Statistics for Business and Economics
Final Test Solutions
Course Introduction
Statistics for Business and Economics introduces students to the fundamental concepts and methodologies of statistical analysis as applied to real-world problems in business and economics. The course covers topics such as descriptive statistics, probability distributions, sampling methods, hypothesis testing, regression analysis, and decision-making under uncertainty. Emphasis is placed on interpreting data, drawing valid conclusions, and effectively communicating statistical findings to support business and economic decision-making. Students will also gain experience with statistical software and data analysis tools commonly used in professional settings.
Recommended Textbook Business Statistics A Decision Making Approach 8th Edition by David F. Groebner
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19 Chapters
2260 Verified Questions
2260 Flashcards
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Page 2
Chapter 1: The Where, why, and How of Data Collection
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) The Georgia Company,a pharmaceutical company,recently conducted a study in which 20 people were given a new drug and 20 other people were given a placebo.The objective was to determine whether there was a difference in pain relief between those using the new drug versus those using the placebo.The data collection used here is an example of an experiment.
A)True
B)False
Answer: True
Q2) Another term used for statistical sampling is:
A)probability sampling.
B)convenience sampling.
C)ratio sampling.
D)numerical sampling.
Answer: A
Q3) Stratified random sampling is the same thing as simple random sampling. A)True
B)False
Answer: False
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3
Chapter 2: Graphs,charts and Tablesdescribing Your Data
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) Scatter diagrams can be used for either quantitative or qualitative data.
A)True
B)False
Answer: False
Q2) Which of the following can NOT be shown effectively with a histogram?
A)A frequency distribution
B)A joint frequency distribution
C)A relative frequency distribution
D)The center,shape and spread of a distribution
Answer: B
Q3) Roscoe and Associates makes computer software for use in the telecommunications industry.Recently,managers at the company collected data for the year 2001 on three variables: total dollars spent on research and development,total sales dollars,and total employee salaries.To graphically present these three variables,the managers would be justified in using a line chart with all three variables plotted.
A)True
B)False
Answer: False
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4
Chapter 3: Describing Data Using Numerical Measures
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130 Flashcards
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Sample Questions
Q1) Based on the empirical rule we can expect about 95 percent of the values in bell-shaped distribution to be within one standard deviation of the mean.
A)True
B)False
Answer: False
Q2) The right and left edges of the box in a box and whisker plot represent the 3<sup>rd</sup> and 1<sup>st</sup> quartiles,respectively.
A)True
B)False
Answer: True
Q3) The distribution of dollars paid for car insurance by car owners in a major east coast city is bell-shaped with a mean equal to $750 every six months and a standard deviation equal to $100.Based on this information we can use Tchebysheff's theorem to determine the conservative percentage of car owners that will pay between $550 and $950 for car insurance.
A)True
B)False
Answer: False
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Chapter 4: Using Probability and Probability Distributions
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77 Flashcards
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Sample Questions
Q1) Suppose 10 students are enrolled in a class and the probability of at least 8 showing up on a given day is 90 percent.Then the probability of 7 or fewer showing that day is 10 percent.
A)True
B)False
Q2) If a single die is rolled (a cube where the sides are numbered 1 through 6),the probability of rolling at least a 3 is 0.33.
A)True
B)False
Q3) Two football teams play in the Super Bowl.The event of team A winning and the event of team B winning can be said to be mutually exclusive.
A)True
B)False
Q4) Suppose a player is dealt 2 cards from a standard deck of 52 playing cards.To determine the probability of having a blackjack would involve classical probability.
A)True
B)False
Q5) Explain what is meant by the term mutually exclusive events.Cite an example.
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Chapter 5: Discrete Probability Distributions
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119 Flashcards
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Sample Questions
Q1) When using the binomial distribution,the maximum possible number of success is the number of trials.
A)True
B)False
Q2) Explain how to use the binomial distribution table when p,the probability of a success,exceeds 0.50.
Q3) The Nationwide Motel Company has determined that 70 percent of all calls for motel reservations request nonsmoking rooms.Recently,the customer service manager for the company randomly selected 25 calls.Assuming that the distribution of calls requesting nonsmoking rooms is described by a binomial distribution,the expected number of requests for nonsmoking rooms is 14.
A)True
B)False
Q4) A probability distribution with an expected value greater than the expected value of a second probability distribution will also have a higher standard deviation.
A)True
B)False
Q5) Explain what the expected value of a discrete random variable measures.
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Chapter 6: Introduction to Continuous Probability
Distributions
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) Which of the following is not a characteristic of the normal distribution?
A)Symmetric
B)Mean=median=mode
C)Bell-shaped
D)Equal probabilities at all values of x
Q2) An electronics repair shop has determined that the time between failures for a particular electronic component part is exponentially distributed with a mean time between failures of 200 hours.Based on this information,the probability that a part will not fail in the first 200 hours is 0.50.
A)True
B)False
Q3) A continuous random variable approaches normality as the level of skewness increases.
A)True
B)False
Q4) Any normal distribution can be converted to a standard normal distribution.
