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True or False: The Laspeyres price index has the disadvantage that the consumption

pattern in the initial period might be quite different from that in the current period and,

hence, does not reflect accurately the current consumption cost.

True or False: TABLE 17-12

The marketing manager for a nationally franchised lawn service company would like to

study the characteristics that differentiate home owners who do and do not have a lawn

service. A random sample of 30 home owners located in a suburban area near a large

city was selected; 15 did not have a lawn service (code 0) and 15 had a lawn service

(code 1). Additional information available concerning these 30 home owners includes

family income (Income, in thousands of dollars), lawn size (Lawn Size, in thousands of

square feet), attitude toward outdoor recreational activities (Attitude 0 = unfavorable, 1

= favorable), number of teenagers in the household (Teenager), and age of the head of

the household (Age).

The Minitab output is given below:

Referring to Table 17-12, there is not enough evidence to conclude that the model is not

a good-fitting model at a 0.05 level of significance.

True or False: TABLE 17-8

The superintendent of a school district wanted to predict the percentage of students

passing a sixth-grade proficiency test. She obtained the data on percentage of students

passing the proficiency test (% Passing), daily mean of the percentage of students

attending class (% Attendance), mean teacher salary in dollars (Salaries), and

instructional spending per pupil in dollars (Spending) of 47 schools in the state.

Following is the multiple regression output with Y = % Passing as the dependent

variable, X1 = % Attendance, X2 = Salaries and X3 = Spending:

Referring to Table 17-8, you can conclude that instructional spending per pupil has no

impact on the mean percentage of students passing the proficiency test, taking into

account the effect of all the other independent variables, at a 5% level of significance

using the 95% confidence interval estimate for Î²3.

True or False: A proper methodology in performing hypothesis tests is to ask whether a

random sample can be selected from the population of interest.

True or False: From the coefficient of multiple determination, you cannot detect the

strength of the relationship between Y and any individual independent variable.

TABLE 11-8

An important factor in selecting database software is the time required for a user to

learn how to use the system. To evaluate three potential brands (A, B and C) of database

software, a company designed a test involving five different employees. To reduce

variability due to differences among employees, each of the five employees is trained

on each of the three different brands. The amount of time (in hours) needed to learn

each of the three different brands is given below:

Below is the Excel output for the randomized block design:

True or False: Referring to Table 11-8, the randomized block F test is valid only if the

population of the amount of time needed is normally distributed for the 3 brands.

TABLE 16-13

Given below is the monthly time-series data for U.S. retail sales of building materials

over a specific year.

The results of the linear trend, quadratic trend, exponential trend, first-order

autoregressive, second-order autoregressive and third-order autoregressive model are

presented below in which the coded month for the 1st month is 0:

Linear trend model:

Quadratic trend model:

Exponential trend model:

First-order autoregressive:

Second-order autoregressive:

Third-order autoregressive:

Below is the residual plot of the various models:

True or False: Referring to Table 16-13, the best model based on the residual plots is the

linear-trend model.

True or False: The brand of TV one owns is an example of an ordinal scaled variable.

TABLE 12-6

According to an article in Marketing News, fewer checks are being written at the

grocery store checkout than in the past. To determine whether there is a difference in

the proportion of shoppers who pay by check among three consecutive years at a 0.05

level of significance, the results of a survey of 500 shoppers in three consecutive years

are obtained and presented below.

True or False: Referring to Table 12-6, there is sufficient evidence to conclude that the

proportions between year 2 and year 3 are different at a 0.05 level of significance.

The weight of a randomly selected cookie from a production line can most likely be

modeled by which of the following distributions?

A) Uniform distribution

B) Poisson distribution

C) Normal distribution

D) Exponential distribution

Referring to Table 14-4, when the builder used a simple linear regression model with

house size (House) as the dependent variable and family size (Size) as the independent

variable, he obtained an r2 value of 1.25%. What additional percentage of the total

variation in house size has been explained by including income in the multiple

regression?

TABLE 14-4

A real estate builder wishes to determine how house size (House) is influenced by

family income (Income) and family size (Size). House size is measured in hundreds of

square feet and income is measured in thousands of dollars. The builder randomly

selected 50 families and ran the multiple regression. Partial Microsoft Excel output is

provided below:

Also SSR (X1âˆ£ X2) = 36400.6326 and SSR (X2âˆ£ X1) = 3297.7917

A) 15.00%

B) 70.64%

C) 71.50%

D) 73.62%

Referring to Table 14-5, what is the p-value for Capital?

