Test Bank For Statistics For Business and Economics 8th Edition Paul Newbold William Carlson Betty Thorne

Test Bank for Statistics for Business and Economics, 8th Edition, Paul Newbold William Carls
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8th Edition, Paul Newbold William Carlson Betty
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Statistics for Business and Economics, 8e (Newbold)
Chapter 6 Sampling and Sampling Distributions
1) In a recent survey of college professors, it was found that the average amount of money spent on
entertainment each week was normally distributed with a mean of $95.25 and a standard deviation of
$27.32. What is the probability that the average spending of a sample of 25 randomly-selected professors
will exceed $102.50?
A) 0.0918
B) 0.1064
C) 0.3936
D) 0.4082
Answer: A
Difficulty: Moderate
Topic: Sampling Distributions of Sample Means
AACSB: Analytic Skills
Course LO: Explain the fundamentals of sampling methods, experiment designs, and sampling
distributions
2) In examining the invoices issued by a company, an auditor finds that the dollar amounts of invoices
have a mean of $1,732 and a standard deviation of $298. What is the probability that for a sample of 45
invoices, the average invoice is greater than $1,800?
A) 0.563
B) 0.063
C) 0.437
D) 0.937
Answer: B
distributions
3) In a recent survey of high school students, it was found that the average amount of money spent on
$18.23. Assuming these values are representative of all high school students, what is the probability that
for a sample of 25, the average amount spent by each student exceeds $60?
A) 0.3372
B) 0.0174
C) 0.1628
D) 0.4826
Answer: B
distributions
6-1
Copyright © 2013 Pearson Education, Inc.
4) If a sample of size 100 is taken from a population whose standard deviation is equal to 100, then the
standard error of the mean is equal to:
A) 10
B) 100
C) 1,000
D) 10,000
Answer: A
distributions
5) What is the name of the parameter that determines the shape of the chi-square distribution?
A) mean
B) variance
C) proportion
D) degrees of freedom
Answer: D
Difficulty: Easy
Topic: Sampling Distributions of Sample Variances
AACSB: Reflective Thinking Skills
distributions
6) Which of the following statements is true regarding the standard error of the mean?
A) It is equal to the population variance divided by the square root of n.
B) It is equal to the population standard deviation divided by the sample size n.
C) It is equal to the population variance divided by (n -1).
D) It is equal to the population standard deviation divided by the square root of n.
Answer: D
distributions
6-2
7) The number of students using the ATM on campus daily is normally distributed with a mean of 237.6
and a standard deviation of 26.3. For a random sample of 55 days, what is the probability that the ATM
usage averaged more than 230 students per day?
A) 0.9756
B) 0.9483
C) 0.9838
D) 0.9524
Answer: C
distributions
8) The amount of time that you have to wait before seeing the doctor in the doctor's office is normally
distributed with a mean of 15.2 minutes and a standard deviation of 15.2 minutes. If you take a random
sample of 35 patients, what is the probability that the average wait time is greater than 20 minutes? (Hint:
Round the probability value to 2 decimal places.)
A) 0.28
B) 0.16
C) 0.09
D) 0.03
Answer: D
distributions
9) The interval within which a sample mean has a high probability of occurring, given that the population
mean and variance is known, is called a(n):
A) confidence interval.
B) rejection interval.
C) acceptance interval.
D) decision interval.
Answer: C
distributions
6-3
10) Random samples of size 36 are taken from an infinite population whose mean is 80 and standard
deviation is 18. The standard error of the sample mean is:
A) 18
B) 15
C) 3
D) 2
Answer: C
distributions
11) The standard deviation of the sampling distribution of the sample mean is also called the:
A) minimum sample factor.
B) standard error of the mean.
C) finite population correction factor.
D) population standard deviation.
Answer: B
Difficulty: Easy
distributions
12) If all possible samples of size n are drawn from an infinite population with a mean of 20 and a
standard deviation of 5, then the standard error of the sampling distribution of sample means is equal to
1.0 only for samples of size:
A) 5
B) 15
C) 20
D) 25
Answer: D
distributions
6-4
13) A sample of size 25 is selected at random from a finite population. If the finite population correction
factor is 0.80, then the population size is:
A) 121
B) 96
C) 75
D) 100
Answer: A
distributions
14) The sampling distribution of the mean is a distribution of:

A) individual population values.
B) individual sample values.
C) sample statistics.
D) population parameters.
Answer: C
Topic: Sampling from a Population
distributions
15) A sample of size n is selected at random from an infinite population. As n increases, which of the
following statements is true?
A) The population standard deviation decreases.
B) The standard error of the sample mean decreases.
C) The population standard deviation increases.
D) The standard error of the sample mean increases.
Answer: B
distributions
6-5
16) If all possible samples of size n are drawn from an infinite population with a mean μ and a standard
deviation σ, then the standard error of the sampling distribution of sample mean is inversely proportional
to:
A) μ
B) σ
C) n
D)
Answer: D
distributions
17) Why is the central limit theorem important in statistics?