A)True
B)False
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Q5) What is the difference between a normal distribution and the standard normal distribution?
Chapter 7: Introduction to Sampling Distributions
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) A major textbook publisher has a contract with a printing company.Part of the contract stipulates that no more than 5 percent of the pages should have any type of printing error.Suppose that the company selects a random sample of 400 pages and finds 33 that have an error.If the printer is meeting the standard,what is the probability that a sample would have 33 or more errors?
A)0.1245
B)0.4986
C)0.0014
D)0.1250
Q2) The Dilmart Company has 8,000 parts in inventory.The mean dollar value of these parts is $10.79 with a standard deviation equal to $3.34.Suppose the inventory manager selected a random sample of n = 64 parts from the inventory and found a sample mean equal to $11.27.The probability of getting a sample mean at least as large as $11.27 is approximately 0.444.
A)True
B)False
Q3) An increase in sample size will tend to result in less sampling error.
A)True
B)False
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Page 9
Chapter 8: Estimating Single Population Parameters
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) An animal shelter wants to estimate the mean number of animals housed daily and they know the standard deviation.If they want to find a 98 percent confidence interval the critical value to use is:
A)1.645.
B)1.98.
C)2.33.
D)2.575.
Q2) In a recent report to the supply chain manager in a major electronics company,the report writer stated that with 90 percent confidence,the manufacturing lead time for a critical part is between 3.34 hours and 4.14 hours.Based on this information,the margin of error for this estimate is ± .80 hours.
A)True
B)False
Q3) When calculating a confidence interval,the reason for using the t-distribution rather than the normal distribution for the critical value is that the population standard deviation is unknown.
A)True
B)False
Q4) Under what circumstances would you wish to select a pilot sample?
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Chapter 9: Introduction to Hypothesis Testing
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129 Flashcards
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Sample Questions
Q1) Which of the following would be an appropriate null hypothesis?
A)The mean of a population is equal to 55.
B)The mean of a sample is equal to 55.
C)The mean of a population is greater than 55
D)The mean of a sample is equal to 55
Q2) A sample is used to obtain a 95 percent confidence interval for the mean of a population.The confidence interval goes from 15 to 19.If the same sample had been used to test the null hypothesis that the mean of the population is equal to 20 versus the alternative hypothesis that the mean of the population differs from 20,the null hypothesis could be rejected at a level of significance of 0.05.
A)True
B)False
Q3) Type II errors are typically greater for two-tailed hypothesis tests than for one-tailed tests.
A)True
B)False
Q4) Explain why an increase in sample size will reduce the probability of a Type II error but will not impact the probability of a Type I error.
Q5) What is meant by the terms Type I and Type II statistical error?
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Chapter 10: Estimation and Hypothesis Testing for Two Population Parameters
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) When estimating the difference between two population means,when should the normal distribution be used and when should the t-distribution be used?
Q2) If a manager wishes to develop a confidence interval estimate for estimating the difference between two population means,an increase in the size of the samples used will result in:
A)an increase in the size of the critical value.
B)a wider confidence interval.
C)a more precise confidence interval.
D)a less precise confidence interval
Q3) If the point estimate in a paired difference estimation example does not fall in the resulting confidence interval,the decision maker can conclude that the two populations likely have different means.
A)True
B)False
Q4) To test whether Model A and Model B cars have the same MPG,the first step is to select two independent random samples of drivers and assign one of them to drive Model A and the other Model B.
A)True
B)False
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Chapter 11: Hypothesis Tests and Estimation for Population
Variances
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) In a two-tailed hypothesis test involving two population variances,if the null hypothesis is true then the F-test statistic should be approximately equal to 1.0.
A)True B)False
Q2) In a two-tailed hypothesis test for the difference between two population variances,the test statistic is an F-ratio formed by putting the largest sample variance in numerator.
A)True B)False
Q3) If a one-tailed F-test is employed when testing a null hypothesis about two population variances,the test statistic is an F-value formed by taking the ratio of the two sample variances so that the sample variance predicted to be larger is placed in the numerator.
A)True B)False
Q4) The F-distribution can only have positive values.
A)True B)False
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Chapter 12: Analysis of Variance
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) In a one-way ANOVA,which of the following is true?
A)The degrees of freedom associated with the between sum of squares is equal to one less than the number of populations.
B)The critical value will be an F-value from the F distribution.
C)If the null hypothesis is rejected,it may still be possible that two or more of the population means are equal.
D)All of the above.
Q2) Analysis of variance can only be done for fixed effects.
A)True
B)False
Q3) Six food critics each visited and rated four different restaurants.Each critic visited each restaurant on three separate occasions and recorded a score for each visit.The total number of degrees of freedom is 71.
A)True
B)False
Q4) Interaction is the term that is used in a two-factor ANOVA design when the two factors have different means.
A)True
B)False
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Chapter 13: Goodness-Of-Fit Tests and Contingency Analysis
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) In a goodness-of-fit test,when the null hypothesis is true,the expected value for the chi-square test statistic is zero.