A) 0.01

B) 0.025

C) 0.05

D) None of the above.

A completely randomized design

A) has only one factor with several treatment groups.

B) can have more than one factor, each with several treatment groups.

C) has one factor and one block.

D) has one factor and one block and multiple values.

Which of the following is not one of Deming’s 14 points?

A) Belief in mass inspection.

B) Create constancy of purpose for improvement of product or service.

C) Adopt and institute leadership.

D) Drive out fear.

True or False: Given below is the scatter plot of the price/earnings ratio versus earnings

per share of 20 U.S. companies. There appears to be a positive relationship between

price/earnings ratio and earnings per share.

A major Blu-ray rental chain is considering opening a new store in an area that

currently does not have any such stores. The chain will open if there is evidence that

more than 5,000 of the 20,000 households in the area are equipped with Blu-ray

players. It conducts a telephone poll of 300 randomly selected households in the area

and finds that 96 have Blu-ray players. The p-value associated with the test statistic in

this problem is approximately equal to

A) 0.0100.

B) 0.0051.

C) 0.0026.

D) 0.0013.

TABLE 1-1

The manager of the customer service division of a major consumer electronics company

is interested in determining whether the customers who have purchased a Blu-ray

player made by the company over the past 12 months are satisfied with their products.

Referring to Table 1-1, the possible responses to the question “How would you rate the

quality of your purchase experience with 1 = excellent, 2 = good, 3 = decent, 4 = poor,

5 = terrible?” are values from a

A) discrete numerical variable.

B) continuous numerical variable.

C) categorical variable.

D) table of random numbers.

TABLE 17-8

The superintendent of a school district wanted to predict the percentage of students

passing a sixth-grade proficiency test. She obtained the data on percentage of students

passing the proficiency test (% Passing), daily mean of the percentage of students

attending class (% Attendance), mean teacher salary in dollars (Salaries), and

instructional spending per pupil in dollars (Spending) of 47 schools in the state.

Following is the multiple regression output with Y = % Passing as the dependent

variable, X1 = % Attendance, X2 = Salaries and X3 = Spending:

Referring to Table 17-8, which of the following is the correct alternative hypothesis to

test whether the daily mean of the percentage of students attending class has any effect

on the percentage of students passing the proficiency test, taking into account the effect

of all the other independent variables?

A) H1 : Î²0 â‰ 0

B) H1 : Î²1 â‰ 0

C) H1 : Î²2 â‰ 0

D) H1 : Î²3 â‰ 0

TABLE 15-3

A chemist employed by a pharmaceutical firm has developed a muscle relaxant. She

took a sample of 14 people suffering from extreme muscle constriction. She gave each a

vial containing a dose (X) of the drug and recorded the time to relief (Y) measured in

seconds for each. She fit a curvilinear model to this data. The results obtained by

Microsoft Excel follow

True or False: Referring to Table 15-3, suppose the chemist decides to use a t test to

determine if there is a significant difference between a linear model and a curvilinear

model that includes a linear term. If she used a level of significance of 0.05, she would

decide that the linear model is sufficient.

In a two-way ANOVA, the degrees of freedom for the “error” term is

A) (r – 1) (c – 1).

B) rc(n’ – 1).

C) (r – 1).

D) rcn’ + 1.

TABLE 19-1

The following payoff table shows profits associated with a set of 3 alternatives under 2

possible states of nature

Referring to Table 19-1, if the probability of S1 is 0.5, then the expected opportunity

loss (EOL) for A3 is

A) 3.

B) 4.5.

C) 7.

D) 8.

A population frame for a survey contains a listing of 72,345 names. Using a table of

random numbers, how many digits will the code numbers for each member of your

population contain?

A) 3

B) 4

C) 5

D) 6

Referring to Table 14-15, which of the following is the correct null

hypothesis to test whether mean teacher salary has any effect on

percentage of students passing the pro!ciency test, taking into

account the effect of instructional spending per pupil?

TABLE 14-15

The superintendent of a school district wanted to predict the

percentage of students passing a sixth-grade pro!ciency test. She

obtained the data on percentage of students passing the pro!ciency

test (% Passing), mean teacher salary in thousands of dollars

(Salaries), and instructional spending per pupil in thousands of dollars

(Spending) of 47 schools in the state.