A) Because for a large sample size n, it says the population is approximately normal.
B) Because for any population, it says the sampling distribution of the sample mean is approximately
normal, regardless of the shape of the population.
C) Because for a large sample size n, it says the sampling distribution of the sample mean is
approximately normal, regardless of the shape of the population.
D) Because for any sample size n, it says the sampling distribution of the sample mean is approximately
normal.
Answer: C
distributions
18) If the standard error of the sampling distribution of the sample proportion is 0.0229 for samples of
size 400, then the population proportion must be either:
A) 0.4 or 0.6
B) 0.5 or 0.5
C) 0.2 or 0.8
D) 0.3 or 0.7
Answer: D
Topic: Sampling Distributions of Sample Proportions
distributions
6-6
19) As a general rule, the normal distribution is used to approximate the sampling distribution of the
sample proportion only if:
A) the sample size n is greater than 30.
B) the population proportion P is close to 0.50.
C) the underlying population is normal.
D) nP(1 - P) > 5.
Answer: D
distributions
20) Which of the following distributions is used to determine the sampling distribution of the sample
variance?
A) normal distribution
B) binomial distribution
C) chi-square distribution
D) Poisson distribution
Answer: C
Difficulty: Easy
distributions
21) The standard deviation of is also called the:

A) standard error of the sampling distribution of sample proportions.
B) standard deviation of the population.
C) normal approximation to the binomial.
D) continuity correction factor.
Answer: A
Difficulty: Easy
distributions
6-7
22) If all possible random samples of size n are taken from a population, and the mean of each sample is
determined, the mean of the sample distribution is:
A) larger than the population mean.
B) exactly the same as the population mean.
C) smaller than the population mean.
D) unrelated to the population mean.
Answer: B
Difficulty: Easy
distributions
23) As the size of the sample increases, what happens to the shape of the sampling distribution of sample
means?
A) It becomes positively skewed.
B) It becomes negatively skewed.
C) It becomes uniformly distributed.
D) It becomes approximately normal.
Answer: D
Difficulty: Easy
distributions
24) According to the central limit theorem, the sampling distribution of the sample mean can be
approximated by the normal distribution as the:
A) number of samples gets large enough.
B) sample size gets large enough.
C) population standard deviation increases.
D) sample standard deviation decreases.
Answer: B
Difficulty: Easy
distributions
6-8
25) If the standard error of the sampling distribution of the sample proportion is 0.02049 for samples of
size 500, then the population proportion must be either:
A) 0.2 or 0.8
B) 0.5 or 0.5
C) 0.3 or 0.7
D) 0.6 or 0.4
Answer: C
distributions
26) Random samples of size 36 each are taken from a large population whose mean is 120 and standard
deviation is 39. The standard error of the sampling distribution of sample mean is:
A) 39
B) 6.5
C) 15.6
D) 24.5
Answer: B
distributions
27) A golfer practices 60 twenty-foot putts a day and historically makes 25 percent of them. Calculate the
standard error of the sample proportion.
A) 0.3256
B) 0.6258
C) 0.0559
D) 0.4057
Answer: C
distributions
6-9
28) A basketball player shoots 60 free throws a day and historically makes 75 percent of them. What is the
probability that he will make at most 80 percent tomorrow?
A) 0.1056
B) 0.8133
C) 0.1867
D) 0.8944
Answer: B
distributions
29) All possible random samples of 200 middle managers are selected from a population for a study
concerning their mean annual income. The population standard deviation is computed to be $2,248.5.
What is the standard deviation of the sampling distribution of the means?
A) $47.42
B) $11.24
C) $158.99
D) $57.86
Answer: C
distributions
THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

You have recently joined a Weight Watchers club. Suppose that the number of times you expect to visit
the club in a month is represented by a normally distributed random variable with a mean of 12 and a
standard deviation of 2.50.
30) Over the course of the next year, what is the probability that you average more than 13 visits to the
club?
A) 0.1554
B) 0.4177
C) 0.3446
D) 0.0823
Answer: D
distributions
6-10
31) The probability is 85% that you average less than how many visits to the club per month over the
course of next year?
A) 12.75
B) 11.50
C) 12.50
D) 11.75
Answer: A
distributions

