Midterm Examination Spring 2015

1. Two thousand numbers are selected randomly; 960 were even numbers.

a. State the hypotheses to determine whether the proportion of odd numbers is significantly
different from 50%.
b. Compute the test statistic.
c. At 90% confidence using the p-value approach, test the hypotheses.

ANSWER:
a. Ho: P = 0.5
Ha: P ≠ 0.5
b. Z = 1.79
c. p-value = .0734 < 0.10; reject H0

2. In the last presidential election, a national survey company claimed that no more than 50% (i.e., ≤ 50%) of all registered
voters voted for the Republican candidate. In a random sample of 400 registered voters, 208 voted for the Republican
candidate.

a. State the null and the alternative hypotheses.

b. Compute the test statistic.
c. At 95% confidence, compute the p-value and test the hypotheses.

ANSWER:

a. Ho: P ≤ 0.5
Ha: P > 0.5
b. Z = 0.8
c. p-value = 0.2119 > 0.05; do not reject Ho.

3. An automobile manufacturer stated that it will be willing to mass produce electric-powered cars if more than 30% of potential
buyers indicate they will purchase the newly designed electric cars. In a sample of 500 potential buyers, 160 indicated that they
would buy such a product.

a. State the hypotheses for this problem

b. Compute the standard error of .
c. Compute the test statistic.
d. At 95% confidence, what is your conclusion? Should the manufacturer produce the new electric powered
car?

ANSWER:

a. Ho: P ≤ 0.3
Ha: P > 0.3
b. 0.0205 c.
Z = 0.98
d. p-value = 0.1635 <0.05; do not reject Ho; no, the manufacturer should not produce the cars.
4. It is said that more males register to vote in a national election than females. A research organization selected a random
sample of 300 registered voters and reported that 165 of the registered voters were male.

a. Formulate the hypotheses for this problem.

b. Compute the standard error of .
c. Compute the test statistic.
d. Using the p-value approach, can you conclude that more males registered to vote than females? Let α =
.05.

ANSWER:

a. Ho: P ≤ 0.5
Ha: P > 0.5
b. 0.0289 c.
Z = 1.73
d. p-value = 0.0418 < .05; reject Ho; yes, more males than females registered to vote.

5. Consider the following hypothesis test:

Ho: μ = 10
Ha: μ ≠ 10

A sample of 81 provides a sample mean of 9.5 and a sample standard deviation of 1.8.

a. Determine the standard error of the mean.

b. Compute the value of the test statistic.
c. Determine the p-value; and at 95% confidence, test the above hypotheses.

ANSWER:
a. 0.2
b. t = -2.5
c. p-value is between .01 and .02 (two tail test); reject Ho

6. Consider the following hypothesis test:

Ho: μ ≥ 14
Ha: μ < 14

A sample of 64 provides a sample mean of 13 and a sample standard deviation of 4.

a. Determine the standard error of the mean.

b. Compute the value of the test statistic.
c. Determine the p-value; and at 95% confidence, test the above hypotheses.

ANSWER:
a. 0.5
b. t = -2
c. p-value is between .01 and .025; reject Ho

7. Consider the following hypothesis test:

 Ho: μ ≥ 40
Ha: μ < 40

A sample of 49 provides a sample mean of 38 and a sample standard deviation of 7.

a. Determine the standard error of the mean.

b. Compute the value of the test statistic.
c. Determine the p-value; and at 95% confidence, test the above hypotheses.

ANSWER:
a. 1
b. t = -2
c. p-value is between .025 and .05; reject Ho

8. Consider the following hypothesis test:

Ho: μ ≤ 38
Ha: μ > 38

You are given the following information obtained from a random sample of six observations. Assume the population has a
normal distribution.

X
38
40
42
32
46
42

a. Compute the mean of the sample

b. Determine the standard deviation of the sample.
c. Determine the standard error of the mean.
d. Compute the value of the test statistic.
e. At 95% confidence using the p-value approach, test the above hypotheses.

