Ch07-Solns-All Skuce 2e

Instructors Solutions Manual - Chapter 7
Chapter 7 Solutions

Develop Your Skills 7.1
1. a. H
0
: p = 0.05
H
1
: p < 0.05
b. A Type I error arises when we mistakenly reject the null hypothesis when it is in
fact true. This would correspond to accepting a shipment of keyboards when 5%
or more of them were defective.
A Type II error arises when we mistakenly fail to reject the null hypothesis when
it is in fact false. This would correspond to refusing to accept a shipment of
keyboards that actually had fewer than 5% defective.
c. From the manufacturers point of view, Type I error is probably more important,
because it would lead to using more faulty keyboards than desired. This would
likely lead to customer complaints, and might hurt the companys quality
reputation.
d. From the suppliers point of view, the Type II error would be more frustrating,
because a shipment that should have been accepted was returned.

2. a. H
0
: = 15 minutes
H
1
: < 15 minutes
fact true. This would correspond to concluding that the new pain reliever
provided quicker pain relief than the old formula, when in fact it didnt.
it is in fact false. This would correspond to concluding that the new pain
reliever did not provide quicker pain relief than the old formula, when in fact it
did.
c. If the company reported that it rejected the null hypothesis at a 10% significance
level, I would not be inclined to switch to the new drug (although I would like to
know the p-value to make my final decision). Such a high level of significance
makes it easy to reject the null, and so there is a higher chance that it is in fact
true.
d. A p-value of 1% tells me the sample result would have occurred with a
probability of only 1%, if the null hypothesis were true. This is very unlikely,
yet it occurred. With such a result, there is strong evidence that the new pain
reliever provides quicker relief than the old formula.

3. a. H
0
: = 142 ml
H
1
: 142 ml
This should be a two-tailed test. Both underfilled and overfilled cans of peaches
present problems.
fact true. This would correspond to concluding the wrong amount of peaches
was going into the cans, and making some adjustments, when in fact everything
was fine, and no adjustments were necessary.
Copyright 2011 Pearson Canada Inc. 129
it is in fact false. This would correspond to concluding that the right amount of
peaches were going into the cans, and making no adjustments, when in fact the
cans were being either underfilled or overfilled, and some adjustment was
necessary.
c. If I were a consumer the underfilled cans would be most important to me! Type
II errors are more important, particularly if they led to underfilled cans of
peaches. This could also be a consequence of Type I errors.

4. np = 500(0.35) = 175
nq = 500(1=0.35) = 325
Both are > 10, so the sampling distribution of will be approximately normal.
Although sampling is done without replacement, we are told the sample is less than
5% of the population.
p

p = 0.36
This is a right-tailed test. To get the p-value, calculate P(sample statistic > observed
sample result).

3192 . 0
6908 . 0 1
) 47 . 0 z ( P
500
) 65 . 0 )( 35 . 0 (
35 . 0 36 . 0
z P
) 36 . 0 p ( P
=
=
> =
|
|
|
|
|
.
|
\
|
> =
>

The p-value is 0.3192.

5. This is now a two-tailed test, so the p-value = 2 0.3192 = 0.6384.

6. H
0
: p = 0.25
H
1
: p > 0.25
= 0.05
= 0.27 p
n = 1006
Sampling is done without replacement. The population is Canadian homeowners, of
which there are millions, so the sample of 1006 is less than 5% of the population.
np = 1006(0.25) = 251.5
nq = 1006(1 0.25) = 754.5
Both are > 10, so the sampling distribution of will be approximately normal, with a
mean of 0.25, and a standard error of
p
013652169 . 0
1006
) 75 . 0 )( 25 . 0 (
n
pq
p
= = = o .

0721 . 0
9279 . 0 1
) 46 . 1 z ( P
1006
) 75 . 0 )( 25 . 0 (
25 . 0 27 . 0
z P
) 27 . 0 p ( P
=
=
> =
|
|
|
|
|
.
|
\
|
> =
>

p-value = 0.0721 > = 0.05
We fail to reject H
0
. There is insufficient evidence to infer that more than a quarter
of homeowners spend more than they planned on home renovation projects.