Suppose that 20% of all invoices are for amounts greater than $800. A random sample of 50 invoices is
taken.
32) What is the mean and standard error of the sample proportion of invoices with amounts in excess of
$800?
A) mean = 10, standard error = 0.4472
B) mean = 0.20, standard error = 0.0566
C) mean = 0.20, standard error = 0.0032
D) mean = 10, standard error = 0.0598
Answer: B
distributions
33) What is the probability that more than 22.7% of these 50 invoices are for more than $800?
A) 0.1368
B) 0.2266
C) 0.3156
D) 0.2734
Answer: C
distributions
6-11
34) What is the probability that at least 25% of these 50 invoices are for more than $800?
A) 0.1894
B) 0.8106
C) 0.3106
D) 0.8894
Answer: A
distributions
35) Suppose that 15% of all invoices are for amounts greater than $1,000. A random sample of 60 invoices
is taken. What is the probability that between 13% and 23% of these 60 invoices are for more than $1,000?
A) 0.4591
B) 0.2019
C) 0.1664
D) 0.6255
Answer: D
distributions
36) The average score of all students who took a particular statistics class last semester has a mean of 70
and a standard deviation of 3.0. Suppose 36 students who are taking the class this semester are selected at
random. Find the probability that the average score of the 36 students exceeds 71.
A) 0.0228
B) 0.0772
C) 0.1228
D) 0.1772.
Answer: A
distributions
6-12
37) Based on the central limit theorem, the mean of all possible sample means is equal to the population:
A) variance.
B) mean.
C) median.
D) standard deviation.
Answer: B
Difficulty: Easy
distributions
38) The variance of the sampling distribution of the sample mean is equal to the variance of the
population mean divided by the square root of the sample size.
Answer: FALSE
Difficulty: Easy
distributions
39) If the sample size, n, equals the population size, N, then the variance of the sample mean, , is zero.
Answer: TRUE
Difficulty: Easy
distributions
40) Based on the sampling distribution of the means and the central limit theorem, the sample mean can
be used as a good estimator of the population mean, assuming that the sample size, n, is sufficiently large.
Answer: TRUE
Difficulty: Easy
distributions
41) The variance of the sampling distribution of the sample proportion is equal to P(1 - P) / n.
Answer: FALSE
Difficulty: Easy
distributions
6-13
42) The larger the sample size, the larger the standard error of the sample proportion.
Answer: FALSE
Difficulty: Easy
distributions
43) The fraction of the population in the sample determines the precision of results from a random
sample.
Answer: FALSE
Difficulty: Easy
distributions
44) The central limit theorem can be applied to both discrete and continuous random variables.
Answer: TRUE
Difficulty: Easy
distributions
45) The central limit theorem states that as the sample size increases, the distribution of the population
mean approaches the normal distribution.
Answer: FALSE
Difficulty: Easy
distributions
46) The chi-square family of distributions is used in applied statistical analysis because it provides a link
between the sample and population variances.
Answer: TRUE
Difficulty: Easy
distributions
6-14
47) The central limit theorem is basic to the concept of statistical inference because it permits us to draw
conclusions about the population based strictly on sample data.
Answer: TRUE
Difficulty: Easy
distributions
48) The mean of the sampling distribution of the sample proportion , when the sample size n = 100 and
the population proportion P = 0.92, is 92.0
Answer: FALSE
distributions
49) The standard error of the sampling distribution of the sample proportion , when the sample size n =
100 and the population proportion P = 0.30, is 0.0021
Answer: FALSE
distributions
50) The sampling distribution of sample means is normal for samples of any size, n, provided that the
parent sampled population has a normal distribution.
Answer: TRUE
Difficulty: Easy
distributions
51) If the standard error of the sampling distribution of sample proportions is 0.0245 for samples of size
400, then the population proportion must be 0.40.
Answer: FALSE
distributions
6-15
52) If a random sample of 250 observations is taken from a population whose proportion P is equal to 0.6,
then the expected value of the sample proportion is 0.40
Answer: FALSE
distributions
53) Acceptance intervals are widely used for quality control monitoring of various production and service
processes.
Answer: TRUE
Difficulty: Easy
distributions
54) The central limit theorem states that if all possible random samples of size n are taken from any
population, the sampling distribution of sample means becomes approximately normal when the sample
size n is large enough.
Answer: TRUE
Difficulty: Easy
distributions
55) The standard error of the mean is also called sampling error.
Answer: FALSE
Difficulty: Easy
distributions
56) The variance of the sampling distribution of sample mean decreases as the sample size, n, increases.
Answer: TRUE
Difficulty: Easy
distributions
6-16
57) The central limit theorem states that the sampling distribution of sample means will closely resemble
the normal distribution regardless of the sample size.
Answer: FALSE
Difficulty: Easy
distributions
58) The mean and variance of a chi-square distribution with ν degrees of freedom is determined by the
number of degrees of freedom.
Answer: TRUE
Difficulty: Easy
distributions
6-17
Suppose you flip a coin four times. For every head, you receive one point, and for every tail, you lose one
point.
59) Develop the sampling distribution for the mean number of points you receive from flipping four
coins.
Answer: The below table shows the all the possible samples and associated sample means
Therefore, sampling distribution of the sample means
-1 -0.5 0 0.5 1
Fav Outcomes 1 4 6 4 1
1/16 = 1/16 =
P( ) 0.0625 4/16 = 0.25 6/16 = 0.375 4/16 = 0.25 0.0625
distributions
60) What is the probability that the mean number of points you receive on four flips is 0.5?
Answer: P( = 0.5) = 0.25
distributions
6-18
61) What is the probability that the mean number of points you receive on four flips is 0?
Answer: P( = 0) = 0.375
distributions

You have recently joined a country club. Suppose that the number of times you expect to play golf in a
month is represented by a normally distributed random variable with a mean of 10 and a standard
deviation of 2.4.
62) Over the course of the next year, what is the probability that you average more than 11 games a
month?
Answer: μ = 10, σ = 2.4, n = 12
P( > 11) = P(Z > 1.44) = 1 - 0.9251 = 0.0749
distributions
63) Over the course of the next year, the probability is 85% that you average less than how many games
per month?
Answer: μ = 10, σ = 2.4, n = 12
P( < a) = 0.85 ⇒ P(Z < ) = 0.85 ⇒ = 1.04 ⇒ a = 10.721
distributions
64) The number of orders that come into a mail-order sales office each month is normally distributed with
a mean of 298 and a standard deviation of 15.4. For a particular sample size, the probability that the
sample mean exceeds 300 is 0.2. How big must the sample be?
Answer: P( > 300) = 0.20 ⇒ P(Z > ) = 0.20 ⇒ P(Z > ) = 0.20 ⇒ = 0.84
distributions
6-19
The length of time it takes to fill an order at a local sandwich shop is normally distributed with a mean of
4.1 minutes and a standard deviation of 1.3 minutes.
65) What is the probability that the average waiting time for a random sample of ten customers is
between 4.0 and 4.2 minutes?
Answer: P(4.0 < < 4.2) = P(Z < 0.24) - P(Z < -0.24) = 0.5948 - 0.4052 = 0.1896
distributions
66) The probability is 95% that the average waiting time for a random sample of ten customers is greater
than how many minutes?
Answer: P( > a) = 0.95 ⇒ P =P = .95
⇒ = -1.64 ⇒ a = 3.42 minutes
distributions