ANSWER:
a. 40
b. 4.73
c. 1.93
d. 1.036
e. p-value is between 0.1 and 0.2; do not reject Ho.
9. Consider the following hypothesis test:

Ho: P ≤ 0.8
Ha: P > 0.8

A sample of 400 provided a sample proportion of 0.853.

a. Determine the standard error of the proportion.

b. Compute the value of the test statistic.
c. Determine the p-value; and at 95% confidence, test the above hypotheses.

ANSWER:
a. 0.02
b. Z = 2.65
c. p-value = 0.004; reject Ho

10. You are given the following information obtained from a random sample of 5 observations. Assume the population has a
normal distribution.

20 18 17 22 18

You want to determine whether or not the mean of the population from which this sample was taken is significantly less than
21.

a. State the null and the alternative hypotheses.

b. Compute the standard error of the mean.
c. Determine the test statistic.
d. Determine the p-value and at 90% confidence, test whether or not the mean of the population is
significantly less than 21.

ANSWER:

a. Ho: μ ≥ 21
Ha: μ < 21
b. 0.8944
c. t = -2.236
d. p-value is between .025 and .05; reject Ho, the mean is significantly less than 21.
11. Consider the following hypothesis test:

Ho: p = 0.5
Ha: p ≠ 0.5

A sample of 800 provided a sample proportion of 0.58.

a. Determine the standard error of the proportion.

b. Compute the value of the test statistic.
c. Determine the p-value, and at 95% confidence, test the hypotheses.

ANSWER:
a. 0.01768
b. Z = 4.53
c. p-value is almost zero; reject Ho

12. You are given the following information obtained from a random sample of 4 observations. 25

47 32 56

You want to determine whether or not the mean of the population from which this sample was taken is significantly different from
48. (Assume the population is normally distributed.)

a. State the null and the alternative hypotheses.

b. Determine the test statistic.
c. Determine the p-value; and at 95% confidence test to determine whether or not the mean of the
population is significantly different from 48.

ANSWER:
a. Ho: μ = 48
Ha: μ ≠ 48
b. t = -1.137
c. p-value is between 0.2 and 0.4 (two tailed); do not reject Ho.
13. Confirmed cases of West Nile virus in birds for a sample of six counties in the state of Georgia are shown below.

County Cases
Catoosa 6
Chattooga 3
Dade 3
Gordon 5
Murray 3
Walker 4

We are interested in testing the following hypotheses regarding these data: Ho: μ ≤
3
Ha: μ > 3

a. Compute the mean and the standard deviation of the sample.

b. Compute the standard error of the mean.
c. Determine the test statistic.
d. Determine the p-value and at 95% confidence, test the hypotheses.

ANSWER:

a. 4 and 1.265 (rounded)

b. 0.5164
c. t = 1.94 (rounded)
d. p-value is between 0.05 and 0.1; reject Ho and conclude that the mean of the population is
significantly more than 3.

14. A sample of 64 account balances from a credit company showed an average daily balance of $1,040. The standard deviation
of the population is known to be $200. We are interested in determining if the mean of all account balances (i.e., population
mean) is significantly different from $1,000.

a. Develop the appropriate hypotheses for this problem.

b. Compute the test statistic.
c. Compute the p-value.
d. Using the p-value approach at 95% confidence, test the above hypotheses.
e. Using the critical value approach at 95% confidence, test the hypotheses.

ANSWER:

a.Ho: μ = 1000
Ha: μ ≠ 1000
b. 1.60
c. 0.1096
d. The p-value = 0.1096, which is larger than α = 0.05 (95% confidence). Hence, the null hypothesis is not
rejected; and we conclude that there is not sufficient evidence to indicate that the advertising campaigns
have been effective.
e. In Part b, the Z statistic was computed and its value was 1.60. Since 1.60 is between -1.96 and
1.96, the null hypothesis cannot be rejected; and we conclude that there is no evidence that the mean is
significantly different from $1,000.

15. Consider the following hypotheses test.

 Ho: μ ≥ 80
Ha: μ < 80

A sample of 121 provided a sample mean of 77.3. The population standard deviation is known to be 16.5.

a. Compute the value of the test statistic.

b. Determine the p-value; and at 93.7% confidence, test the above hypotheses.
c. Using the critical value approach at 93.7% confidence, test the hypotheses.

