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UNIVERSITY OF ZAMBIA
DEPARTM,:~IT OF ECONOMICS
ECN 2331 STATISTICS: THEOHY AND TECHNIQUES FOR ECONOMICS
Please read the questions and instructions carefully! Duration: 1hour 30 minutes
Read the following statements carefully and state whether each one is True, False or Uncertain
(ambiguous). Briefly explain and justify your answers.
Economics being a highly quantitative science, much of the evidence has to be furnished in the form of
unmeasurable data that we commonly refer to as 'sl;Jtistics'.
(a) The law of Demand, and Supply a common law in economics, says that when the price of a good falls,
the quantity demanded of that good will go up, other factors such as income, tastes and preferences,
prices of related commodities etc remainin[I constant. One may predict by how much in percentages the
quantity demanded of that good may go up after controlling for all other factors and considering past
trends but the predicted value will still be subject to error.
(i) Is the relationship between price change and change in quantity demanded deterministic or
stochastic?
(ii) What do you ur.derstand by the term 'stochastic'?
(b) Every distribution of data in statistics has lhe lower and upper end , it has the left and right side with
measurements defining the middle area. The distribution has a high peak if it is more peaked than a
normal curve and is called platykurtic.
(c) There are several methods used to calculate the coefficient of correlation and one such method is the
Pearson's Coefficient of Correlation. Pearson's Coefficient of Correlation is obtained by using absolute
deviations in place of relative deviations.
Question Two
A sample of 25 workers ·11orking for Duroc Pork Processing Company receive hourly wages given in Table 1.
Table 1
Hourly Waqe 3.50 - 3.59 3.60 - 3 69 3.70 - 3.79 3 60- 3.69 3.90 - 3 99 4.00 - 4.09 410 - 4.19 420 - 4 29
Absolute 1 2 2 4 5 6 3 2
Freouencv
(a) Find the sample arithmetic mean, median an,; mode for the grouped data given in Table 1.
(bl Compare the c1dvantages and disadvantage:; of the (i) arithmetic mean (ii) median and (iii) mode as
measures of central tendency.
(c) Compute the variance and standard deviation for the grouped data given in Table 1.
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\e' S...lSe-:i oo y~ al'S\\~ i'I td' . .:x~ 00 ~ s,-.~:n;.- aro ~,edn ess o: the dism~
- tc< me data
~ il T~ l .
~ Questio n Three
':---....
~•. Jooiiis ~ 'lls. a LUSM.a Based ~ ~fw'/9 C~'IT'.fdn~. sen: s oi ilS a--ror,, ~~
tor a ooe-mor.m
~ c..~ at mt> ~r~ ot ~ }-e-.ar wt-Jch "'aS ~~ and after the traring
~3cll of the S ~ers 'Ae.re
o,:,.~yed in ooe- Ori ~ ta..-tooes a!\i n." fl.~ tor p e r ~ ~ :nst set targets.. The data in Table 2 show rre
ra~ ~ of ~ • Oltets ;-.).11 ~ training aNl n fa~:sal OU1PUt tperioor,ancel from
~ the ~~- ~ that tnt> 'I\OO..ers \\~;e ran.,~ ~ t-J the resu":s of the tran.ng tacro,y lJIXXl reMr
the
assessmefll 'Mth t
being the ~hes( tthus \ = rar-~ 0' ~ ~er ~:00 ro traililg assessrren!l
the \\M-efS a! mt> toc..~ . - and Y= indi\'idual OU!pU! ot
- -
Ta!)le l .
5 o 7 8
\~' =J°t"er P: a tre~ ~-i,e a")(! commem .:-n :ne S<ia"€ oi me sc-.atter diagram and the uend ·"le.
ne s::.a::e-· diagrc!71 inm:a:e atnn the -eiaxinst·:) ~:'l,een \
\\'ha: ::es
aoo )?
1.:-' .:: :,r::i_:? :ne '.llb,,,ng
,-1 Ge-;:i.~ Mear 'of ' · and
(ti) nam-orut Mean for ' .
(d) Ca'.:,.t,a:e me staooaid de,iaoor J i \ and )
Question Four
(el Using Bayes' theorem, find the probability that :. defective bulb picked at
ra~001 from the 24-hoor output
of 160 bulbs was produced by the 0) morning s:iift and 0Q by the e,-enrng shift.
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.1.0
THE UNIVERSITY OF ZAMOIA
DEf t .'.UMENT OF ECONOMICS
ECN 2331 STATISllCS: lllEORY ANO TECliNIOULS I Oil LCOUOMIC.:.
Question One
A nanufJcture of pa:cnl mcdicinr ci.11111s th.111hr mrd1cino h 'lO pl.lrr.,:nt e:lh:r.11v1: 1n r1:lt1: 11r,1 r,:;1r, f,,r ;, ;,•:· '/~ ,;1
14 hOurs In a s;imrl r of ~:>O llt-'Oplr 1\1,o hr1d pr1111, tlw 111cdlcu1c rolloved p:11n fr,r tt11: ril;,l!:1J (,':rV/ J ir, '/ /'/ v'>1,;.A1:
Dcterrr·nc 11.- 'iet"tcr !"Ir 'T'.11ul.1ctur~r·~ rt.um 1s IPg1tu11alr by undorlak1nu lhrJ fr,llr111irv1 •,11:v.