In a recent survey of high school students, it was found that the average amount of money spent on
$18.23. Assume that these values are representative of all high school students.
67) What is the probability that for a sample of 25, the average amount spent exceeds $60?
Answer: P( > 60) = P(Z > 2.11) = 0.0174
distributions
68) The probability is 65% that the average spending of a sample of 25 randomly-selected students will
spend at least how much?
Answer: P( ≥ a) = 0.65 ⇒ P(Z ≥ ) = 0.65 ⇒ = -0.39 ⇒ a = $50.88
distributions
6-20
Let the random variable X follow a normal distribution with a mean of μ and a standard deviation of σ.
Let 1 be the mean of a sample of 16 observations randomly chosen from this population, and 2 be the
mean of a sample of 25 observations randomly chosen from the same population.
69) Evaluate the statement P(μ - 0.2σ < 1 < μ + 0.2σ) < P(μ - 0.2σ < 2 < μ + 0.2σ) as to whether it is true or
false. Please state if you are unable to determine whether the statement is true or false. Support your
answer.
Answer: Since 1 is less concentrated around the mean (larger standard error), the
statement P(μ - 0.2σ < 1 < μ + 0.2σ) < P(μ - 0.2σ < 2 < μ + 0.2σ) is true.
distributions
70) Evaluate the statement P 1 < μ + ) < P( 2 < μ + ) as to whether it is true or false. Please state if you
are unable to determine whether the statement is true or false. Support your answer.
Answer: Both of these expressions are asking the same question: What is the probability of observing a
sample mean below one standard deviation above its expected value? Therefore, these probabilities
would be equal. Hence, P( 1 < μ + ) < P( 2 < μ + ) is a false statement.
distributions
71) Evaluate the statement P( 1 < μ + ) < P( 2 < μ + ) as to whether it is true or false. Please state if
you are unable to determine whether the statement is true or false. Support your answer.
Answer: In P( 1 < μ + ), we are going 1/4 of a standard error above the mean. In P( 2 < μ + ), we are
only going 1/5 of a standard error above the mean. Therefore, the expression on the left hand side has to
be larger than the probability on the right hand side. Hence, P( 1 < μ + ) < P( 2 < μ + ) is a false
statement.
distributions
6-21
72) Suppose that 15% of all invoices are for amounts greater than $1,000. A random sample of 60 invoices
is taken. What is the mean and standard error of the sample proportion of invoices with amounts in
excess of $1,000? What is the probability that the proportion of invoices in the sample is greater than 18%?
Answer: P= 0.15, n = 60
E( ) = P = 0.15
Var( ) = = = (0.15)(0.85)/60 = 0.002. Hence, σ = 0.0461
P( > 0.18) = P(Z > 0.65) = 0.2578
distributions

It has been found that 62.1% of all unsolicited third class mail delivered to households goes unread. Over
the course of a month, a household receives 100 pieces of unsolicited mail.
73) What is the mean of the sample proportion of pieces of unread mail?
Answer: E( ) = P = 0.621
distributions
74) What is the variance of the proportion?
Answer: = P(1- P) / n = (0.621)(0.379)/100 = 0.00235
distributions
75) What is the standard error of the sample proportion?

Answer: = = 0.0485
distributions
6-22
76) What is the probability that the sample proportion is greater than 0.60?
Answer: P( > 0.60) = P(Z > -0.43) = 0.6664
distributions

The filling machine at a bottling plant is operating correctly when the variance of the fill amount is equal
to 0.3 ounces. Assume that the fill amounts follow a normal distribution.
77) What is the probability that for a sample of 30 bottles, the sample variance is greater than 0.5?
Answer: P(s2 > 0.5) = P = P(χ2 > 48.33) = p-value lies between 0.01 and 0.025.
Using Excel, p-value = CHIDIST(48.33,29) = 0.0136

distributions
78) The probability is 0.10 that for a sample of 30 bottles, the sample variance is less than what number?
Answer: P(s2 > k) = 0.10 ⇒ P = 0.10
⇒ 96.67k = 19.77
⇒ k = 0.2045
distributions
6-23
A sample of 25 bottles is taken from the production line at a local bottling plant. Assume that the fill
amounts follow a normal distribution.
79) What is the probability that the sample standard deviation is more than 70% of the population
standard deviation?
Answer: P(s > 0.7σ) = P =P = P(χ2 > 11.76) = 0.982
(Obtained using Excel)

Using table, p-value lies between 0.975 and 0.990.
distributions
80) The probability is 90% that the sample variance is less than what percent of the population variance?
Answer: P(s2 > kσ2) = 0.90 ⇒ P = 90 ⇒ P = 0.90
⇒ P(χ2 < 24k) ⇒ 24k = 33.20 ⇒ k = 1.383 or 13.83%

distributions
81) The length of time it takes a stock analyst to complete an evaluation of a company's earnings forecast
is normally distributed with a mean of 6.7 hours. From looking at the time spent by an analyst evaluating
36 randomly selected stocks you find that the sample mean was 6.4 hours. If you are told that the
probability of getting a sample mean this small or smaller is 0.10, what must the population standard
deviation have been?
Answer: P( < 6.4) = 0.10 ⇒ P = 0.10 ⇒ P = 0.10
⇒ -1.8/σ = -1.28 ⇒ σ = 1.406

distributions
6-24
It is estimated that 1.3% of all items produced on an assembly line have some form of defect. You
randomly select 60 items for inspection.
82) What is the probability that more than 1.5% of the 60 items have some form of defect?
Answer: p = 0.013, n = 60
P( > 0.015) = P[Z > (0.015 - 0.013) / ] = P(Z > 0.14) = 0.4443
distributions
83) The probability is 86% that the proportion of items with a defect is less than what number?
Answer: P( < k) = 0.86 = P[Z < (k - .013)/ ] ⇒ (K - 0.013)/0.0146 = 1.08
⇒ K = 0.0288
distributions
84) An advertisement claims that four out of five doctors recommend a particular product. A consumer
group wants to test that claim, and takes a random sample of 30 doctors. The consumer group finds that
of this group of doctors, only 0.75 would recommend the product. What is the probability that the
proportion of doctors in this sample who recommend the product is 0.75 or less? Do you have reason to
doubt the manufacturer's claim? Explain.
Answer: P = 0.80, n = 30
P( ≤ 0.75) = P[Z < (0.75 - 0.80) / ] = P(Z < -0.68) = 0.2483
It would not be unusual to have 75% or fewer doctors recommending the product out of a group of 30.
We cannot really doubt the manufacturer's claim.
distributions
6-25
The average checking account balance at a local bank is $1,742 with a standard deviation of $132. A
random sample of 70 accounts is selected.
85) What is the probability that the average balance for these accounts is less than $1,700?
Answer: μ = 1742 and σ = 132
P( < 1700) = P = P(Z < -2.66) = 0.0039
distributions
86) The probability is 0.23 that the average balance for these accounts is greater than what amount?
Answer: P( > k) = 0.23 = P =P
This implies that = 0.74. Hence, K = $1,753.67
distributions

