Department of Economics

Thompson Rivers University

ECON 2330: ECONOMIC AND BUSINESS STATISTICS 2
Fall 2021 Assignment 1
Total Points: 70 (Weight: 5 percent)

Only hand-written assignment will be accepted. Scan your answers, make a PDF file for
each question, and upload it to Moodle Quiz. Due: Friday, October 8, 2021, at 11.55 PM.
Late submissions will not be accepted. Each question is worth 10 points.

Question 1

A machine is designed to fill automobile tires to a mean air pressure of 30 pounds per square
inch (psi). The manufacturer tests the machine on a random sample of 12 tires. The mean air
pressure for these 12 tires is calculated to be 30.5 psi. Fill pressures for the machine are known to
follow a normal distribution with standard deviation 1.2 psi.

(a) Construct a 90% confidence interval for the true mean fill pressure for this machine.

(b) Provide an interpretation of the confidence interval in (a).

(c) Conduct a hypothesis test at the 10% level of significance to determine whether there is
significant evidence that the true mean fill pressure differs from 30 psi. Show all your steps.

(d) Provide an interpretation of the P-value of the test in (c).

(e) Could the confidence interval in (a) have been used to conduct the test in (c)? Why or why
not? If it could be used, what would the conclusion be, and why? If it could not be used, explain
why not.

Question 2

A hospital administrator is concerned about the waiting times for patients in the emergency
room. She records the waiting times (in minutes) of a random sample of 32 patients, which are
shown below:

133 263 99 192 401 318 202 120 136 195 167 237 89
238 186 137 256 172 333 210 158 74 165 321 219 124
203 371 136 160 81 192

From these data, the sample mean is calculated to be 196.5 minutes. Suppose the standard
deviation of all waiting times in this emergency room is known to be 78.4 minutes.

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(a) We have no knowledge about whether waiting times follow a normal distribution. Why is it
nevertheless appropriate to use inference methods which rely on the assumption of normality?

(b) Construct a 97% confidence interval for the true mean emergency waiting time for this
hospital. Show how you find the critical value.

(c) Provide an interpretation of the interval in (b).

(d) Conduct a hypothesis test at the 5% level of significance to determine whether the true mean
emergency room waiting time differs from 3 hours (i.e., 180 minutes). Show all your steps,
including the hypotheses, the calculation of the test statistic and P-value, and a properly worded
conclusion.

(e) Interpret the meaning of the P-value you calculated in (d).

(f) Could the confidence interval in (b) have been used to conduct the test in (d)? Why or why
not? If it could be used, what would the conclusion be, and why? If it could not be used, explain
why not.

Question 3

A cigarette company claims that the true mean tar content for its cigarettes is less than 15 mg.
The tar contents (in mg) for a sample of 10 randomly selected cigarettes are shown below:

14.3 14.7 15.2 14.8 15.1 14.6 14.8 15.6 14.5 15.1

Tar content for this company's cigarettes is known to follow a normal distribution with standard
deviation 0.3 mg.

(a) Conduct a hypothesis test at the 10% level of significance to verity the company's claim.
Show all your steps.

(b) Provide an interpretation of the P-value of the test in (a).

Question 4

The GPAs for a random sample of 30 students at a large university are recorded. These 30
students have a mean GPA of 2.92. GPAs of students at the university are known to follow a
normal distribution with standard deviation 0.55.

Conduct a hypothesis test at the 5% level of significance to determine whether the true mean
GPA of students at the university differs from 3.1. Show all your steps.

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Question 5

Prior to distributing a large shipment of bottled water, a beverage company would like to
determine whether there is evidence that the true mean fill volume of all bottles differs from 600
ml, the amount stated on the label. A random sample of 11 bottles is selected. The sample has a
mean of 598.8 ml and a standard deviation of 1.7 ml.

(a) Construct a 90% confidence interval for the true mean fill volume of all bottles of water in
the shipment.

(b) Conduct a hypothesis test at the 10% level of significance to determine whether the true mean
fill volume in the shipment differs from 600 ml.

Question 6

A polling firm would like to estimate the true proportion of all Canadian voters who support a
national gun registry. They survey a sample of 500 voters, 274 of whom support a gun registry.

(a) Construct a 95% confidence interval for the true proportion of Canadian voters who support a
gun registry.

(b) Provide an interpretation of the interval in (a).

(c) Conduct a hypothesis test at the 5% level of significance to determine whether there is
evidence that most Canadian voters support a gun registry. Show all your steps.

(d) Provide an interpretation of the P-value of the test in (c).

Question 7

In a random sample of 250 University of Manitoba students, 98 of them say they take a bus to
the university.

(a) Construct a 99% confidence interval for the true proportion of U of M students who take a
bus to the university.

(b) Provide an interpretation of the interval in (a).

(c) Conduct a hypothesis test at the 1% level of significance to determine whether there is
evidence that the true proportion of U of M students who take a bus to the university differs from
0.35. Show all your steps.

(d) Provide an interpretation of the P-value of the test in (c).