Business Statistics: Part III: Inference for Decision Making – Test B
Name___________________________________________________
Chapter 10: Make conclusions based on a confidence interval and significance level.
1. After computing a confidence interval, the investigator believes that the results are
meaningless because the width of the interval is too large. In reconstructing the interval,
the investigator should
A. decrease the sample size
B. increase the level of confidence
C. increase the sample size
D. reduce the population variance
E. none of the above
Chapter 10: Understand errors in hypothesis tests.
2. A type II error is committed when
A. we don’t reject a null hypothesis that is true.
B. we reject a null hypothesis that is false.
C. we reject a null hypothesis that is true.
D. we don’t reject a null hypothesis that is false.
E. none of the above
Chapter 13: Determine whether two samples are independent or paired.
3. Shape-Up-By-Susie claims that participating in her exercise program will result in
guaranteed weight loss in just 6 weeks. Five clients weighed themselves before and then
again after participating in her program and the differences “weight after – weight
before” were analyzed. Based on the relevant computer output shown below, we can say
Paired T for After – Before
N Mean StDev SE Mean
After 5 144.6 31.7 14.2
Before 5 148.0 28.9 12.9
Difference 5 -3.40 3.51 1.57
95% upper bound for mean difference: -0.06
T-Test of mean difference = 0 (vs < 0): T-Value = -2.17 P-Value = 0.048
A. This is a paired design.
B. This is a two tailed test.
C. This is one tailed test.
D. Both A and B.
E. Both A and C.
IIIB-2 Part III: Inference for Decision Making
Chapter 13: Determine and perform the appropriate t‐test.
4. Shape-Up-By-Susie claims that participating in her exercise program will result in
guaranteed weight loss in just 6 weeks. Five clients weighed themselves before and then
again after participating in her program and the differences “weight after – weight
before” were analyzed. The relevant output is shown below. At the 0.05 level of
significance, the correct conclusion is
Paired T for After – Before
N Mean StDev SE Mean
After 5 144.6 31.7 14.2
Before 5 148.0 28.9 12.9
Difference 5 -3.40 3.51 1.57
95% upper bound for mean difference: -0.06
T-Test of mean difference = 0 (vs < 0): T-Value = -2.17 P-Value = 0.048
A. Reject the null hypothesis.
B. Do not reject the null hypothesis.
C. Susie’s claim is supported by the sample evidence.
D. Both A and C.
E. Both B and C.
Chapter 12: Identify and understand Type I errors, Type II errors, and the power of a test.
5. A contact lens wearer read that the producer of a new contact lens boasts that their
lenses are cheaper than contact lenses from another popular company. The null
hypothesis 0:0
old new
H
μμ
−= is tested against the alternative : 0
Aold new
H
μμ
−>. Which
of the following would be a Type II error?
A. Deciding that the new lenses are cheaper, when in fact they really are.
B. Deciding that the new lenses are cheaper, when in fact they are not.
C. Deciding that the new lenses are not really cheaper, when in fact they are.
D. Deciding that the new lenses are not really cheaper, when in fact they are not.
E. It does not matter.
Chapter 13: Determine and perform the appropriate t‐test.
6. Which of the following is not an assumption or condition that needs to be checked for
a two-sample t-test for the difference between two means?
A. Independent Groups
B. Randomization
C. 10% Condition
D. Nearly Normal Condition
E. All of the above must be checked.
Test B IIIB–3
Chapter 14: Perform tests for goodness‐of‐fit, homogeneity, or independence.
7. A local politician was interested in determining whether income level affects opinion
regarding the government’s bailout bill for easing the 2008 financial crisis on Wall Street.
He surveyed a sample of his constituents and got the following results. The correct null
hypothesis to be tested is
Opinion
Income Level Favor Oppose
> $ 200,000 38 29
$ 50,000 to $ 200,000 30 42
< $50,000 32 59
A. There is no relationship between income level and opinion.
B. There is a relationship between income level and opinion.
C. Opinion and income level are independent.
D. Both A and C
E. Both B and C
Chapter 14: Perform tests for goodness‐of‐fit, homogeneity, or independence.
8. A local politician was interested in determining whether income level affects opinion
regarding the government’s bailout bill for easing the 2008 financial crisis on Wall Street.
He surveyed a sample of his constituents and got the following results. The calculated
value of the Chi Square statistic is
Opinion
Income Level Favor Oppose
> $ 200,000 38 29
$ 50,000 to $ 200,000 30 42
< $50,000 32 59
A. 7.433
B. 29.13
C. 40.70
D. 5.999
E. 2.347
Chapter 14: Perform tests for goodness‐of‐fit, homogeneity, or independence.
9. A local politician was interested in determining whether income level affects opinion
regarding the government’s bailout bill for easing the 2008 financial crisis on Wall Street.
He surveyed a sample of his constituents and performed a Chi-square test. The resulting
P-value was 0.024. At the 0.01 level of significance, he should conclude that
A. Income level affects opinion.
B. There is a relationship between income level and opinion.
C. Opinion and income level are independent.
D. Reject the null hypothesis.
E. Both B and D.
IIIB-4 Part III: Inference for Decision Making
Chapter 11: Determine sample sizes.
10. A human resources manager at a large company wants to estimate the proportion of
employees that would be interested in reimbursement for college courses. If she wishes
to be 95% confident that her estimate is within 5% of the true proportion, how many
employees would need to be sampled?
A. 271
B. 385
C. 543
D. 646
E. 1234
Chapter 10: Make conclusions based on a confidence interval and significance level.