The number of nails in a five-pound box of nails is normally distributed with a mean of 563.3 and a
standard deviation of 33. Suppose you select a random sample of 30 boxes.
87) What is the probability that the average number of nails per box for this sample is between 560 and
580 nails?
Answer: μ = 563.3, σ = 33.0, n = 30
P(560 < < 580) = P
= P(-0.55 < Z < 2.77)

= 0.706
distributions
6-26
88) The probability is 0.22 that the sample mean will be more than what value?
Answer: P( > a) = 0.22 ⇒ P = 0.22
⇒P = 0.22
⇒ = 0.77 ⇒ a = 567.94
distributions
89) The length of time it takes for a stock analyst to complete an evaluation of a company's earnings
forecast is normally distributed with a standard deviation of 1.7 hours. From looking at the time spent by
an analyst evaluating 15 randomly-selected stocks you find that the sample mean was 6.4 hours. If you
know that the probability of getting a sample mean this large or larger is 0.36, what is the mean of the
population?
Answer: n = 15, = 6.40, σ = 1.7
P( ≥ 6.40) = 0.36 ⇒ P = 0.36 ⇒ P = 0.36
⇒P = 0.64 ⇒ = 0.36 ⇒ μ = 6.242
distributions
90) In examining the invoices issued by a company, an auditor finds that the dollar amount of invoices
have a mean of $1,732 and standard deviation of $298. Which pair of symmetric numbers around the
mean make the statement P(a < < b) = 0.853 correct for a random sample of 55 invoices?
Answer: μ = 1732, σ = 298, n = 55, then σ/ = 40.182
P(a < < b) = 0.853 ⇒ P = 0.853
= -1.45 and = 1.45. Hence, a =1673.74 and b =1790.26
distributions
6-27
91) It has been estimated that 43% of all college students change their major at least once during the
course of their college career. If we take a random sample of 55 college students, what is the probability
that more than 40% will change their major?
Answer: n = 55, P = 0.43. Then, E( ) = = 0.43 and = = 0.0668
P( > 0.40) = P(Z > -0.45) = 0.6736

distributions
92) It has been estimated that 53% of all college students change their major at least once during the
course of their college career. Suppose you are told that the sample proportion for a random sample was
0.48. Furthermore, you are told that the probability of getting a sample proportion of this size or smaller
is 14%. What must have been the sample size?
Answer: P = 0.53, = 0.48
P( ≤ 0.48) = 0.14 ⇒ P =P
Hence, = -1.08. This implies that n = 117
distributions
93) The number of students using the ATM on campus daily is normally distributed with a mean of 237.6
and a standard deviation of 26.3. You take a random sample of 30 days. Find two values"a" and"b" that
are symmetric around the mean such that the probability is 0.95 that the sample mean is greater than"a"
and less than"b".
Answer: μ = 237.6, σ = 26.3, n = 30, then σ/ = 4.802
P(a < < b) = -.95 = P . Hence,
= -1.96 and = 1.96
These two equations imply that a = 228.189 and b = 247.01

distributions
6-28
94) The results of a recent survey indicated that 17.7% of all U.S. adults had taken a commercial airplane
flight during the last year. If we take a random sample of 200 adults, what is the probability that more
than 20% flew during the past year?
Answer: P = 0.177, n =200. Then, E( )= P = 0.177 and = = 0.02699
P( > 0.20) = P(Z > 0.85) = 0.1977

distributions

Given a population with mean μ=120 and variance σ2 = 81, the central limit applies when the sample size
is large-enough. A random sample of size n = 36 is obtained.
95) What are the mean and standard deviation of the sampling distribution for the sample means?
Answer: E( ) = μ = 120, = σ/ = 9/6 = 1.50
distributions
96) What is the probability that the sample mean is greater than 123?
Answer: P( > 123) = P(Z > 2) = 0.50 - 0.4772 = 0.0228
distributions
97) What is the probability that the sample mean is between 118 and 121?
Answer: P(118 ≤ ≤ 121) = P(-1.33 ≤ Z ≤ 0.67) = 0.4082 + 0.2486 = 0.6568
distributions
6-29
98) What is the probability that the sample mean is at most 121.5?
Answer: P( ≤ 121.5) = P(Z ≤ 1.0) = 0.3413 + 0.50 = 0.8413
distributions

The mean selling price of new homes in a city over a year was $120,000. The population standard
deviation was $28,000. A random sample of 100 new home sales from this city was taken.
99) What is the probability that the sample mean selling price was more than $116,000?
Answer: P( > 116,000) = P(Z > -1.43) = 0.4236 + 0.50 = 0.9236
distributions
100) What is the probability that the sample mean selling price was between $118,000 and $122,000?
Answer: P(118,000 ≤ ≤ 122,000) = P(-0.71 ≤ Z ≤ 0.71) = 0.2611 + 0.2611 = 0.5222
distributions
101) What is the probability that the sample mean selling price was between $119,000 and $121,000?
Answer: P(119,000 ≤ ≤ 121,000) = P(-0.36 ≤ Z ≤ 0.36) = 0.1406 + 0.1406 = 0.2812
distributions
102) Without doing the calculations, state in which of the following ranges the sample mean selling price
is most likely to lie:
$118,000 to $120,000 $119,000 to $121,000