7. H
0
: p = 0.3333
H
1
: p > 0.3333
= 0.02
= 0.34 p
n = 1006
Sampling is done without replacement. The population is Canadian homeowners, of
which there are millions, so the sample of 1006 is less than 5% of the population.
np = 1006(0.25) = 251.5
nq = 1006(1 0.25) = 754.5
p
014862599 . 0
1006
) 6667 . 0 )( 3333 . 0 (
n
pq
p
= = = o .

3264 . 0
6736 . 0 1
) 45 . 0 z ( P
1006
) 6667 . 0 )( 3333 . 0 (
3333 . 0 34 . 0
z P
) 34 . 0 p ( P
=
=
> =
|
|
|
|
|
.
|
\
|
> =
>

p-value = 0.3264 > = 0.02
We fail to reject H
0
. There is insufficient evidence to infer that more than a third of
homeowners borrow to renovate.

8. H
0
: p = 0.15
H
1
: p > 0.15
= 0.04
= 0.17 p
n = 1403
Sampling is done without replacement. However, there are probably millions of
Canadian cell phone users, so the sample is not more than 5% of the population.
np = 1403(0.15) = 210.45
nq = 1403(1 0.15) = 1192.55
p
009533 . 0
1403
) 85 . 0 )( 15 . 0 (
= = =
n
pq
p
o

0179 . 0
9821 . 0 1
) 10 . 2 (
1403
) 85 . 0 )( 15 . 0 (
15 . 0 17 . 0
) 17 . 0 (
=
=
> =
|
|
|
|
.
|
\
|
> =
>
z P
z P
p P

p-value = 0.0179 < = 0.04
We reject H
0
. There is sufficient evidence to infer that more than 15% of all
Canadian cellphone and smartphone users typically access the internet on a daily
basis from their phones.

9. H
0
: p = 0.10
H
1
: p < 0.10
= 0.05
= 18/200 = 0.09 p
n = 200
Sampling is done without replacement. We have no information about the total
number of customers in the store, but presumably it would be thousands, so the
sample of 200 is not more than 5% of the population.
np = 200(0.10) = 20
nq = 200(1 0.10) = 180
p
02123203 . 0
200
) 9 . 0 )( 1 . 0 (
n
pq
p
= = = o

3192 . 0
) 47 . 0 z ( P
200
) 9 . 0 )( 1 . 0 (
10 . 0 09 . 0
z P
) 09 . 0 p ( P
=
s =
|
|
|
|
|
.
|
\
|
s =
s

p-value = 0.3192 > = 0.05
We fail to reject H
0
. There is insufficient evidence to infer that fewer than 10% of
customers opt for the extended warranty coverage.

10. H
0
: p = 0.25
H
1
: p > 0.25
= 0.04
= 14/50 = 0.28 p
n = 50
Sampling is done without replacement. We have no information about the total
number of customers in the diner. As long as the diner has at least 1000 customers,
the sample of 50 would be not more than 5% of the population.
np = 50(0.25) = 12.5
nq = 50(1 0.25) = 37.5
Since np and nq are both, the sampling distribution of will be approximately
normal, with a mean of 12.5 and a standard error of
p
061237244 . 0
50
) 75 . 0 )( 25 . 0 (
n
pq
p
= = = o

3121 . 0
6879 . 0 1
) 49 . 0 z ( P
50
) 75 . 0 )( 25 . 0 (
25 . 0 28 . 0
z P
) 28 . 0 p ( P
=
=
> =
|
|
|
|
|
.
|
\
|
> =
>

p-value = 0.3121 > = 0.04
We fail to reject H
0
. There is insufficient evidence to infer that more than 25% of
customers choose salad instead of fries with their main course.

11. H
0
: = $50,000
H
1
: > $50,000
= 0.03
With Excel, we calculate
x = 50356
s = 7962.922669
n = 40 (given)
A histogram of the data is somewhat skewed to the right. However, the sample size
is fairly large, at 40, and so this is normal enough to use the t-distribution.