ANSWER: a. Z = -1.8
b. p-value = 0.0359 < 0.063, reject Ho
c. test statistic Z = -1.8 < Z.063 = -1.53, reject Ho

16. Automobiles manufactured by the Efficiency Company have been averaging 42 miles per gallon of gasoline in highway
driving. It is believed that its new automobiles average more than 42 miles per gallon. An independent testing service road-
tested 36 of the automobiles. The sample showed an average of 42.8 miles per gallon with a standard deviation of 1.2 miles
per gallon.

a. With a 0.05 level of significance using the critical value approach, test to determine whether or not the
new automobiles actually do average more than 42 miles per gallon.
b. What is the p-value associated with the sample results? What is your conclusion based on the
p-value?

ANSWER:
a. Ho: μ ≤ 42 Ha: μ > 42
b. Since t = 4.0 > 1.690, reject Ho and conclude that the new cars average more than 42 miles per gallon.
c. p-value < 0.005, therefore reject Ho (area to the right of t = 4.0 is almost zero)

17. The average starting salary of students who graduated from colleges of Business in 2009 was $48,400. A sample of 100
graduates of 2010 showed an average starting salary of $50,000. Assume the standard deviation of the population is known to
be $8,000. We want to determine whether or not there has been a significant increase in the starting salaries.

a. State the null and alternative hypotheses to be tested.

b. Compute the test statistic.
c. The null hypothesis is to be tested at 95% confidence. Determine the critical value for this test.
d. What do you conclude?
e. Compute the p-value.

ANSWER:

a. Ho: μ ≤ 48,400
Ha : μ > 48,400
b. Test Statistic Z = 2.0
c. Critical Z = 1.64
d. Reject Ho and conclude that there has been a significant increase.
e. P-value = .0228
18. The average price of homes sold in the U.S. in the past year was $220,000. A random sample of 81 homes sold this year
showed an average price of $210,000. It is known that the standard deviation of the population is $36,000. At 95% confidence
test to determine if there has been a significant decrease in the average price homes.

a. State the null and alternative hypotheses to be tested.

b. Compute the test statistic.
c. Determine the critical value for this test.
d. What do you conclude?
e. Compute the p-value.

Ho: μ ≥ 220,000
ANSWER: a.
Ha : μ < 220,000
b. Test statistic Z = -2.5
c. Critical Z = -1.64
d. Reject Ho and conclude that there has been a significant decrease.
e. P-value = 0.0062
19. Three different brands of tires were compared for wear characteristics. From each brand of tire, ten tires were randomly
selected and subjected to standard wear-testing procedures. The average mileage obtained for each brand of tire and
sample variances (both in 1,000 miles) are shown below.

Brand A Brand B Brand C

Average Mileage 37 38 33
Sample Variance 3 4 2

At 95% confidence, test to see if there is a significant difference in the average mileage of the three brands.

ANSWER:
SSTR = 140 MSTR = 70
SSE = 81 MSE = 3
F = 23.3; p-value is less than .01; reject H0 (critical F = 3.35)

20. Nancy, Inc. has three stores located in three different areas. Random samples of the sales of the three stores (In
$1,000) are shown below.

Store 1 Store 2 Store 3

46 34 33
47 36 31
45 35 35
42 39
45

a. Compute the overall mean .

b. At 95% confidence, test to see if there is a significant difference in the average sales of the three
stores.

ANSWER: a. 39

b.

ANOVA
 Source of Variation SS df MS F P-value F critical
Between Groups 324 2 162 40.5 0.00003 4.26
Within Groups 36 9 4
Total 360 11
F = 40.5; p-value is less than 0.01; reject H0 (critical F = 4.26)

21. In a completely randomized experimental design, 11 experimental units were used for each of the 4 treatments. Part of
the ANOVA table is shown below.

Source of Degrees of Mean

Variation Sum of
Freedom Square F
Between Squares
Treatments 1500 _____? _____? _____?
Within
Treatments _____? _____? _____?
Total 5500

Fill in the blanks in the above ANOVA table.

