School of Business

North South Univers ity

Course: BUS173; Assignment #01
Date of submission: 27th October

Problem 1: The weekly salary of all customer service workers of a company has had
mean of $400 with standard deviation $48.6. In contract negotiation, the company claims
that a new incentive scheme has increased the average weekly earnings for all workers.
A union representation takes a random sample of 15 workers and finds that their weekly
earning have an average of $421.35.
(a) Test the company claims at 5% level of significance. Sketch the distribution of
test statistic under null and alternative hypothesis showing rejection region.
(b) Find 95% CI for the population mean of weekly salary and P-values. Based on CI
and P-value, would you able to have same conclusion that obtained in (a)?

Problem2 : The past records of a supermarket show that its customers spend an average
of $95 per visit at this store. Recently the management of the store initiated a promotional
campaign according to which each customer receives points based on the total money
spent at the store, and these points can be used to buy products at the store. The
management expects that as a result of this campaign, the customers should be
encouraged to spend more money at the store. To check whether this is true, the manager
of the store took a sample of 14 customers who visited the store. The following data give
the money (in dollars) spent by these customers at this supermarket during their visits.

109 136 107 116 101 109 110 94 101 97 104 83 67 120

Assume that the money spent by all customers at this supermarket has a normal
distribution. Using a 5% significance level, can you conclude that the mean amount of
money spent by all customers at this supermarket after the campaign was started is more
than $95?

Problem 3: According to the analysis of Federal Reserve statistics and other government
data, American households with credit card debts owed an average of $15,706 on their
credit cards in August 2015 (www.nerdwallet.com). A recent random sample of 500
American households with credit card debts produced a mean credit card debt of $16,377
with a standard deviation of $3800. Do these data provide significant evidence at a 1%
significance level to conclude that the current mean credit card debt of American
households with credit card debts is higher than $15,706? Use both the p-value approach
and the critical-value approach.
Problem 4: In a random sample of 360 export managers in UK, 69 indicated some
measure of disagreement with this statement: the most important export market for UK
manufacturers in 10 years time will be the continent of Asia. Test at 5% level of
significance the null hypothesis that at least 25% of all members of this population
would disagree with this statement.
Problem 5: An educational study was designed to investigate the effectiveness of a
reading program of elementary age children. Each child was given a pre-test and post-
test. Higher post-test scores would indicate reading improvement. From a very large
population, a random sample of scores of pre-test and post test are as follows:
Child: 1 2 3 4 5 6 7
Pre-test: 40 36 32 38 32 33 35
Post-test: 48 42 36 37 43 38 45

(a) Test whether the program is effective at 5% level of significance. State the
necessary assumptions
b) Find 90% CI for the difference of the population means of scores. Based on CI,
would you able to have same conclusion that obtained in (a)?
c) Find p-valeu and interpret it

Problem 5: The communication minister wanted to know if there is difference between

the traffic speeding fines paid by the residents of Dhaka (DHK) and the residents of
Chittagong city (CTG). The independent random samples of the amount of fines paid by
the residents in each of the two cities are given below:
DHK : 100 125 135 128 140 142 128 137 156 142
CTG: 95 87 100 75 110 105 85 95 - -

(a) Test the minister claims at 5% level of significance. State necessary assumptions
(b) Find 90% CI for the difference between two population means of fines paid by the
residents. Based on CI, would you able to have same conclusion that obtained in
(a)?

Problem 6: A random sample 202 business faculties was asked if there should be a
required foreign language course for business majors. Of these sample members, 140 felt
there was a need for foreign language course. Test the null hypothesis at 5% level of
significance that at least 75% of all faculty members hold this view. State the necessary
assumptions on sample size.