0
2
4
6
8
10
12
N
u
m
b
e
r
o
f
H
o
u
s
e
h
o
l
d
s
AnnualIncome
HouseholdIncomes inaHalifaxSuburb

Since we are using Excel, it makes sense to use the template. Results are shown below.

MakingDecisionsAboutthePopulation
MeanwithaSingleSample
Dothesampledataappeartobenormally
distributed? yes
SampleStandardDeviations 7962.92
SampleMean 50356.00
SampleSizen 4
HypotheticalValueofPopulationMean 50000
tScore 0.28275
OneTailedpValue 0.38943
TwoTailedpValue 0.77886
0

This is a one-tailed test.
p-value = 0.3894 > = 0.03
We fail to reject H
0
. There is insufficient evidence to infer that average household
incomes in this particular suburb were more than $50,000 a year.

12. H
0
: = $33
H
1
: > $33
= 0.03
x = $34.21
s = $10
n = 500 (half of the 1000 people surveyed)
We are told that the sample data are approximately normally distributed, and so we
will assume the population data are, as well.

) 706 . 2 (
500
10
33 21 . 34
) 21 . 34 (
> =
|
|
|
.
|
\
|
> =
>
t P
t P
x P

This is a two-tailed test. The t-distribution has 499 degrees of freedom. For this, we
will use the last row of the table (labelled "").
p-value = P(t > 2.706) < 0.005
We reject H
0
. There is sufficient evidence to infer that all Canadian women spend
more than $33, on average, when they make quick trips to the grocery store.

13. H
0
: = $37876
H
1
: < $37876
= 0.02
Using Excel, we find
x = 35238
s = 2752.578754
n = 50
A histogram of the data is shown below.

0
2
4
6
8
10
12
14
16
N
u
m
b
e
r
o
f
C
l
e
r
k
s
AnnualSalary
SalariesofaRandom Sampleof EntryLevel
ClerksintheArea


The histogram is unimodal and fairly symmetric. The sample size is fairly large, at
50. It is appropriate to use the t-distribution.

Since we are using Excel, we will use the template. It is shown below.

distributed? yes
SampleMean 35238
SampleSizen 5
tScore 6.7767
OneTailedpValue 7.4E09
TwoTailedpValue 1.5E08
0

This is a one-tailed test, so the p-value is 7.4 10
-9
, or 0.0000000074, which is very
small. It would be almost impossible to get the sample mean that was obtained from
the sample if the average salary of entry-level clerks in the area was actually
$37,876. The fact that we did get this sample mean provides strong evidence against
the null hypothesis.
The p-value < = 0.02.
We reject H
0
. There is strong evidence to infer that average salary of clerks in the
area is lower than $37,876. In other words, the average salary of entry-level clerks in
the company is higher than in the area.

14. H
0
: = 10
H
1
: < 10
= 0.04
x = 8.9
s = 5.5
n = 60
We are told that the sample data appear normally distributed, so we will assume the
population data are normally distributed.

) 55 . 1 t ( P
60
5 . 5
10 9 . 8
t P
) 9 . 8 x ( P
s =
|
|
|
.
|
\
|
s =
s

We know P(t s -1.55) = P(t > +1.55)
We need to refer to the t-distribution with 59 degrees of freedom. The closest entries
in the t-table are in the row for 60 degrees of freedom.
A t-score of 1.55 would be located between t
.100
and t
.050
.
0.050 < P(t > + 1.55) < 0.100
This is a one-tailed test, so
0.050 < p-value < 0.100
p-value > = 0.04

We fail to reject H
0
. There is insufficient evidence to contradict the companys idea
that most baby boomer households have stereo equipment that is at least 10 years
old.

15. H
0
: = $85
H
1
: > $85
= 0.05
x = $87.43
s = $16.23
n = 15
We are told to assume the population data are normally distributed.