ANSWER:

Source Sum of
of Variation Squares df Mean Square F
Between 1500 3 500 5
Error 4000 40 100
Total 5500 43
22. Samples were selected from three populations. The data obtained are shown below.

Sample 1 Sample 2 Sample 3

10 16 15
13 14 18
12 15
13

Sample Mean 12 15 16.5

Sample Variance 2.0 1.0 4.5

a. Compute the overall mean .

b. Set up an ANOVA table for this problem.
c. At 95% confidence, test to determine whether there is a significant difference in the means of the three
populations. Use both the critical and p-value approaches.

ANSWER: a. 14

b.
ANOVA
Source of Variation SS df MS F P-value F critical
Between Groups 31.5 2 15.750 7.56 0.0229 5.14
Within Groups 12.5 6 2.083
Total 44.0 8
c. Test statistic F = 7.56; p-value is between .025 and .05 (actual p-value = 0.0229); reject H0 (critical
F = 5.14)
23. In a completely randomized experimental design, 14 experimental units were used for each of the 5 levels of the factor
(i.e., 5 treatments). Fill in the blanks in the following ANOVA table.

Source of Degrees of Mean

Variation Sum of
Freedom Square F
Between Squares
Treatments _____? _____? 800?
_____
Error (Within
Treatments) _____? _____? _____

Total 10600? _____?

ANSWER:

Source of Degrees of Mean

Variation Sum of
Freedom Square F
Between Squares
Treatments 3200 4 800
7.027
Error (Within
Treatments) 7400 65 113.85
Total 10600 69
24. Random samples of several days’ sales of handguns per day in three different states are shown below. We are interested
in determining whether or not there is a significant difference in the average sales of guns in the three states

Tennessee Kentucky Texas

12 15 16
13 19 18
17 20
10
18

a. Compute the overall mean .

b. State the null and alternative hypotheses to be tested.
c. Show the complete ANOVA table for this test including the test statistic.
d. The null hypothesis is to be tested at 95% confidence. Determine the critical value for this test. What do
you conclude?
e. Determine the p-value and use it for the test.
ANSWER: a. 15.8
b. Ho: There is no significant difference among the means of the
populations.
Ha: At least one mean is different from the others.
c.

Source of Variation SS df MS F
Between Groups 33.6 2 16.8 1.897
Within Groups 62 7 8.857
Total 95.6 9
d. Critical F = 4.74. Since 1.897 < 4.74 do not reject Ho and conclude there is no evidence of any
difference among the means.

e. p-value > 0.1, therefore do not reject Ho (actual p-value using Excel is 0.2196)
 25. Information regarding random samples of annual salaries (in thousands of dollars) of doctors in three different
specialties is shown below.

Pediatrics Radiology Pathology

Sample size 12 10 11
Average salary 120 186 240
Sample variance 16 18 20

a. Compute the overall mean .

b. State the null and alternative hypotheses to be tested.
c. Show the complete ANOVA table for this test including the test statistic.
d. The null hypothesis is to be tested at 95% confidence. Determine the critical value for this test. What do
you conclude?
e. Determine the p-value and use it for the test.
ANSWER: a. 180
b. Ho: There is no significant difference among the means of the
populations.
Ha: At least one mean is different from the others.
c.

Source of Variation SS df MS F
Between Groups 83160 2 41580 2318.59
Within Groups 538 30 17.933
Total 83698 32
d. Critical F = 3.32. Since 2318.59 > 3.32, reject Ho and conclude at least one mean is different from
the others.

e. p-value < 0.01, therefore reject Ho (actual p-value using Excel is almost zero)
 26. Information regarding the ACT scores of samples of students in four different majors is given below.

Majors
Management Marketing Finance Accounting
29 22 29 28
27 22 27 26
21 25 27 25
28 26 28 20
22 27 24 21
28 20 20 19
28 23 20 27
23 25 30 24
28 27 29 21
24 28 23
29 27
31 27
24

Sums 318 245 234 312

Means 26.50 24.50 26.00 24.00
Variances 10.09 6.94 14.50 9.00

a. Set up the ANOVA table for this problem.

b. At 95% confidence test to determine whether there is a significant difference in the means of the three
populations.