$120,000 to $122,000 $121,000 to $123,000
Answer: $119,000 to $121,000
distributions
6-30
103) Suppose a friend asserted that the population distribution of selling prices of new homes in this city
was almost certainly not normal. How would you respond?
Answer: Even with non-normal populations, the sampling distribution of the sample means will be
normal for sufficient sample n. Since n is 100, the sampling distribution of the sample means can be
assumed to be a normal distribution.
distributions

Candidates for employment at a city fire department are required to take a written aptitude test. Scores
on this test are normally distributed with mean 260 and standard deviation 51. A random sample of nine
test scores was taken.
104) What are the mean and standard error of the sampling distribution for the mean score?
Answer: E( ) = μ = 260, = σ/ = 51/3 = 17.0
distributions
105) What is the probability that the sample mean score is less than 250?
Answer: P( < 250) = P(Z < -0.59) = 0.50 - 0.2224 = 0.2776
distributions
106) What is the probability that the sample mean score is more than 230?
Answer: P( > 230) = P(Z > -1.76) = 0.4608 + 0.50 = 0.9608
distributions
6-31
Times spent studying by students in the week before final exams follow a normal distribution with
standard deviation 9 hours. A random sample of 5 students was taken in order to estimate the mean
study time for the population of all students.
107) What is the standard error of the sampling distribution for the mean score?
Answer: = σ/ = 9/ = 4.025
distributions
108) What is the probability that the sample mean exceeds the population mean by more than 2.1 hours?
Answer: P( - μ > 2.10) = P(Z > 0.52) = 0.50 - 0.1985 = 0.3015
distributions
109) What is the probability that the sample mean is more than 3.2 hours below the population mean?
Answer: P( - μ < -3.2) = P(Z < -0.80) = 0.50 - 0.2881 = 0.2119
distributions
110) What is the probability that the sample mean differs from the population mean by ± 4.1 hours?
Answer: P(-4.1 < - μ < 4.1) = P(-1.02 < Z < 1.02) = 0.3461 + 0.3461 = 0.6922
distributions
111) Suppose that a second (independent) random sample of 10 students was taken. Without doing the
calculations, state whether the probabilities in the second, third and fourth questions would be higher,
lower, or the same for the second sample.
Answer: The probabilities in the second, third, and fourth questions would be lower for the second
sample than that for the first sample.
distributions
6-32
The number of hours spent studying by students on Michigan State campus in the week before final
exams follows a normal distribution with standard deviation 9.5 hours. A random sample of these
students is taken to estimate the population mean number of hours studying.
112) How large a sample is needed to ensure that the probability that the sample mean differs from the
population mean by more than 2.1 hours is less than 0.05?
Answer: P( - μ > 2.1) = 0.025 ⇒ P[Z > 2.1/(9.5/ )] = 0.025 ⇒ 2.1 /9.5 = 1.96 ⇒ n = 78.62
Therefore, take n = 79
distributions
113) Without doing the calculations, state whether a larger or smaller sample would be required to
guarantee that the probability that the sample mean differs from the population mean by more than 2.1
hours is less than 0.10, when compared to the sample needed to ensure that the probability that the
sample mean differs from the population mean by more thatn 2.1 hours is less than 0.05.
Answer: Smaller sample
distributions
114) Without doing the calculations, state whether a larger or smaller sample would be required to
guarantee that the probability that the sample mean differs from the population mean by more than 1.8
hours is less than 0.05, when compared to the sample needed to ensure that the probability that the
sample mean differs from the population mean by more than 2.1 hours is less than 0.05.
Answer: Larger sample
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6-33
In taking a sample of n observations from a population of N members, the variance of the sampling
distribution of the sample means is = . The quantity is called the finite population
correction factor.
115) To get some feeling for possible magnitudes of the finite population correction factor, calculate it for
samples of n = 15 observations from populations of N = 15, 30, 60, 100, 500, 1,000, 5,000, and 10,000
members.
Answer:
Population size
N 15 30 60 100 500 1,000 5,000 10,000
FPCF (N — n) /
(N -1) 0 0.517 0.763 0.859 0.972 0.986 0.997 0.999
distributions
116) Explain why the result for possible magnitudes of the finite population correction factor, for samples
of n =15 observations from populations of N = 15, 30, 60, 100, 500, 1,000, 5,000, and 10,000 members, is
precisely what one should expect on intuitive grounds.
Answer: When the population size (N) equals the sample size (n), then there is no variation away from
the population mean and the standard error will be zero. As the sample size becomes relatively small
compared to the population size, the correction factor tends toward 1 and becomes less significant in the
calculation of the standard error.
distributions
117) Given the results for possible magnitudes of the finite population correction factor, for samples of n
=15 observations from populations of N = 15, 30, 60, 100, 500, 1,000, 5,000, and 10,000 members, discuss
the practical significance of using the finite population correction factor for samples of 20 observations
from populations of different sizes.
Answer: The correction factor tends toward a value of 1 and becomes progressively less important as a
modifying factor when the sample size decreases relative to the population size.
distributions
6-34
According to the Internal Revenue Service, 80% of all tax returns lead to a refund. A random sample of
100 tax returns is taken.
118) What is the mean of the sampling distribution of the sample proportion of returns leading to
refunds?
Answer: E( )= P = 0.80
distributions
119) What is the standard error of the sample proportion?