) 580 . 0 (
15
23 . 16
85 43 . 87
) 43 . 87 (
> =
|
|
|
.
|
\
|
> =
>
t P
t P
x P

We need to refer to the t-distribution with 14 degrees of freedom. A t-score of 0.580
would be located to the left of t
.100
.

This is a one-tailed test, so
p-value > 0.100 > = 0.05

We fail to reject H
0
. There is insufficient evidence to indicate that the average price
of the companys competitors is higher than $85 for cleaning a bedroom carpet. If
the company wants to be sure that its rates are lower, it must decrease them.

Chapter Review Exercises
1. a. H
0
: p = 0.03
H
1
: p < 0.03
b. A Type I error occurs when we mistakenly reject H
0
when it is in fact true. In
this case, this would correspond to concluding that the shipment contained fewer
than 3% defectives, when this was not the case.
A Type II error occurs when we fail to reject H
0
when it is in fact false. In this
case, this would correspond to rejecting the shipment when in fact it contained
fewer than 3% defectives.
c. From the toy manufacturers point of view, Type I error would be important,
because it would lead to a higher rate of defective components installed in the
toys, which might lead to customer complaints. Type II errors would also have
consequences, because it might mean unnecessary delays in production, and
difficult relations with suppliers. However, Type I error is probably more
important.

2. a. H
0
: = 10.6 litres per 100 kilometres
H
1
: < 10.6 litres per 100 kilometres
0
this case, this would correspond to concluding that the new gasoline gave better
gas mileage, when in fact it did not.
0
case, this would correspond to failing to conclude that the new gasoline gave
better gas mileage, when in fact it did.

3. a. H
0
: = 750 ml
H
1
: 750 ml
This is a two-tailed test, because there are problems if the water bottles contain
either too much or too little water.
0
this case, this would correspond to concluding that the bottles do not contain the
correct amount of water (and probably adjusting something), when in fact they
were fine.
0
case, this would correspond to failing to notice when the bottles did not contain
the correct amount of water, which might lead to customer complaints (or lower
profits).
c. As a consumer, you would probably be most concerned about Type II errors,
particularly when they led to underfilled bottles. Underfilled bottles could also
be a consequence of Type I errors.

4.

) 622 . 0 t ( P
40
6 . 35
300 5 . 296
t P
) 5 . 296 x ( P
s =
|
|
|
.
|
\
|
s =
s

P(t s -0.622) = P(t > + 0.622)
There is no row in the t-table for 39 degrees of freedom. We will use the row for 40
degrees of freedom (the closest available).
If we were to place a t-score of 0.622 in the table, it would be to the left of t
.100
. So
we know P(t > 0.622) > 0.100. Since this is a one-tailed test, this means p-value >
0.100.

5.

197 . 0
0985 . 0 2
) 29 . 1 ( 2
200
) 74 . 0 )( 26 . 0 (
26 . 0 30 . 0
2
) 30 . 0 ( 2
=
- =
> - =
|
|
|
|
.
|
\
|
> - =
> - =
z P
z P
p P
value p

6. a. H
0
: = 48.2
H
1
: < 48.2
0
this case, this would correspond to concluding that the efforts to reach younger
listeners had been successful, when in fact they had not been.
0
case, this would correspond to concluding that the efforts to reach younger
listeners had failed, when in fact they had succeeded. This might lead to making
greater efforts to reach younger listeners, when such efforts were not necessary.
c. If the null hypothesis were rejected with a p-value of 1%, there would be strong
evidence that the radio station had succeeded in reaching a younger audience.
d. If the sample mean is 46, it would appear that the younger listeners are not that
much younger than before! In this case, it would probably have been better to
set a new target age, and test to see if the average age was below this. Having
younger listeners than previously is probably not the correct goal.