1.11 De, r '~r the Ji';'rt'rn,11~ st,,tl·mcnl ol hyµolhcscs (Both null and alt1:rn<l11: hyr,<Jlh'!'./:',J.
[5 ,~,.,.·,]
(~' Ca -~ J!l' l'k' :::· stJt1st1c at 5 and 1 percent level of significance; .
[8 l.tlr'f',]
- - rs: ~ "l\Tl,-:tx-ses. What 1s your conclusion?
[10 l,far',-:,)
-- ~ '.' - ~:-, :-· :..; -:., :_·e h3s h,red you as a consultant to investigate whether women in Cr.i.;112
• ·-, - -: . · : __ - ''" Pr:::. r:e ere more i:1clinec to belong to a cooperative than men. You tr.~r
-- , :t ·: :· ·.:--. -:0,. =··· 1-:C pe::iple on 1, hether they belonged to a cooperaLve or nol Tr.e ca:.5 ,:a
s, :-.-.- ,- - c.J :: ,
Member:;~p to a Cooperative
Member Not a member Total
23
- 24 47 I
~ e'ic e 28 25 53
Tota l 51 49 I 100 I
-
_·t _, ~,/ t. ~c· ::t lrcm i"c o.,ia in Table 1 to suggest that \\Orren are IT'Ye I ,ey :c
.. • • c: ,. , c,,•c.' "e:rt /,rca of LusaJ..a Province than ~lcn by ur-dena,.ng :'le ':>..ov. _..,g
12 Ma~sl
IQ [ , ,.,,'O I rr(,I' l(ll C ltl1t iJ Ill (lll
[6 11\art-s}
'
Question Three
Table 2.
X; 3 12 6 20 14
_ y_.:_i_ _ _ 55_ _ _ _ _
40_ _ _ _5_5_ _ _ _ _1_0_ _ _ _ _ _1_5_ __
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THEUNNERSITYOFZAMB~
DEPARTMENTOFECONOM~S
ECN 2331 STATISTICS: THEORY AND TECHNIQUES FOR ECONOMICS
SECTION A (Answer all questions In this Section - Make Up for Test One) (60 Marks]
Question One
.\ man..li't survti} was conducted in four cities in Zambia in order lo find out the preference for brand A soup.
(b) \\hat is the probability that a consumer preferred brand A and was from Ndola? (6 Marks]
(c) \\ nat is the probability that a consumer preferred brand A. given that he/she was from Ndola?
[6 Marks]
(d) Gi\ t>l1 that a consumer preferred brand A, what is the probability that he/she was from Livingstone?
[6 Marks]
(e) Is the probability of preference for brand A and probability of living in Lusaka independent?
[6 Marks]
Question Two
Table 1 gi\es the frequenc11 for petrol prices al 48 stations in Lusaka City.
(b) Compuie the follo\,~ng for the grouped data in Table 1: (6 Marks]
\Cl Find the (i) the first quartile, (ii) the second quartile, and (iii) the third quartile for the grouped data in Table
1. [6 Marks]
(d} Find the average deviation for the grouped data in Table 1.
[2 Marks]
(e} Calculate the variance and the standard deviation for the frequency distribution of petrol prices in Table
1 [4 Marks]
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..' ~,,,, ,,.,, ' '
'
,,. ,·,,,
' ,I ·' '·• ' ' '
Question One
'
668 689 715
I ;
,
6? 682 710 708 6~
/ J I
- I-
SECTION B (50 Marks)
Question Three
(a) Identify and list the four desirable properties of "good" estimators.
[4 Marks]
(b) State the steps you would follow in constructing a confidence interval for the data.
[5 Marks]
(c) Construct a 95 percent confidence interval for the true mean population per village.
Comment on your answer.
[8 Marks]
(d) If the Researcher decides to double the sample size from the initial 25 villages and still
obtain the same mean population per village of 628 with a standard deviation of 230.
Now construct a 99 percent confidence interval for the true mean population per village.
Comment on your answer.
(8 Marks)
Question Four
The following data were collected on the height (Centimeters) and weight (Kg) of women
swimmer s.
Table 2.
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(d) Use the least squares method to develop the estimat ed regre~si on equatio
n by, co~~u~ ing
the values of h and h [/-lint: the estimated regression equallon takes
0 1 the general, Y - ho
+ h,x].
(IO Marks]
(e) Provide an interpre tation for the slope of the estimat ed regressi on equatio
n.
(4 Marks]
(f) If a swimm er's height is I OS centime tres, what would you estimat e
her weight to be?
