Exercises: Chapter 4

1. The 92 million Americans of age 50 and over control 50 percent of all discretionary
income. AARP estimates that the average annual expenditure on restaurants and
carryout food was $1873 for individuals in this age group. Suppose this estimate is
based on a sample of 80 persons and that the sample standard deviation is $550.
a. At 95% confidence, what is the margin of error?
b. What is the 95% confidence interval for the population mean amount spent on
restaurants and carryout food?
c. What is your estimate of the total amount spent by Americans of age 50 and
over on restaurants and carryout food?
d. If the amount spent on restaurants and carryout food is skewed to the right,
would you expect the median amount spent to be greater or less than $1873?
2. A survey of 750 likely voters in Ohio was conducted by the Rasmussen Poll just
prior to the general election. The state of the economy was thought to be an important
determinant of how people would vote. Among other things, the survey found that 165
of the respondents rated the economy as good or excellent and 315 rated the economy
as poor.
a. Develop a point estimate of the proportion of likely voters in Ohio who rated
the
economy as good or excellent.
b. Construct a 95% confidence interval for the proportion of likely voters in Ohio
who rated the economy as good or excellent.
c. Construct a 95% confidence interval for the proportion of likely voters in Ohio
who rated the economy as poor.
d. Which of the confidence intervals in parts (b) and (c) is wider? Why?
3. Although airline schedules and cost are important factors for business travelers
when choosing an airline carrier, a USA today survey found that business travelers list
an airline’s frequent flyer program as the most important factor. From a sample of n =
1993 business travelers who responded to the survey, 618 listed a frequent flyer
program as the most important factor.
a. What is the point estimate of the proportion of the population of business
travelers who believe a frequent flyer program is the most important factor
when choosing an airline carrier?
b. Develop a 95% confidence interval estimate of the population proportion.
c. How large a sample would be required to report the margin of error of .01 at
95%
confidence? Would you recommend that USA today attempt to provide this
degree of precision? Why or why not?
4. Members of the millennial generation are continuing to be dependent on their
parents
(either living with or otherwise receiving support from parents) into early adulthood
(the
Enquirer, March 16, 2014). A family research organization has claimed that, in past
generations, no more than 30% of individuals aged 18 to 32 continued to be dependent
on their parents. Suppose that a sample of 400 individuals aged 18 to 32 showed that
136 of them continue to be dependent on their parents.
a. Develop hypotheses for a test to determine whether the proportion of
millennials continuing to be dependent on their parents is higher than for past
generations.
b. What is your point estimate of the proportion of millennials that are continuing
to be dependent on their parents?
c. What is the p-value provided by the sample data?
d. What is your hypothesis testing conclusion? use a =.05 as the level of
significance.
5. In Hamilton county, Ohio, the mean number of days needed to sell a house is 86
days
(Cincinnati Multiple Listing Service, April, 2012). Data for the sale of 40 houses in a
nearby county showed a sample mean of 80 days with a sample standard deviation of
20 days. Conduct a hypothesis test to determine whether the mean number of days
until a house is sold is different than the Hamilton county mean of 86 days in the
nearby county. use a = .05 for the level of significance, and state your conclusion.
6. At Western University the historical mean of scholarship examination scores for
freshman applications is 900. A historical population standard deviation s = 180 is
assumed known. each year, the assistant dean uses a sample of applications to
determine whether the mean examination score for the new freshman applications has
changed.
a. State the hypotheses.
b. What is the 95% confidence interval estimate of the population mean
examination score if a sample of 200 applications provided a sample mean x =
935?
c. Use the confidence interval to conduct a hypothesis test. using a = .05, what is
your conclusion?
d. What is the p-value?
 Exercise: Chapter 5

1. In a manufacturing process the assembly line speed (feet per minute) was thought to
affect the number of defective parts found during the inspection process. To test this
theory, managers devised a situation in which the same batch of parts was inspected
visually at a variety of line speeds. They collected the following data.
Line speed Number of Defective
Parts Found
20 21
20 19
40 15
30 16
60 14
40 17
a. Develop the estimated regression equation that relates line speed to the number
of defective parts found.
b. Provide an interpretation for the slope and y-intercept of the estimated
regression equation.
c. Use the estimated regression equation to predict number of defective
parts found for a line speed of 35 feet per minute.
d. Develop a 95% confidence interval for the slope of regression model.
e. At a 0.05 level of significance, determine whether line speed and number of
defective parts found are related.
f. Did the estimated regression equation provide a good fit to the data? Explain
g. Test for a significant relationship using the F test. What is your conclusion?
Use
a 0.05 level of significance.
h. Develop a 95% confidence interval to predict the mean number of defective
parts for a line speed of 50 feet per minute
2. Is the number of square feet of living space a good predictor of a house’s selling
price? The following data show the square footage and selling price for fifteen houses
in Winston Salem, North Carolina (Zillow.com, April 5, 2015).
Size (1000's sq. ft.) Selling Price ($1,000s)
1.26 117.5
3.02 299.9
1.99 139.0
0.91 45.6
1.87 129.9
2.63 274.9
2.60 259.9
2.27 177.0
2.30 175.0
 2.08 189.9
1.12 95.0
1.38 82.1
1.80 169.0
1.57 96.5
1.45 114.9
a. Develop a scatter diagram with square feet of living space as the independent
variable and selling price as the dependent variable. what does the scatter
diagram indicate about the relationship between the size of a house and the
selling price?
b. Develop the estimated regression equation that could be used to predict the
selling price given the number of square feet of living space.
c. At the .05 level, is there a significant relationship between the two variables?
d. Use the estimated regression equation to predict the selling price of a 2000
square foot house in winston Salem, North Carolina.
e. Do you believe the estimated regression equation developed in part (b) will
provide a good prediction of selling price of a particular house in winston
Salem, North Carolina? Explain.
f. Would you be comfortable using the estimated regression equation developed
in part (b) to predict the selling price of a particular house in Seattle,
washington? why or why not?
3. One of the biggest changes in higher education in recent years has been the growth
of
online universities. The Online Education Database is an independent organization
whose mission is to build a comprehensive list of the top accredited online colleges.
The following table shows the retention rate (%) and the graduation rate (%) for 29
online colleges.
College RR (%) GR (%)
Western International University 7 25
South University 51 25
University of Phoenix 4 28
American InterContinental University 29 32
Franklin University 33 33
Devry University 47 33
Tiffin University 63 34
Post University 45 36
Peirce College 60 36
Everest University 62 36
Upper Iowa University 67 36
Dickinson State University 65 37
Western Governors University 78 37
Kaplan University 75 38
Salem International University 54 39
 Ashford University 45 41
ITT Technical Institute 38 44
Berkeley College 51 45
Grand Canyon University 69 46
Nova Southeastern University 60 47
Westwood College 37 48
Everglades University 63 50
Liberty University 73 51
LeTourneau University 78 52
Rasmussen College 48 53
Keiser University 95 55
Herzing College 68 56
National University 100 57
Florida National College 100 61
a. Develop a scatter diagram with retention rate as the independent variable.
what does the scatter diagram indicate about the relationship between the two
variables?
b. Develop the estimated regression equation.
c. Test for a significant relationship. Use a = .05.
d. Did the estimated regression equation provide a good fit?
e. Suppose you were the president of South University. After reviewing the
results,
would you have any concerns about the performance of your university as
compared to other online universities?
f. Suppose you were the president of the University of Phoenix. After reviewing
the results, would you have any concerns about the performance of your
university as compared to other online universities?