7. H
0
: = $725
H
1
: < $725
= 0.05
We are told to assume that the population data are normally distributed.

x = $641
s = $234
n = 2711

) 691 . 18 (
2711
234
725 641
) 641 (
s =
|
|
|
.
|
\
|
s =
s
t P
t P
x P

Of course, there is no row in the t-table for 2710 degrees of freedom. If we look at
the last row in the table, we can see that the p-value < 0.005 (probably much less).
This sample result would be practically impossible to get, if Canadian internet
shoppers were actually spending an average of $725 shopping online annually.

p-value < , so reject H
0
. There is very strong evidence that the annual internet
spending by Canadians is less than $725.

8. H
0
: p = 0.90
H
1
: p < 0.90
= 0.04
In Chapter 6, we noted that we had to assume that the sample of 500 is no more than
5% of the total population, an assumption we cannot check.

Also, we noted that np and nq > 10, so the sampling distribution of would be
approximately normal. We also calculated
p

0367 . 0
) 79 . 1 (
500
) 10 . 0 )( 90 . 0 (
90 . 0 876 . 0
) 876 . 0 (
=
s =
|
|
|
|
.
|
\
|
s =
s
z P
z P
p P

This is a one-tailed test. The p-value < , so there is evidence that the proportion of
the cafeterias customers who are satisfied with the range of food served and prices is
less than 90%.

9. H
0
: p = 0.17
H
1
: p > 0.17
= 0.01
In Chapter 6, we noted that the sample of 500 was no more than 5% of the total
population.

p

0217 . 0
9783 . 0 1
) 02 . 2 (
500
) 83 . 0 )( 17 . 0 (
17 . 0 204 . 0
) 204 . 0 (
=
=
> =
|
|
|
|
.
|
\
|
> =
>
z P
z P
p P

This is a one-tailed test. The p-value =0.0217 > = 0.01. Fail to reject H
0
. There is
not enough evidence to conclude that the proportion of Canadians who drink milk as
the primary breakfast beverage is greater than 17%, the percentage of Americans
who drink milk as the primary breakfast beverage. Note that this is not the same
conclusion we drew in Chapter 6, where the implied level of significance was 5%. In
this exercise, we have used a smaller level of significance. Under these new
conditions, it is harder to reject the null hypothesis.

10. H
0
: p = 0.65
H
1
: p > 0.65
= 0.03

In Chapter 6, we noted that the sample of 400 was not more than 5% of the total
number of visitors.

p

0104 . 0 9896 . 0 1
) 31 . 2 (
450
) 35 . 0 )( 65 . 0 (
65 . 0 705 . 0
) 705 . 0 (
= =
> =
|
|
|
|
.
|
\
|
> =
>
z P
z P
p P

The p-value < o, so there is evidence that the proportion of visitors who felt they had
an enjoyable experience was more than 65%. As noted earlier, this does not prove
that the upgrades to the tourist attraction caused the change, although it might be the
case.

11. H
0
: p = 0.05
H
1
: p > 0.05
= 0.02

Sampling is done without replacement, and sample size is 500. As long as the
sample of 500 is not more than 5% of the total population of employees, it is
appropriate to use the binomial distribution as the underlying model. We proceed by
noting that we are making this assumption, and that the conclusions are not valid if
this assumption is not correct.

np = 500 (0.05) = 25
nq = 500 (1 0.05) = 475
Both are > 10, so the sampling distribution of will be approximately normal. p

= 38/500 = 0.076 p

0038 . 0
9962 . 0 1
) 67 . 2 z ( P
500
) 95 . 0 )( 05 . 0 (
05 . 0 076 . 0
z P
) 076 . 0 p ( P
=
=
> =
|
|
|
|
|
.
|
\
|
> =
>

p-value = 0.0038 < = 0.02
We reject H
0
. There is sufficient evidence to suggest that the proportion of
employees who would use the tuition subsidy program is greater than 5%.

12. H
0
: = $700
H
1
: > $700
= 0.05
We are told to assume that the population data are normally distributed.

x = $756
s = $132
n = 75

) 67 . 3 (
75
132
700 756
) 756 (
> =
|
|
|
.
|
\
|
> =
>
t P
t P
x P

There are no entries in the t-table for 74 degrees of freedom. However, whether we
look at the row for 70 degrees of freedom, or 80 degrees of freedom, we make the
same conclusion: a t-score of 3.67 is to the right of t
.005
. So we can conclude that P(t
> 3.67) < 0.005. We reject H
0
. There is sufficient evidence to suggest that the
average cost of textbooks for college students has increased.