11. In economic downturns, companies attempt to downsize their workforces by offering
early retirement incentives to older employees. A survey of 723 companies found that
195 engage in such downsizing practices. The 99% confidence interval for the
proportion of companies that downsize their workforces by offering early retirement
incentives is
A. 0.19 to 0.35
B. 0.65 to 0.81
C. 0.19 to 0.47
D. 0.69 to 0.77
E. 0.23 to 0.31
Chapter 12: Identify and understand Type I errors, Type II errors, and the power of a test.
12. Which factor listed below does not affect the power of a test?
A. Sample size
B. Standard deviation
C. Significance level
D. One-sided versus two-sided tests
E. All of the above
Chapter 13: Perform a pooled t‐test.
13. You should use a pooled t-test versus a non-pooled t-test when
A. the samples are matched.
B. the variance of the two populations are equal.
C. the sample sizes of both groups are the same.
D. None of the above.
E. A and C.
Test B IIIB–5
Chapter 14: Choose the best type of test.
14. A real estate agency, located in a metropolitan area in the northeastern U.S., kept
data on the various types of properties purchased in the area. Historically, 15% of
purchases were for condominiums, 30% were for townhouses, 40% for single family
homes, 10% for commercial properties and 5% for land. With changing demographics,
the agency wondered if the current distribution matches the historical distribution.
Recent data showed the following:
Type of Property Condos Townhouses Homes Commercial Land
Frequency 89 121 78 25 12
Which Chi-square test is most appropriate for this situation?
A. Goodness of Fit
B. Homogeneity
C. Independence
D. Proportional
E. None of the above.
Chapter 14: Perform tests for goodness‐of‐fit, homogeneity, or independence.
15. A real estate agency, located in a metropolitan area in the northeastern U.S., kept data
on the various types of properties purchased in the area. Historically, 15% of purchases
were for condominiums, 30% were for townhouses, 40% for single family homes, 10%
for commercial properties and 5% for land. With changing demographics, the agency
wondered if the current distribution matches the historical distribution. Recent data
showed the following:
Type of Property Condos Townhouses Homes Commercial Land
Frequency 89 121 78 25 12
The value of the Chi-square test statistic is
A. χ 2 = 5.993
B. χ 2 = 62.538
C. χ 2 = 101.482
D. χ 2 = 77.431
E. χ 2 = 8.101
IIIB-6 Part III: Inference for Decision Making
Chapter 14: Analyze conclusions using standardized residuals.
16. A real estate agency, located in a metropolitan area in the northeastern U.S., kept data
on the various types of properties purchased in the area. Historically, 15% of purchases
were for condominiums, 30% were for townhouses, 40% for single family homes, 10%
for commercial properties and 5% for land. With changing demographics, the agency
wondered if the current distribution matches the historical distribution. Recent data
showed the following:
Type of Property Condos Townhouses Homes Commercial Land
Frequency 89 121 78 25 12
What is the standardized residual associated with Townhouses?
A. 23.5
B. 4.85
C. 10.86
D. 2.38
E. Not enough information given to calculate.
Chapter 14: Analyze conclusions using standardized residuals.
17. A real estate agency, located in a metropolitan area in the northeastern U.S., kept data
on the various types of properties purchased in the area. Historically, 15% of purchases
were for condominiums, 30% were for townhouses, 40% for single family homes, 10%
for commercial properties and 5% for land. Based on the data shown below, the null
hypothesis was rejected and the agency concluded that the current distribution of property
sales differs from the historical distribution. Based on an examination of the standardized
residuals, which type of property had the most impact on the test results?
Type of Property Condos Townhouses Homes Commercial Land
Frequency 89 121 78 25 12
A. Condos
B. Townhouses
C. Homes
D. Commercial
E. Land
Test B IIIB–7
Chapter 13: Determine whether two samples are independent or paired.
18. Data were collected on annual personal time (in hours) taken by a random sample of
16 women and 7 men employed by a medium sized company. The women took an
average of 24.75 hours of personal time per year with a standard deviation of 2.84 hours.
The men took an average of 21.89 hours of personal time per year with a standard
deviation of 3.29 hours. The Human Resources Department believes that women tend to
take more personal time than men because they tend to be the primary child care givers in
the family. The t-test for two means is appropriate in this situation because
A. women and men are dependent samples.
B. women and men are independent samples.
C. women and men are matched samples.
D. the observations are paired.
E. None of the above.
Chapter 13: Determine whether two samples are independent or paired.
19. An army depot that overhauls ground mobile radar systems is interested in improving
its processes. One problem involves troubleshooting a particular component that has a
high failure rate after it has been repaired and reinstalled in the system. The shop floor
supervisor believes that having standard work procedures in place will reduce the time
required for troubleshooting this component. Time (in minutes) required troubleshooting
this component without and with the standard work procedure is recorded for a sample of
19 employees. In order to determine if having a standard work procedure in place
reduces troubleshooting time, they should use
A. a one-tailed paired t-test.
B. a two-tailed test of two independent means.
C. a one-tailed test of two independent means.
D. a two-tailed paired t-test.
E. a test of two proportions.
Chapter 13: Determine and perform the appropriate t‐test.
20. An army depot that overhauls ground mobile radar systems is interested in improving
its processes. One problem involves troubleshooting a particular component that has a
high failure rate after it has been repaired and reinstalled in the system. The shop floor
supervisor believes that having standard work procedures in place will reduce the time
required for troubleshooting this component. Time (in minutes) required troubleshooting
this component without and with the standard work procedure is recorded for a sample of
19 employees. Assuming that we define our differences as Time without standard work
procedure – Time with standard work procedure, the correct alternative hypothesis is
A. µd = 0.
B. µd < 0.
C. µd > 0.
D. µd ≠ 0.
E. None of the above.
IIIB-8 Part III: Inference for Decision Making
Business Statistics: Part III: Inference for Decision Making – Test B- Key