \(\sigma\)<sub>2</sub><sup>2</sup> D)\(\sigma\)<sub>1</sub><sup>2</sup> < \(\sigma\)<sub>2</sub><sup>2</sup> E)s<sub>1</sub><sup>2</sup>< s<sub>2</sub><sup>2</sup>
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Chapter 11: Analysis of Variance and Design of Experiments
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Sample Questions
Q1) Test a randomized block design that includes a blocking variable to control for confounding variables.
Q2) Test a completely randomized design using a one-way analysis of variance.
Q3) In experimental design,a characteristic of the subjects that was present prior to the experiment and is not the result of the experimenter's manipulations or control is called a classification variable.
A)True
B)False
Q4) In analysis of variance tests a t distribution forms the basis for making the decisions. A)True
B)False
Q5) The statistical methods of analysis of variance assume that the populations are normally distributed.
A)True
B)False
Q6) An experimental design contains only independent variables.
A)True
B)False
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Chapter 12: Simple Regression Analysis and Correlation
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Sample Questions
Q1) A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a linear function of batch size (the number of boards produced in one lot or batch).The intercept of this model is the ___.
A)batch size
B)unit variable cost
C)fixed cost
D)total cost
E)total variable cost
Q2) Determine the equation of the trend line to forecast outcomes for time periods in the future,using alternative coding for time periods if necessary.
Q3) Calculate the coefficient of determination to measure the fit for regression models,and relate it to the coefficient of correlation.
Q4) The difference between the actual y value and the predicted y value found using a regression equation is called the residual.
A)True
B)False
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14
Chapter 13: Multiple Regression Analysis
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Sample Questions
Q1) The multiple regression formulas used to estimate the regression coefficients are designed to ___.
A)minimize the total sum of squares (SST)
B)minimize the sum of squares of error (SSE)
C)maximize the standard error of the estimate
D)maximize the p value for the calculated F value
E)minimize the mean error
Q2) The standard error of the estimate of a multiple regression model is essentially the standard deviation of the residuals for the regression model.
A)True
B)False
Q3) Use a computer to find and interpret multiple regression outputs.
Q4) In a multiple regression model,the proportion of the variation of the dependent variable,y,accounted for the independent variables in the regression model is given by the coefficient of multiple correlation.
A)True
B)False
Q5) Understand the limitations and pitfalls of multiple regression analysis.
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Chapter 14: Building Multiple Regression Models
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Sample Questions
Q1) Qualitative data cannot be incorporated into linear regression models.
A)True
B)False
Q2) Examine the role of indicator,or dummy,variables as predictors or independent variables in multiple regression analysis.
Q3) In multiple regression analysis,qualitative variables are sometimes referred to as
A)dummy variables
B)quantitative variables
C)dependent variables
D)performance variables
E)cardinal variables
Q4) Stepwise regression is one of the ways to prevent the problem of multicollinearity.
A)True
B)False
Q5) A logarithmic transformation may be applied to both positive and negative numbers.
A)True
B)False
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Chapter 15: Time-Series Forecasting and Index Numbers
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Sample Questions
Q1) A stationary time-series data has only trend but no cyclical or seasonal effects.
A)True
B)False
Q2) Two popular general categories of smoothing techniques are averaging models and exponential models.
A)True
B)False
Q3) One of the main techniques for isolating the effects of seasonality is decomposition.
A)True
B)False
Q4) Account for seasonal effects of time-series data by using decomposition and Winters' three-parameter exponential smoothing method.
Q5) If autocorrelation occurs in regression analysis,then the confidence intervals and tests using the t and F distributions are no longer strictly applicable.
A)True
B)False
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Chapter 16: Analysis of Categorical Data
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Sample Questions
Q1) The number of degrees of freedom in a chi-square goodness-of-fit test is the number of categories minus the number of parameters estimated.
A)True B)False
Q2) In a chi-square test of independence the contingency table has 4 rows and 3 columns.The number of degrees of freedom for this test is 12.
A)True B)False
Q3) Ophelia O'Brien,VP of Consumer Credit of Credit First Banks (CFB),monitors the default rate on personal loans at the CFB member banks.One of her standards is "no more than 5% of personal loans should be in default." On each Friday,the default rate is calculated for a sample of 500 personal loans.Last Friday's sample contained 30 defaulted loans.Using \(\alpha\) = 0.01,critical chi-square value is ___.
A)6.63
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Chapter 17: Nonparametric Statistics
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Sample Questions
Q1) The Wilcoxon test was used on 18 pairs of data.The total of the ranks (T)were computed to be 111 (for + ranks)and 60 (for - ranks).The z value for this test is ___.
A)-1.11
B)-0.05
C)-0.07
D)0.033
E)2.22
Q2) In a Friedman test with 7 treatment levels and 5 blocks,df = ___.
A)16
B)34
C)4
D)35
E)6
Q3) The one-sample runs test is a nonparametric test for sequential independence.
A)True
B)False
Q4) Use the Kruskal-Wallis test to determine whether samples come from the same or different populations.
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Page 19
Chapter 18: Statistical Quality Control
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Sample Questions
Q1) Quality control can be undertaken in two distinct ways: after-process control and before-process control.
A)True
B)False
Q2) A quality circle studying the problem of incorrect prices on purchase orders identified several potential causes: incorrect information from requesting department,out-of-date catalogues from suppliers,defective computer software,and worker practices in the purchasing department.These potential cause-and-effect relationships are best illustrated by a ___.
A)check list
B)Pareto chart
C)control chart
D)point-and-figure chart
E)Fishbone diagram
Q3) If a process is in control,less than 0.3% of all the points that represent the process output such as the average measurement or the proportion defective should be beyond the upper and lower control limits.
A)True
B)False
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Page 20
Chapter 19: Decision Analysis
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Sample Questions
Q1) In a decision-making under uncertainty scenario,the best decision alternative based on the strategy of minmax regret will always have zero regret.
A)True
B)False
Q2) In a decision-making under risk scenario,the expected monetary value of a decision alternative is the arithmetic average of the payoffs to the decision alternative in each state of the nature.
A)True
B)False
Q3) A risk-avoider decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.
A)True B)False
Q4) Revise probabilities in light of sample information by using Bayesian analysis and calculating the expected value of sample information.
Q5) Make decisions under risk by constructing decision trees,calculating expected monetary value and expected value of perfect information,and analyzing utility.
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