13. H
0
: p = 0.5
H
1
: p > 0.5
= 0.05

Sampling is done without replacement, and sample size is 500. As long as the
sample of 500 is not more than 5% of the total population of customers, it is
appropriate to use the binomial distribution as the underlying model. We proceed by
noting that we are making this assumption, and that the conclusions are not valid if
this assumption is not correct.

n = 20 + 47 + 32 + 15 + 9 = 123

np = 123 (0. 5) = 61.5
nq = 123 (1 0. 5) = 61.5

= (20 + 47)/123 = 0.54472 p

1611 . 0
8389 . 0 1
) 99 . 0 (
123
) 5 . 0 )( 5 . 0 (
5 . 0 54472 . 0
) 54472 . 0 (
=
=
> =
|
|
|
|
.
|
\
|
> =
>
z P
z P
p P

p-value = 0.1611 > = 0.05
We fail to reject H
0
. There is not enough evidence to infer that more than half of
customers agreed or strongly agree that the staff at the local branch can provide good
advice on their financial affairs.

14. H
0
: =58.2
H
1
: > 58.2
= 0.05
We are told to assume that the test marks are normally distributed.

x = 65.4
s = 18.6
n = 20

) 731 . 1 (
20
6 . 18
2 . 58 4 . 65
) 4 . 65 (
> =
|
|
|
.
|
\
|
> =
>
t P
t P
x P

We must consult the t-table for the row with 19 degrees of freedom. We see that
1.731 is between t
.050
and t
.025
. So we can conclude that P(t > 1.731) < 0.05. We
reject H
0
. There is enough evidence to suggest that the average mark was higher in
Mr. Wilson's class. However, this does not mean that Mr. Wilson's test was easier
than Ms. Hardy's. There are many other possible explanations, such as:
- Mr. Wilson is a better teacher
- Mr. Wilson's students work harder
- Mr. Wilson's students are smarter
- Mr. Wilson's students have a better class schedule, which allows them to absorb
the material better.

15. This data set was examined for Chapter 6 Review Exercise 9. The sample data
appeared to be approximately normally distributed.

0
2
4
6
8
10
12
14
16
18
N
u
m
b
e
r
o
f
C
o
m
p
o
n
e
n
t
s
LifespaninHours
LifespansofaRandom Sampleof40
ElectronicComponents

The Excel template for this data set is shown below.

distributed? yes
SampleMean 6188.3875
SampleSizen 4
tScore 0.3130366
0

H
0
: = 6200
H
1
: < 6200
= 0.05
This is a one-tailed test. From the template, we see that p-value = 0.378 > = 0.05.
Fail to reject the null hypothesis. There is not enough evidence to suggest that the
average lifespan of the electronic components is less than 6200 hours.

16. This data set was examined in Chapter 6 Review Exercise 11. We noted that the
histogram was skewed to the right, but that the sample size, at 29, was fairly large,
and so we assumed the sampling distribution would be fairly normal.

The Excel template for this data set is shown below.

distributed? yes
SampleMean 1756.48
SampleSizen 2
tScore 2.1865
9

H
0
: = 2000
H
1
: < 2000
= 0.04
This is a one-tailed test. From the template, we see that p-value = 0.0187 < = 0.04.
Reject the null hypothesis. There is enough evidence to suggest that the average
daily sales at the shop are less than $2,000. However, as noted before, this could be
the result of the change of ownership, and does not necessarily indicate the former
owner was not being truthful.

17. H
0
: p = 0.25
H
1
: p < 0.25
= 0.05

Sampling is done without replacement, and sample size is 2400. However, the
population is all Canadians, so the sample is definitely less than 5% of the
population. It is appropriate to use the binomial distribution as the underlying model.

n = 2400

Use Excel's Histogram tool to organize the data. The output is shown below. The
total was calculated with an Excel formula. In the data set, 0 = not interested, 1 = not
sure, 2 = interested, 3 = very interested.