ANSWER: a.ANOVA
Source of
Variation SS df MS p-value F F critical
Between Groups 49.659 3 16.553 0.1897 1.6657 2.84
Within Groups 397.500 40 9.937
Total 447.159 43

b. Since the p-value 0.1897 > 0.05, do not reject Ho. (Also the test statistic F = 1.6657 < 2.84.)
 27. Information regarding the ACT scores of samples of students in three different majors is given below.

Major
Management Finance Accounting
28 22 29
26 23 27
25 24 26
27 22 28
21 24 25
19 26 26
27 27 28
17 29 20
17 28 20
23 24
28
28
29

Sums 230 225 338

Means 23 25 26
Variances 18 6.75 9.33

a. Set up the ANOVA table for this problem.

b. At 95% confidence test to determine whether there is a significant difference in the means of the three
populations.

ANSWER:

a. ANOVA

Source of Variation SS df MS p-value F F critical

Between Groups 51.468 2 25.73 0.1248 2.27 3.33
Within Groups 328.000 29 11.31

Total 379.468 31

b. Since the p-value = 0.1248 > 0.05 do not reject Ho. (Also test statistic F = 2.27 < 3.33)
28. The manager of Ahmadi Corporation, wants to determine whether or not the type of work schedule for her employees has
any effect on their productivity. She has selected 15 production employees at random and then randomly assigned 5
employees to each of the 3 proposed work schedules. The following table shows the units of production (per week) under
each of the work schedules.

Work Schedule (Treatments)

Schedule 1 Schedule 2 Schedule 3
50 60 75
60 65 75
70 65 55
40 58 40
45 57 55

a. Compute the overall sample mean .

b. At 95% confidence, determine if there is a significant difference in the mean weekly units of production
for the three types of work schedules.

ANSWER: a. 58
b. ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 190 2 95 0.7412 0.4971 3.89
Within Groups 1538 12 128.17

Total 1728 14
F = 0.7412; p-value is greater than 0.05; do not reject H0 (critical F = 3.89)
 29. Six observations were selected from each of three populations. The data obtained is shown below.

Sample 1 Sample 2 Sample 3

31 31 37
28 32 36
34 33 39
32 30 40
26 32 35
29 34 35

a. Compute the overall sample mean .

b. Test at the α = 0.05 level to determine if there is a significant difference in the means of the three
populations.

ANSWER: a. 33
b. ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 156 2 78 15.81 0.0002 3.68
Within Groups 74 15 4.93

Total 230 17
F = 15.81; p-value (0.0002) is less than 0.01; reject H0 (critical F = 3.68)
30. The test scores for selected samples of statistics students who took the course from three different instructors are shown
below.

Instructor A Instructor B Instructor C

81 90 85
62 55 90
82 84 90
87 91 95
73 85 80

At α = 0.05, test to see if there is a significant difference among the averages of the three groups. Show the complete
ANOVA table.

ANSWER: ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 310 2 155 1.33 0.2997 3.89
Within Groups 1394 12 116.17

Total 1704 14

F = 1.33; p-value (0.2997) is greater than 0.1; do not reject H0

31. The following information regarding the yearly salaries (in $1,000) of CEO’s in 2010 and 2009 are provided.

Year 2010 Year 2009

Sample size 190 145
Sample Mean 560 540
Population Standard Deviation 80 90

a. At 95% confidence, perform a test to determine if there has been a significant increase in the
salaries of CEO’s. Use the Critical Value Approach.
b. Compute the p-value.

H :μ - μ2009 ≤ 0
ANSWER: a. o 2010
Ha: μ2010 - μ2009 > 0
critical Z = 1.645; test stat Z = 2.11
Since 2.11 > 1.645, reject Ho and conclude that there has been a significant increase.
b. p-value = 0.0174
 32. The management of Chattanooga Paper Corporation wants to determine whether there is a significant difference in the
thickness of papers produced at their two existing plants. The following data has been accumulated for this test. The
degrees of freedom (df) for this problem are given to be df = 80.