[5 Marks]
Question Five
Grade ----- -
1.5 - 2.4 2.5 - 3.4 3.5 - 4.4 4.5 - 5.4 5.5 -6.4 6.5 - 7.4 7.5 - 8.4 8.5 - 9.4 9.5-10.4
Class Mid int 2 3 4 s 6 7 8 9 10
Absolute 3 3 5 5 6 g 4 4 2
Frequency
---- - - - - --- -
(a) Calcula te the sample arithme tic mean, median and mode for the grouped
data given in
Table 3.
[5 Marks]
(b) Compu te the varianc e and standard deviatio n for the grouped data given
in Table 3.
[5 Marks]
(c) What is the advanta ge of standard deviatio n over variance as measure
s of variabil ity?
[2 Marks]
(d) Find the:
(i) Pearson coeffici ent of skewne ss for the grouped data in Table 3; [5 Marks]
(ii) Coeffic ient of kurtosis for the grouped data in Table 3. [5 Marks]
(e) Based on your answers in (d), commen t on the symmet ric and
peakedn ess of the
distribu tion for the data set in Table 3.
[3 Marks]
END OF EXAMINATION
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. }";(y-j) )
(n - k) 2
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4. rrnnk = I - [~]
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re x-n-t
6. Cov(x ,y) =
1
8 · Var (x) = -n-1
-I"1=1 /; (x, - i )z
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AAE.AS Ut£>ER THE STANOA.RDI.Z!O NOAMAL. ()(ST-qr8VT)()N
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0.1000 o..osoo I 0.0250 I 0.01 00 0.00 50
636.6
c!' 0.2.500 318.3
06 I
63.66 1 27.3
6.31 4 31.821 3 1.60
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1.88 6 2.92 0
I 12.7
4.303 6.965 9.92 5 14.0 9 22.33
12.92
2 0..816 10.21
5.841 7.453
3.182 4.54 1 8 .610
2.35 3
4
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0.741
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5 .893 6.86 9
4.03 2 4.773
2.571 3.365 5 .959
L 476 2.01 5 5.20 8
5 0.72 7 4.31 7
3.14 3 3.70 7
L 943 2.44 7 5.40 8
5 0 .718 LUO 4.0 29 4.78 5
2.998 3.49 9
L895 2.365 4 .501 5 .041
7 0 71 1 1.415 3.83 3
2.896 335 5
L39 7 L86 0 2.306 I 4.29 7 4 .781
e 0 706 3.69 0
"
10
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0.70 0
L 383
L372
L 833
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2.262
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2.82 1
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3.58 1
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4.14 4
4.02 5
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4.43 7
4.140
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13 2.62 4 I 2.97 7
1.761 2.145 4 .073
0.&52 L :345 3.28 6 3.73 3
1' 2.602 2.94 7
1. 753 2.131
0..5-5 1 L :341
I 3.25 2 3 .68 6 4.01 5
I
15 2.583 2.92 1
1.74 6 2.120 3.9 65
0.69 0 L33 7 I 3.22 2 3.64 6
1€ 2.56 7 2.89 8
1.74 0 2.110
L33 3 3.61 0 3.92 2
17 0.68 5 2.87 8 3.19 7
2.101 2.552 I
1.734
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0.6e 8 :_33 0 3.57 9 3.88 3
le 2.86 1 3.17 4
2.09 3 2.53 9
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lS
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L325 1.72 5 I
20 0.68 7 3.13 5 3.52 7 3 .8 19
2.518 2.83 1
1.721 2.08 0
0.68 6 L323 3 .505 3 .792
21 2.S08 2.81 9 3.11 9
1. 717 2.07 4
0.62 6 1.321 3 .768
22 2.80 7 3 .104 3.48 5
1.714 2.06 9 I 2.500
0.68 5 1.31 9 I
3 . 745
23 I 2.49 2 2.79 7 3.09 1 3.46 7
24 0.68 5 1.318
1.31 6
1.71 1
1. 708
2.06 4
27
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1.31 5
1.31 4
1.706
1.70 3 2.05 2 I 2.47 3
2.46 7
2.771
2.76 3
3.05 7
3.04 7
3.42 1
3.40 8
3.69 0
3 .674
1. 701 2.04 8
0.68 3 1.313
I
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2.462 2.75 6 3.03 8 3.39 6 3 .659
1.69 9 2.04 5
0.68 3 1. 311 I
29
2.04 2 2.45 7 2.75 0 3.03 0 3.38 5 3.64 6
1.31 0 1.69 7
30 0.68 3
2.02 1 2.42 3 2.70 4 2 .971 3.3 07 3 .551
0.681 1.30 3 1.68 4
40
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0.67 9 1.29 6 1.67 1
60
1.66 2 1.98 7 2.36 8 2.63 2 2.87 8 3.18 3 3 .40 2
1.291
90
120
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0 .100 0.050 0.02S 0.010 o.oos
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9.2103 10.5966
2.7716 4 .f,052 5.9915 7.3778
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11.3449 12.8382
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6
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1
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