Bin Frequency
0 1197
1 6
2 3
3 1
Total 2400
35
77
91

The completed Excel template for this data set is shown below.

ProportionwithaSingleSample
SampleSizen 2400
HypotheticalValueofPopulation
Proportionp(decimalform) 0.25
np 600
nq 1800
Arebothnpandnq>=10? yes
SampleProportion 0.23667
zScore 1.5085

np = 600
nq = 1800

= (377 + 191)/2400 = 0.23667 p

This is a one-tailed test, so the p-value = 0.06571 > = 0.05

Fail to reject H
0
. There is not enough evidence to infer that fewer than one quarter of
all Canadians are extremely interested or very interested in having smart meters
installed in their homes.

18. H
0
: = $25
H
1
: > $25
= 0.05

A histogram of the data set is shown below. The sample data appear to be
approximately normally distributed. In this case, with sample size fairly large at 50,
we rely to an extent on the robustness of the t-distribution.

0
2
4
6
8
10
12
14
16
18
N
u
m
b
e
r
o
f
C
u
s
t
o
m
e
r
s
AmountofPurchase
SurveyofDrugstoreCustomers, MostRecent
Purchase

A completed template for the problem is shown below.

distributed? yes
SampleMean 26.4396
SampleSizen 5
tScore 1.34751
0

This is a one-tailed test. The p-value is 0.092, which is greater than the level of
significance (5%). We fail to reject the null hypothesis. There is not enough
evidence to infer that the average purchase amount at the drugstore is more than $25.

19. First, the data must be analyzed. Using Excels Histogram tool from Data Analysis,
we discover the following.

Survey of Drugstore Customers,
Ratings of Staff Friendliness
Rating
Number of
Customers
Percentage
of
Customers
Excellent 15 30%
Good 23 46%
Fair 10 20%
Poor 2 4%
Total 50

H
0
: p = 0.05
H
1
: p < 0.05
= 0.04

Sampling is done without replacement. The sample size of 50 is probably not more
than 5% of the total customer base of the drugstore.

np = 50 (0.05) = 2.5
nq = 50 (1 0.05) = 47.5
Since np is not > 10, the sampling distribution of will not be approximately
normal. Instead, we use Excel and the binomial distribution. In the sample, 2
customers rated staff friendliness as poor.
p
P(x s 2, n = 50, p = 0.05) = 0.540533
We fail to reject H
0
. There is insufficient evidence to infer that fewer than 5% of the
customers rate staff friendliness as poor.

20. H
0
: = $45,000
H
1
: > $45,000
= 0.04

First we examine the data. A histogram of the data set is shown below.

0
2
4
6
8
10
12
14
16
18
20
N
u
m
b
e
r
o
f
C
u
s
t
o
m
e
r
s
AnnualIncome
SurveyofDrugstoreCustomers, Annual Income

This data set is very skewed to the right, and is probably too skewed to allow the use
of the t-distribution. We cannot proceed with this analysis with the tools currently at
our disposal.

21. H
0
: = 40
H
1
: 40
= 0.05

First we examine the data. A histogram of the data set is shown below.

0
5
10
15
20
25
30
N
u
m
b
e
r
o
f
C
u
s
t
o
m
e
r
s
Age
SurveyofDrugstoreCustomers, Customer
Ages

This histogram is extremely skewed to the right, and is too skewed for us to proceed.
We cannot proceed with the analysis with the tools currently at our disposal.

22. First, the data must be analyzed. Using Excels Histogram tool from Data Analysis,
we discover the following.

Survey of Drugstore Customers,
Ratings of Speed of Service
Rating
Number of
Customers
Percentage
of
Customers
Excellent 3 6%
Good 19 38%
Fair 19 38%
Poor 9 18%
Total 50

Sampling is done without replacement. The sample size of 50 is probably not more
than 5% of the total customer base of the drugstore.