Plant 1 Plant 2
Sample Mean 30.8 30.0
Sample Standard Deviation 8.0 9.0
Sample Size 55 41

a. Compute a 95% confidence interval for the difference in the average thickness of papers produced
at the two plants.
b. Is there conclusive evidence that the average thickness in one plant is significantly more than the
other? If yes, which plant? Explain, using the results of part (a). Do not perform any test.

ANSWER: a. interval: -2.73 to 4.33

b. Since the interval ranges from negative to positive, there is no conclusive evidence.

33. In order to determine whether or not a special tutoring service improves the scores of students in a Business Statistics
examination, a sample of 6 students were given the exam before and after using the tutorial service. The results are shown
below.

Let d = Score After - Score Before.

Student Score Before Score After

A 80 84
B 82 86
C 75 82
D 78 83
E 90 95
F 85 84

At α = 0.10, test to see if the tutorial service actually increased scores on the examination.

ANSWER: Ho: μd ≤ 0
Ha: μd > 0
critical t = 1.476; test stat t = 3.66
Reject Ho and conclude tutorial services improved the scores.
 34. The following information shows the yearly salaries (in $1,000) of samples of physicians for 2013 and 2012.

(1) (2)
Year 2013 Year 2012
Sample Size 280 244
Sample Mean 790 685
Population Standard Deviation (σ) 100 110

We want to perform a test to determine if there has been a significant increase in the salaries of physicians. In your
computations, please use “1” to represent year 2013.

a. State the null and alternative hypotheses to be tested. H0:

Ha:
b. Compute the test statistic.
c. The null hypothesis is to be tested at 95% confidence. Determine the critical value from the table.
d. What do you conclude? Fully explain and answer the question.
e. Compute the p-value.

ANSWER:
a. H0: μ 1 - μ2 ≤ 0
Ha: μ1 - μ 2 > 0
b. Z=11.369
c. 1.645
d. Reject H
d. e. Almost zero
 35. The management of Chattanooga Paper Corporation wants to determine whether there is a significant difference in the
thickness of papers produced at their two existing plants. The following data has been accumulated for this test The degrees of
freedom (df) for this problem are df = 51.

Plant 1 Plant 2
23.6 23.1
Sample Mean
2 25 4
Sample Variance (S )
Sample Size 42 53

a. Compute a 95% confidence interval for the difference in the average thickness of papers produced
at the two plants. Please use the same order as given above.
b. Is there conclusive evidence that the average thickness in one plant is significantly more than the other?
If yes, which plant? Explain, using the results of part (a). Do not perform any tests.

ANSWER: a. -1.144 to 2.144

b. Since the interval for the difference in means ranges between negative to positive, there is
no conclusive evidence.

36. Samples were taken from the morning (AM) and the afternoon (PM) shifts of a production process. The results are
shown below.

(1) (2)
AM Shift PM Shift
Sample Size 900 800
Sample Mean 810 600
Population Variance 144 196

Determine the following for the above data.

a. Standard error of the mean
b. Point estimate of the difference between the two means.
c. Develop a 97% confidence interval estimate for the difference between the two means.

ANSWER: a. 0.6364
b. 20
d. 18.7527 to 21.247

37. (Two Way-ANOVA) Manager feels that number of units sold depends both on salesperson's ability and on the brand being sold.
For the sox most recent monthly periods, the number of units sold in the downtown store were recorded.
Brand Sold A B C D
1 4 3 8 2
5 5 9 0
6 7 10 1
8 3 12 5
3 4 9 1
5 2 13 3
2 5 9 8 3
 7 9 7 2
7 9 9 5
8 7 10 4
6 5 8 1
4 8 6 6

38. (Two Way-ANOVA) Let's determine if age and level of education have an effect on income.
Age group High school Some college College graduate
18 to < 30 25000 36250 42500
31450 39400 46000
27500 35450 47250
30 to < 50 28000 46250 52600
30950 44400 56700
26250 48450 57750
50+ 35000 46250 62800
38250 49400 66700
37700 55450 70250