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The sampling distribution would have less dispersion.

An extended example of the sampling distribution of the


mean is given below. It shows the distribution of mean of 20 samples for sample sizes of five and 25 respectively
on the cooperative service English test. See Exhibit 1.
Exhibit 1
Distributions of Means of Twenty Samples
Drawn from a Normal Population with µ = 121.6 and σ = 37.15,
when n = 5, and n = 25
Number of Sales
Score Interval n=5 n = 25
140-144 3
135-139 1
130-134 2 1
125-129 2 5
120-124 1 6
115-119 2 5
110-114 1 3
105-109 4
100-104 2
95-99
90-94
85-89 1
80-84 1 _____
Total 20 20
Mean of twenty means 119.0 121.7
Standard deviation of twenty means 18.0 6.1
11. Suppose you are planning a sample of cat owners to determine the monthly average number of cans of cat
food purchased. The following standards have been set: a confidence level of 99 percent and an error of less than
five units. Past research has indicated the standard deviation should be six units. What would be the required
sample size?
Answer:

 ZS 
2

n
 
= E
E =5
S =6
Z = 2.57 at 99% confidence
2
( 2. 57) ( 6) 
2
15. 42 
 5  =
 5 
n =
[3.084]2 = 9.5
n = 9.5
We should be asked why sample size is so low if the confidence level is at 99%. Of course, it is because such a large
magnitude of error is tolerable. Reducing the E to 1 increases sample size to 238.
2
( 2. 57) ( 6) 
2
15. 42  237. 7
 1  =
 1 
=
n =

12. In a survey of 500, 60 percent responded positively to an attitude question. Calculate a confidence interval at
95% to get an interval estimate for a proportion.
Answer
p = .6
n = 500
Z = 1.96 at 95% confidence

pq (. 6) ( . 4) .24
= = = . 0048 = . 0219
S = n 500 500
p

Confidence interval = p ± Z S
c.l. p

.6 ± (1.96)(.0219)
.6 ± .042924

Confidence interval = .557076 – .642924

13. In a nationwide survey a researcher expects 30% of the population will agree with an attitude statement. She
wishes to have less than 2% error and wishes to be 95% confident. What sample size is needed?
Answer
 Z 2c .1. pq 
n =
 E
2

p = .3
q = .7
Z = 1.96
Z2 = 3.841
E = .02
E2 = .0004
( 3. 841) ( .3) ( . 7)
= 2016. 525
n = . 0004
n = 2017 by calculation

14. City Opera, a local opera company, wishes to take a sample of its subscribers to learn the average number of
years that people have been subscribing to it. The director of research expects the average number of years to be 12
and believes the standard deviation would be about two years (approximately one sixth of the range). She wishes to
be 95% confident in her estimate. What is the appropriate sample size?
Answer :First, let’s summarize the information available:
H : µ = 12
o
That is, the expected value of the average number of years subscribing to the opera is 12.
S=2
α = .05 because of the desire to be 95 percent confident.
There is not enough information to calculate the sample size. The researcher must know the acceptable magnitude
of error. Students will be forced to make this managerial decision on their own. (Many will not like this. Others
will mistakenly utilize µ as an estimate of E.)
Suppose one-half year is an acceptable error. Then, E = .5 and
 ZS 
2

n=
 E 
2
( 91. 96) ( 2) 
 .5 
n=
2
3. 92 
n=  .5 
n = (7.84)2
n = 60.68

15. A researcher expects the population proportion of Cubs fans in Chicago to be 80 percent. The researcher wishes
to have an error of less than five percent and to be 95 percent confident of an estimate to be made from a mail
survey. What sample size is required?
Answer:
Z = 1.96
E = 0.05
p = 0.8
q = 0.20
2 2
Z pq ( 1. 96) ( . 80) ( .20) ( 3. 8416) (.16) . 6146
2 = 2 = = = 245. 84
( . 05) ( . 0025)
n = E . 0025
n ≈ 246
What sample size would be required if a 99 percent confidence level were desired?
Z = 2.57
E = 0.05
p = 0.80
q = 0.20
2
( 2. 57) (. 80) ( . 20) ( 6. 6049) (.16) 1. 0567
2 = = = 422. 7
(. 05) . 0025 . 0025
n =
n ≈ 423
16. In a survey respondents were asked to respond to a statement asking if their
work was interesting. Interpret the frequency distribution in the SPSS output
below.
“My work is interesting”:
Category Code Absolute Relative Adjusted Cum.
Label frequency Frequency Frequency Frequency
(Percent) (Percent) (Percent)

Very true 1 650 23.9 62.4 62.4


Somewhat 2 303 11.2 29.1 91.5
true
Not very true 3 61 2.2 5.9 97.3
Not at all true 4 28 1.0 2.7 100
1673 61.6 Missing
------------- ------------- ---------------
Total 2715 100.0 100.0
Valid cases 1042 Missing cases 1673