Following is the multiple regression output with Y = % Passing as the

dependent variable, X1 = Salaries and X2 = Spending:

A) H0 : Î²0 = 0

B) H0 : Î²1 = 0

C) H0 : Î²2 = 0

D) H0 : Î²3 = 0

Suppose that past history shows that 60% of college students prefer Brand C cola. A

sample of 5 students is to be selected. The probability that exactly 3 prefer brand C is

________.

If the Durbin-Watson statistic has a value close to 0, which assumption is violated?

A) Normality of the errors

B) Independence of errors

C) Homoscedasticity

D) None of the above

The employees of a company were surveyed on questions regarding their educational

background (college degree or no college degree) and marital status (single or married).

Of the 600 employees, 400 had college degrees, 100 were single, and 60 were single

college graduates. The probability that an employee of the company does not have a

college degree is

A) 0.10.

B) 0.33.

C) 0.67.

D) 0.75.

An economist is interested in studying the incomes of consumers in a particular country.

The population standard deviation is known to be $1,000. A random sample of 50

individuals resulted in a mean income of $15,000. What total sample size would the

economist need to use for a 95% confidence interval if the width of the interval should

not be more than $100?

A) n = 1537

B) n = 385

C) n = 40

D) n = 20

A wheel spinning game is played with a special wheel with 24 equal segments that

determine the dollar values of a single spin. Which of the following distributions can

best be used to compute the probability of winning a specific dollar value in a single

spin?

A) Uniform distribution

B) Binomial distribution

C) Normal distribution

D) Exponential distribution

TABLE 19-1

The following payoff table shows profits associated with a set of 3 alternatives under 2

possible states of nature

Referring to Table 19-1, if the probability of S1 is 0.2, what is the optimal alternative

using EOL?

A) A1

B) A2

C) A3

D) It cannot be determined.

TABLE 12-15

Two new different models of compact SUVs have just arrived at the market. You are

interested in comparing the gas mileage performance of both models to see if they are

the same. A partial computer output for twelve compact SUVs of model 1 and thirteen

of model 2 is given below:

You are told that the gas mileage population distributions for both models are not

normally distributed.

Referring to Table 12-15, what is the standard deviation of the Wilcoxon rank sum test

statistic T1?

TABLE 10-6

To investigate the efficacy of a diet, a random sample of 16 male patients is selected

from a population of adult males using the diet. The weight of each individual in the

sample is taken at the start of the diet and at a medical follow-up 4 weeks later.

Assuming that the population of differences in weight before versus after the diet

follow a normal distribution, the t-test for related samples can be used to determine if

there was a significant decrease in the mean weight during this period. Suppose the

mean decrease in weights over all 16 subjects in the study is 3.0 pounds with the

standard deviation of differences computed as 6.0 pounds.

Referring to Table 10-6, the p-value for a one-tail test is ________.

You were told that the mean score on a statistics exam is 75 with the scores normally

distributed. In addition, you know the probability of a score between 55 and 60 is

4.41% and that the probability of a score greater than 90 is 6.68%. The middle 95.46%

of the students will score between which two scores?

TABLE 5-8

Two different designs on a new line of winter jackets for the coming winter are

available for your manufacturing plants. Your profit (in thousands of dollars) will

depend on the taste of the consumers when winter arrives. The probability of the three

possible different tastes of the consumers and the corresponding profits are presented in

the following table.

Referring to Table 5-8, what is your expected profit when Design A is chosen?

The rate of return for a stock over a three-year period is 0.527, 0.145, and 0.684. The

geometric mean rate of return is ________.

TABLE 13-4

The managers of a brokerage firm are interested in finding out if the number of new

clients a broker brings into the firm affects the sales generated by the broker. They

sample 12 brokers and determine the number of new clients they have enrolled in the

last year and their sales amounts in thousands of dollars. These data are presented in the

table that follows.

Referring to Table 13-4, suppose the managers of the brokerage firm want to construct a

99% confidence interval estimate for the mean sales made by brokers who have brought

into the firm 24 new clients. The t critical value they would use is ________.

TABLE 5-9

A major hotel chain keeps a record of the number of mishandled bags per 1,000

customers. In a recent year, the hotel chain had 4.06 mishandled bags per 1,000

customers. Assume that the number of mishandled bags has a Poisson distribution.

Referring to Table 5-9, what is the probability that in the next 1,000 customers, the

hotel chain will have less than two and more than eight mishandled bags?