A)True
B)False
Q2) The degrees of freedom for a contingency table with 11 rows and 10 columns is A)11.
B)10.
C)110.
D)90.
Q3) When the expected cell frequencies are smaller than 5,the cells should be combined in a meaningful way such that the expected cell frequencies do exceed 5.
A)True
B)False
Q4) A goodness-of-fit test can decide whether a set of data comes from a specific hypothesized distribution.
A)True
B)False
Q5) Explain the basic logic behind the chi-square goodness-of-fit test.
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Chapter 14: Introduction to Linear Regression and Correlation Analysis
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Recently,an automobile insurance company performed a study of a random sample of 15 of its customers to determine if there is a positive relationship between the number of miles driven and the age of the driver.The sample correlation coefficient is r = .38.Given this information,which of the following is appropriate critical value for testing the null hypothesis at an alpha = .05 level?
A)t = 2.6104
B)t = 1.7613
C)t = 1.7531
D)t = 1.7709
Q2) Given a sample of size n = 15 and a sample correlation of r = 0.7,the value of the test statistic for conducting a hypothesis test of the correlation is t = 3.53.
A)True
B)False
Q3) The difference between a scatter plot and a scatter diagram is that the scatter plot has the independent variable on the x-axis while the independent variable is on the Y-axis in a scatter diagram.
A)True
B)False
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Chapter 15: Multiple Regression Analysis and Model Building
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) In a multiple regression model,which of the following is true?
A)The coefficient of determination will be equal to the square of the highest correlation in the correlation matrix.
B)Adding variables that have a low correlation with the dependent variable will cause the R-square value to decline.
C)The sum of the residuals computed for the least squares regression equation will be zero.
D)The adjusted R-square might be higher or lower than the value of the R-square.
Q2) You should not include more than one categorical variable in a multiple regression because the use of two or more will cause misleading results.
A)True
B)False
Q3) In multiple regression analysis,the model will be developed with one dependent variable and two or more independent variables.
A)True
B)False
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17
Chapter 16: Analyzing and Forecasting Time-Series Data
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133 Flashcards
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Sample Questions
Q1) Which of the following is true about deseasonalizing data?
A)The sum of the seasonal indexes should be 1.0.
B)The time series is deseasonalized by multiplying each value by its seasonal index.
C)Deseasonalizing a time series reduces autocorrelation.
D)Deseasonalizing a time series can make it easier to see a trend.
Q2) A seasonally unadjusted forecast is one that is made from seasonal data without any adjustment for the seasonal component in the time series.
A)True
B)False
Q3) Which of the following approaches might be used to determine which value for the smoothing constant to use in a single exponential smoothing model?
A)Select the value that produces the smallest MAD value
B)Select the value that maximizes the MSE
C)Use the value that gives the largest MAD value
D)Use the value that smoothes the data the most
Q4) Two common unweighted indexes are the Paasche Index and the Laspeyres Index.
A)True
B)False
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Page 18
Chapter 17: Introduction to Nonparametric Statistics
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Sample Questions
Q1) The Wilcoxon matched-pairs signed rank test assumes that the two samples are:
A)equal in size.
B)independent and random.
C)paired.
D)Both A and C
Q2) If you are interested in testing whether the median of a population is equal to a specific value,an appropriate test to use is:
A)the Mann-Whitney U test.
B)the t-test.
C)the Wilcoxon signed rank test.
D)the Wilcoxon Matched-Pairs Signed Rank test.
Q3) The Mann-Whitney U test assumes that the 2 samples are:
A)equal in size.
B)independent and random.
C)matched or paired.
D)normally distributed.
Q4) Under what conditions should a decision maker use a nonparametric statistical procedure?
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19
Chapter 18: Introduction to Quality and Statistical Process Control
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Sample Questions
Q1) Process control charts are used to provide signals to indicate when the output of a process is out of control.
A)True
B)False
Q2) The six most common sources of variation are people,machines,materials,methods,measurement,and environment.
A)True
B)False
Q3) Which of the following is not true?
A)In the 1950s and 1960s Japanese products were of higher quality than U.S.products.
B)Following World War II there was so much pent-up demand that U.S.manufacturers focused on quantity rather than quality.
C)By the early 1970s Japanese products began to exceed U.S.products in terms of quality.
D)By the early 1980s U.S.manufacturers began to realize that quality was important.
Q4) Explain the relationship between control limits and specification limits.
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Chapter 19: Introduction to Decision Analysis
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Sample Questions
Q1) Which of the following is a probabilistic decision criterion?
A)Maximax
B)Maximin
C)Minimax regret
D)Expected value
Q2) Decision analysis is essential for all business decisions.
A)True
B)False
Q3) Which of the following is true?
A)Maximax and maximin always lead to the same decision.
B)Maximax and maximin always lead to different decisions.
C)Minimax regret and maximin are essentially the same.
D)Maximax and maximin may or may not lead to the same decision.
Q4) The maximin criterion is an optimistic decision criterion.
A)True
B)False
Q5) Decision trees are helpful in visually structuring the problem and seeing all the possible sequences of events.
A)True
B)False
21
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