Answer: In the above survey the respondents were asked to respond to a statement asking if their work was
interesting on a rating scale of “very true to not at all true”. However, it appears that even among most of the
respondents they rated very true. And only few replied for “not at all true”. The SPSS output gives the absolute
frequency of the observations, the valid percentage (the adjusted frequency as a percentage of the number of
respondents who provided a recorded answer rather than leaving the question blank) and the cumulative
percentage (which is calculated on the basis of missing cases). This table shows that 650 of the respondents in a
survey of 2715 responded that it was very true that working is interesting. The zero code (0) and the
corresponding relative frequency column indicate 61.6 percent of the respondents did not answer this question,
most likely because they were not employed outside the home. Therefore, the adjusted frequency percentage
figures are probably more representative from a percentage point of view. Thus, 62.4 percent answered very
true—working is interesting. Combining those who answered very true and somewhat true, the output shows
the cumulative frequency (among those who answered the question) for this statement is 91.5 percent.

17. What is the purpose of a statistical hypothesis?


Answer: A statistical hypothesis shall serve the purpose of either confirming or otherwise rejecting the theoretical,
unproven proposition or supposition (hypothesis) which tentatively explains certain facts or phenomena, through the
empirical evidence. A hypothesis is an unproven proposition or supposition which tentatively explains certain facts
or phenomena. In its simplest form, a hypothesis is a guess. The sales manager may hypothesize that salespeople
highest in product knowledge will be the most productive salespeople. A personnel manager may believe that if
attitudes toward job security are changed in a positive direction, there will be an increase in employee retention.
With statistical techniques, we are able to decide whether or not our theoretical hypothesis is confirmed by the
empirical evidence.
Because scientists should be bold in conjecturing but extremely cautious in testing, statistical hypotheses are
generally stated in a null form. A null hypothesis is a statement about a status quo. It is a conservative statement
which communicates the notion that any change from what has been thought to be true or observed in the past will
be due entirely to random error. In fact, the true purpose of setting up the null hypothesis is to provide an
opportunity to nullify it.

18. What is significance level? How does a researcher choose a significance level?
Answer: Significance level is a critical probability in choosing between the null and the alternative hypotheses. It is
the probability level that is too low to warrant support of the null hypothesis.
The researcher chooses the significance level based on:
1. The acceptable values that reflect the difference from hypothesized mean in the null hypothesis
2. The range within which the difference is miniscule which would be explained on the basis of random sampling
error.
3. The significance level would also be based on the of research objectives (Significance at 0.01% level to 0.05%).
We must have some standard or decision rule to determine if, in fact, we should reject the null hypothesis and accept
the alternative hypothesis. Statisticians have defined the decision criterion as the significance level. The level of
significance determines the probability level—say, .05 or .01—that is to be considered too low to warrant support of
the null hypothesis. On the assumption that the hypothesis being tested is true, if the probability of occurrence of
the observed data is smaller than the level of significance, then the data suggest the null hypothesis should be
rejected. In other words, there was evidence to support contradiction of the null hypothesis, which is equivalent to
supporting the alternative hypothesis.
4. The researcher in a way decides “how much” he or she is willing to bet. More appropriately, the researcher
selects the odds of making an “incorrect” decision. Some researchers will take a 90 percent chance; others, more
conservative, will take 99 percent. By convention, 95 percent is often utilized.

19. Distinguish between Type I and Type II error.


Answer: Type I Error: An error caused by rejecting the null hypothesis when is true. The Type I error has the
probability of alpha (α ). A type I error occurs when the researcher concludes that there is a statistically significant
difference when in reality one does not exist.
Type II Error: An error caused by failing to reject the null hypothesis when the alternative hypothesis when the
alternative hypothesis is true. The probability of making this incorrect decision is called beta (β ). No error is
made if the null hypothesis is true and the decision is made to accept it. A correct decision is also made if the null
hypothesis is false and the decision is made to reject the null hypothesis.
*Unfortunately, without increasing sample size, the researcher cannot simultaneously reduce Type I and Type II
errors, because there is an inverse relationship between these two types of errors. Thus, reducing the probability of a
Type II error increases the probability of a Type I error.
20.Assume you have the following data: Ho: µ = 200, S = 30, n = 64, and X = 218. Conduct a hypothesis test at the .
05 significance level.
Answer:
H : µ = 200 versus H : µ ≠ 200
0 1
n = 64
X = 218
Z c .1. = 1.96 at 0.05 significance level
S X = S n = 30 8 = 3. 75
X ± Z c .1.S X
CI ( µ ) =
CI ( µ ) = 218 ± 1.96 (3.75)
CI ( µ ) = 218 ± 7.35
CI ( µ ) = 210.65 to 225.35
X
f(
)
µ
E()=218
225.35
o
=200 21
Upper
0.65
Limit

Lower Limit

The confidence interval [210.65 to 225.35] does not include 200; therefore the null hypothesis is rejected at the 0.05
significance level.