Answer: = = = 0.04
distributions
120) What is the probability that the sample proportion exceeds 0.85?
Answer: P( > 0.85) = P(Z > 1.25) = 0.50 - 0.3944 = 0.1056
distributions
121) What is the probability that the sample proportion is between 0.78 and 0.84?
Answer: P(0.78 ≤ ≤ 0.84) = P(-0.5 ≤ Z ≤ 1.0) = 0.1915 + 0.3413 = 0.5328
distributions
6-35
A store has determined that 28% of all refrigerators purchasers will also purchase a service agreement. In
one month, 250 refrigerators are sold to customers who can be regarded as a random sample of all
purchasers.
122) What are the mean and standard error of the sampling distribution for the proportion of those who
will purchase a service agreement?
Answer: E( ) = P = 0.28, and = = = 0.0284
distributions
123) What is the probability that the sample proportion will be less than 0.30?
Answer: P( < 0.30) = P(Z < 0.70) = 0.50 + 0.2580 = 0.7580
distributions
124) Without doing the calculations, state in which of the following ranges the sample proportion is most
likely to be: 0.27 to 0.29, 0.28 to 0.30, 0.29 to 0.31, and 0.30 to 0.32.
Answer: The sample proportion is most likely to be in the range 0.27 to 0.29.
distributions

A random sample of size n = 25 is obtained from a normally distributed population with population
mean μ = 200 and variance σ2 = 100.
125) What are the mean and standard deviation of the sampling distribution for the sample means?
Answer: E( ) = μ = 200, = σ/ = 10/5 = 2.0
distributions
6-36
126) What is the probability that the sample mean is greater than 203?
Answer: P( > 203) = P(Z > 1.5) = 0.50 - 0.4332 = 0.0668
distributions
127) What is the value of the sample variance such that 5% of the sample variances would be less than
this value?
Answer: P(s2 < k) = 0.05 ⇒ P[(n -1)s2 / σ2 < (n -1)k / σ2] = 0.05 ⇒ P( < 0.24k) = 0.05
Hence, 0.24k = 13.85 and k = 57.7. Therefore, if the sample variance is 57.7, then 5% of the sample variances
would be less than this value.
distributions
128) What is the value of the sample variance such that 5% of the sample variances would be greater than
this value?
Answer: P(s2 < k) = 0.05 ⇒ P[(n -1)s2 / σ2 > (n -1)k / σ2] = 0.05 ⇒ P( < 0.24k) = 0.05
Hence, 0.24k = 36.42 and k = 151.75. Therefore, if the sample variance is 151.75, then 5% of the sample
variances would be greater than this value.
distributions

Monthly rates of return on the shares of a particular common stock are independent of one another and
normally distributed with a standard deviation of 1.8. A sample of 15 months is taken.
129) Find the probability that the sample standard deviation is less than 2.6.
Answer: P(s < 2.6) = P(s2 < 6.76) = P[(n -1)s2 / σ2 < (14)(6.76)/ (1.8) 2] = P( < 29.21)
≈ 1 - .01 = 0.99
distributions
6-37
130) Find the probability that the sample standard deviation is more than 1.2.
Answer: P(s > 1.2) = P(s2 > 1.44) = P[(n -1)s2 / σ2 < (14)(1.44)/ (1.8) 2] = P( > 6.22)
≈ between 0.95 and 0.975

distributions

A random sample of 10 stock market mutual funds was taken. Suppose that rates of returns on the
population of stock market mutual funds follow a normal distribution.
131) The probability is 0.10 that sample variance is bigger than what percentage of the population
variance?
Answer: P( > 14.684) = 0.10 ⇒ 14.684 = 9 (Difference) ⇒ Difference = 1.6316 or 163.16%
distributions
132) Find any pair of numbers, a and b, to complete the following sentence: The probability is 0.95 that the
sample variance is between a% and b% of the population variance.
Answer: Since P( < 2.7) = 0.025 and P( > 19.023) = 0.025, then 2.7 = 9a and 19.023 = 9b
Therefore, a = 0.30 and b = 2.1137, and the probability is 0.95 that the sample variance is between 30% and
211.37% of the population variance.
distributions
133) Suppose that a sample of 20 mutual funds had been taken. Without doing the calculations, indicate
how this would change the 95% interval for the population variance when a random sample of 10 stock
market mutual funds was taken.
Answer: The 95% interval in the second question would be smaller.
distributions
6-38
Each member of a random sample of 20 business economists was asked to predict the rate of inflation for
the coming year. Assume that the predictions for the whole population of business economists follow a
normal distribution with standard deviation 2%.
134) The probability is 0.01 that the sample standard deviation is larger than what value?
Answer: P(s > k) = P[(n - 1)s2 / σ2 > (n -1)k2 / σ2] = 0.01 ⇒ P( > 4.75 k2) = 0.01 ⇒ 4.75 k2 = 36.19
Hence k = 2.76. Therefore, the probability is 0.01 that the sample standard deviation is larger than 2.76%.
distributions
135) The probability is 0.025 that the sample standard deviation is smaller than what value?
Answer: P(s < k) = P[(n - 1)s2 / σ2 < (n -1)k2 / σ2] = 0.025 ⇒ P( < 4.75 k2) = 0.025 ⇒ 4.75 k2 = 8.91
Hence k = 1.369. Therefore, the probability is 0.025 that the sample standard deviation is smaller than
1.369%.
distributions
136) Find any pair of values such that the probability that the sample standard deviation lies between
these values is 0.90.
Answer: P( < 10.117) = 0.05 and P( > 30.144) = 0.05. Then, 19 / 4 = 10.117 which implies that sa
= 1.459, and 19 /4 = 30.144 which implies sb = 2.519. Hence, the probability that the sample standard
deviation lies between 1.459% and 2.519% is 0.90

distributions
6-39
137) Find the sampling distribution of sample means if all possible samples of size 2 are drawn with
replacement from the following population:
X -2 0 2
p(x) 0.2 0.6 0.2
Answer:
-2 -1 0 1 2
p( ) 0.04 0.24 0.44 0.24 0.04
distributions
138) Why does the sample size play such an important role in reducing the standard error of the mean?
What are the implications of increasing the sample size?
Answer: The standard error of the mean is the standard deviation of the population you are sampling
from divided by the square root of the sample size. So, mathematically as the sample size increases, the
standard error naturally decreases. But there is more to this, because the standard error is the standard
deviation of the sample means. So, as the sample size increases, the sample means are deviating less and
less from the true population mean. Hence, as we sample more, we get statistics which are closer to the
true parameters and our inference methods will improve. This is true for sampling distributions of mean,
proportions, and variances.
distributions

The following data give the number of pets owned for a population of 4 families.
Family A B C D
Number of Pets Owned 2 1 4 3
139) Find the population mean and population standard deviation.