The completed Excel template is shown below.

SampleSizen 5
np 20
nq 30
zScore 0.57735
0

np = 50 (0.40) = 20
nq = 50 (1 0.40) = 30
From the sample, we see that 44% of customers rated the speed of service as good or
excellent.

The p-value is 0.282, which is > = 0.03. We fail to reject H
0
. There is insufficient
evidence to infer that more than 40% of customers rate the speed of service as good
or excellent.

23. As usual, we must examine the data before we proceed. A histogram is shown below.

0
20
40
60
80
100
120
N
u
m
b
e
r
o
f
F
a
m
i
l
i
e
s
AfterTaxIncomesforFamiliesofTwoorMorePeople
RandomSampleof CityHouseholds

The histogram is skewed to the right. (This is often the case with income data.) The
sample size is quite large, at 550. However, before we proceed with the analysis, it
might be useful to think about whether there are actually two populations of data
here. It could be, for instance, that there are a few high incomes in one exclusive
area. Depending on the goal of the analysis, it might be useful to remove these
incomes from the data set. However, this should only be done for good reason, and in
a logical way. We will not proceed with the current data set, but this is a judgment
call. The sample size may be large enough that the sampling distribution will be
normal enough for reliable results.
24.
a. H
0
: p = 0.25
H
1
: p > 0.25
= 0.04

Sampling is done without replacement. We are considering these students as a
random sample of all students entering Business programs in Canadian colleges, so
the sample is 5% of the population.

First, organize the data. "0" means "no", and "1" means "yes.

Bin Frequency
0 371
1 139
Total 510


SampleSizen 510
np 127.5
nq 382.5
zScore 1.17601

We see that np and nq > 10, so conditions for normality of the sampling distribution
are met.

The one-tailed p-value is 0.12 > = 0.04. There is not enough evidence to infer that
over 25% of incoming students have laptops.
b. First, analyze the data.

WhereDoYouLive? Frequency
Relative
Frequency
WithParentsorRelatives 164 32.16%
InResidence 130 25.49%
RentalHouseorApartment 113 22.16%
OwnHome 27 5.29%
RentRoom 76 14.90%
Total 510


SampleSizen 510
np 51
nq 459
zScore 3.69006

H
0
: p = 0.10
H
1
: p 0.10
= 0.04

Sampling is done without replacement. We are considering these students as a
random sample of all students entering Business programs in Canadian colleges, so
the sample is 5% of the population.

We see from the template that np and nq > 10.

The two-tailed p-value is 0.00022 < = 0.04. Reject H
0
. There is sufficient evidence
to suggest that the percentage of incoming students who rent rooms is not 10%.

c. First, analyze the data and create a histogram to check for normality.

0
20
40
60
80
100
120
N
u
m
b
e
r
o
f
S
t
u
d
e
n
t
s
Mark
MarksofIncoming Students

The histogram is fairly normal.

The completed Excel template for the hypothesis test is shown below.

distributed? yes
SampleMean 85.1922
SampleSizen 510.00
tScore 15.2374
OneTailedpValue 9.2E44
TwoTailedpValue 1.8E43

H
0
: = 80
H
1
: > 80
= 0.04

From the template, we see that the p-value is very small. Reject H
0
. There is very
convincing evidence that the average mark of incoming students is over 80%.

d. First, analyze the data and create a histogram.

0
10
20
30
40
50
60
70
80
90
100
N
u
m
b
e
r
o
f
S
t
u
d
e
n
t
s
AmountofSavingsAvailable
IncomingStudents,Amount ofSavings Availablefor
Education

The histogram is fairly normal, and the sample size is quite large.


distributed? yes
SampleMean 6427.25
SampleSizen 510.00
tScore 0.5091

H
0
: = $6,500
H
1
: < $6,500
= 0.04

From the template, we see that the one-tailed p-value is 0.30546. Fail to reject H
0
.
There is not enough evidence to infer that the average amount of savings available
for education is less than $6,500.

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Instructors Solutions Manual - Chapter 7

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