21. Assume you have the following data: Ho: µ = 2450, S = 400, n = 100, and X = 2,300. Conduct a
hypothesis test at the .01 significance level.
Answer:
H : µ = 2450 versus H : µ ≠ 2450
0 1
n = 100, S = 400

X = 2300
Z c .1. = 2.57 at 1 % significance level
S X = S n = 40
X ± Z c .1.S X
CI ( µ ) = = 2300 ± (2.57)(40) = 2300 ± 102.8

CI ( µ ) = 2197.2 to 2402.8
X
f(
)
µ =
2402.8
2197.2
Lower o
Upper
E()=2300
2450
Limit

The confidence interval [2197.2 to 2402.8] does not include 2450; so the null hypothesis is rejected at the 0.01
significance level.

22. A personnel researcher hypothesizes that 15 percent of employees eligible for early retirement will actually
choose to retire. In a sample of 1,200, 20 percent of the people say they plan to retire. Perform a hypothesis test.
Answer: H0: π = .15 versus H1: π ≠ .15
Sample:
n = 1,200, p = .20

pq ( . 2) ( .8) .16
Sp = n = 1200 = 1200

Sp = .0115
p- π
Sp
Z =
. 20 − .15
Z = . 0115
. 05
Z = . 0115
Z = 4.348
The Z value exceeds 1.96 so the null hypothesis should be rejected at the .05 level. Indeed it is significant beyond
the .001 level.

23. A personnel manager has a computerized list of all employees that indicates 70 percent are full-time employees, 20
percent are part-time employees, and 10 percent are furloughed or are laid off employees. A sample of 50 employees
from the list indicates 40 full-time employees, 6 part-time employees and 4 furloughed/laid off employees. Conduct a
statistical test to determine if the sample is representative of the population.
Answer:
Population Expected Observed
Distribution Frequency Frequency
Full-time 70% 35 40
Part-time 20 10 6
Laid-off 10 5 4

2
(0i Ei ) 2 2 2 2 2 2
2 − ( 40 − 35) ( 6 − 10) ( 4 − 5) ( 5) ( − 4) (1) 25 16 1
X = ∑ = + + = + + = + + =
Ei 35 10 5 35 10 5 35 10 5
. 71+ 1. 6 + . 2 = 2.51
d.f. = K – 1 = 3 – 1 = 2 , Critical value=5.99. Therefore H0 can not be rejected at α =0.05.
The chi square value of 2.251 with 2 degreed of freedom indicates that this test is not statistically significant at the 0.05
level.

24. Test the hypothesis of no differences for average payback period (years) necessary to justify solar systems for
residences.
Answer: Savings and Loans Other Financiers
X 1 = 8.7 X 2 = 7.7
2 2
S1 = 0.5 S 2 = 0.6

n1= 100 n2 = 64
X1 − X2
t=
SX − X 2
1

where

[( n1 − 1)S21 − ( n 2 − 1)S 22 ]  1 1 
SX = +
1− X2
n1 + n2 − 2  n1 n2 

[( 100 - 1) . 5 + ( 64 − 1). 6]  1 1 
SX 1 − X 2 = +
100 + 64 − 2 100 64
8. 7 - 7. 7
t=
.1175

= 8. 51 0
Thus we have sufficient evidence to reject H

25. Analyze the following contingency table with respect to which program is more effective:
Message Recall When Presented with Two Different
Television Programs
Result A B Total
Message recalled 60 60 120
Message not recalled 90 140 230
________________________
Total 150 200 350
Answer:
χ 2 = 3.83
At α = .05, the critical level is 2.706.
At α = .1, the critical level is 3.841; thus, if you use the α = .05 level, there is no significant difference
between the programs.

26. What does it mean when a researcher says that there is a strong (.60), significant (α = .05) sample based
correlation between two variables? Can we conclude that the sample correlation is also the population
correlation coefficient?
Answer
The researcher must be careful in the way that he/she interprets the .6 correlation value. Remember that the
square of the correlation value shows how much variance is explained in the relationship. In this case the
square is .36, or 36% of the variance is explained and 64% is unexplained. Correlation does not imply cause
and effect. Other ingredients are necessary to establish a cause/effect relationship. The significance of a
correlation value is virtually useless because it is determined mostly by the sample size, not the size of the
coefficient. In other words, all things being equal, even a small correlation can be significant if the sample
size is large. Also, you cannot imply that the correlation will hold in the population even though it is
significant. In fact, this is the hardest to establish except when the finding is replicated a number of times
under different settings and with different samples.

27. Given the following number of hours worked per week of an independent sample of males and females,
determine if there are any significant differences at a α = .05 level of significance?
Male Female
30 40
20 25
35 15
25 20
15 10
125 110
Answer
XM = 25 XF = 22
S2m = 49.99 S2m = 106.04
df = 5 + 5 - 2 = 8
A. Ho : µ m = µ f
H1 : µ m ≠ µ f
B. At α = 0.05, df = 8 [Critical t = 2.306]
4(49.99) + 4(106.04)
C. t = 25 - 22/ ───────────── (1/5 + 1/5) = 3/5.59 = 0.54
5+5-2
t calculated = .054
D. Since t calculated is less than t critical, do not reject Ho , no difference.