Answer: μ = 2.5 and σ = 1.118
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6-40
140) Samples of size 2 will be drawn at random from the population. Use the formulas and
to calculate the mean and the standard deviation of the sampling distribution of sample
means.
Answer: E( ) = μ = 2.5, and = = 0.6455
distributions
141) List all possible samples of 2 families that can be selected without replacement from this population,
and compute the sample mean for each sample.
Answer:
Sample AB AC AD BC BD CD
1.5 3.0 2.5 2.5 2.0 3.5
distributions
142) Determine the sampling distribution of sample means by listing all possible samples of 2 families
that can be selected without replacement from this population.
Answer:
1.5 2.0 2.5 3.0 3.5
p( ) 1/6 1/6 1/3 1/6 1/6
distributions
6-41
The chairman of the statistics department in a certain college believes that 70% of the department's
graduate assistantships are given to international students. A random sample of 50 graduate assistants is
taken.
143) Assume that the chairman is correct and P = 0.70. What is the sampling distribution of the sample
proportion ?
Answer: The sampling distribution of the sample proportion is approximately normal,
since nP(1 - P) > 5.
distributions
144) Find the expected value and the standard error of the sampling distribution of ?
Answer: E( ) = 0.70, and = 0.0648
distributions
145) What is the probability that the sample proportion will be between 0.65 and 0.73?
Answer: 0.4566
distributions
146) Why is the central limit theorem important to statistical analysis?

Answer: Although the normal distribution occurs frequently and describes many populations, it is not
the only probability distribution in existence. The value of the central limit theorem is found in its
conclusion that regardless of the shape of the population distribution (i.e. samples can come from any
type of distribution), the sampling distribution of the mean will form a normal distribution. The central
limit theorem provides the basis for considerable work in applied statistical analysis. Many random
variables can be modeled as sums or means of independent random variables, and the normal
distribution provides a good approximation of the true distribution. It can be applied to both discrete and
continuous random variables.
Difficulty: Easy
distributions
6-42
Test Bank for Statistics for Business and Economics, 8th Edition, Paul Newbold William Carls
147) What is an acceptance interval?

Answer: An acceptance interval is an interval within which a sample mean has a higher probability of
occurring, given that the population mean and variance is known. If the sample mean is within that
interval, then the conclusion can be accepted that the random sample came from the population with the
known population mean and variance. Thus acceptance intervals provide an operating rule for process-
monitoring applications. The probability that the sample mean is within a particular interval can be
computed if the sample means have a distribution that is close to normal. Acceptance intervals can also
be computed for nonnormal probability distributions. Acceptance intervals find wide application for
monitoring manufacturing processes to determine if product standards continue to be achieved.
Difficulty: Easy
distributions
6-43
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14) The sampling distribution of the mean is a distribution of:

17) Why is the central limit theorem important in statistics?

21) The standard deviation of is also called the:

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Therefore, sampling distribution of the sample means

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

⇒ = -1.64 ⇒ a = 3.42 minutes

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

74) What is the variance of the proportion?

Answer: = P(1- P) / n = (0.621)(0.379)/100 = 0.00235

75) What is the standard error of the sample proportion?

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Using Excel, p-value = CHIDIST(48.33,29) = 0.0136

Answer: P(s2 > k) = 0.10 ⇒ P = 0.10

Answer: P(s > 0.7σ) = P =P = P(χ2 > 11.76) = 0.982

(Obtained using Excel)

Answer: P(s2 > kσ2) = 0.90 ⇒ P = 90 ⇒ P = 0.90

⇒ P(χ2 < 24k) ⇒ 24k = 33.20 ⇒ k = 1.383 or 13.83%

⇒ -1.8/σ = -1.28 ⇒ σ = 1.406

This implies that = 0.74. Hence, K = $1,753.67

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

P(560 < < 580) = P

= P(-0.55 < Z < 2.77)

Answer: P( > a) = 0.22 ⇒ P = 0.22

⇒P = 0.64 ⇒ = 0.36 ⇒ μ = 6.242

P(a < < b) = 0.853 ⇒ P = 0.853

= -1.45 and = 1.45. Hence, a =1673.74 and b =1790.26

P( > 0.40) = P(Z > -0.45) = 0.6736

Hence, = -1.08. This implies that n = 117

= -1.96 and = 1.96

These two equations imply that a = 228.189 and b = 247.01

P( > 0.20) = P(Z > 0.85) = 0.1977

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

$118,000 to $120,000 $119,000 to $121,000

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

119) What is the standard error of the sample proportion?

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

≈ between 0.95 and 0.975

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

Answer: P( > 14.684) = 0.10 ⇒ 14.684 = 9 (Difference) ⇒ Difference = 1.6316 or 163.16%

deviation lies between 1.459% and 2.519% is 0.90

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:

139) Find the population mean and population standard deviation.

146) Why is the central limit theorem important to statistical analysis?

147) What is an acceptance interval?

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