Business Analytics Data Analysis and Decision Making 6th Edition Albright Test Bank

Business Analytics Data Analysis and
Decision Making 6th Edition Albright

Test Bank
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Ch7
1. A sample in which the sampling units are chosen from the population by means of a random mechanism is a:
a. probability sample b. judgmental sample
c. stratified sample d. systematic sample
ANSWER: a
POINTS: 1
DIFFICULTY: Easy | Bloom’s: Knowledge
TOPICS: A-Head: 7-2 Sampling Terminology
OTHER: BUSPROG: Analytic | DISC: Statistical Inference
2. A judgmental sample is a sample in which the:

a. sampling units are chosen using a random number table
b. quality of sampling units judged before they are added to the sample
c. sampling units are chosen according to the sampler’s judgment
d. sampling units are all biased and vocal about it
ANSWER: c
POINTS: 1
3. Potential sample members, called sampling units, are:

a. people b. companies
c. households d. all of these choices
ANSWER: d
POINTS: 1
4. In sampling, a population is:

a. the set of all humans
b. the set of all members about which a study intends to make inferences
c. any group of test subjects
d. a random group of individuals, households, cities, or countries
ANSWER: b
POINTS: 1
5. A list of all members of the population is called a:

a. sampling unit b. probability sample
c. frame d. relevant population
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 1

Ch7
POINTS: 1
6. A list of all members of the population from which we can choose a sample is called a frame, and the potential sample
members are called sampling units.
a. True
b. False
ANSWER: True
POINTS: 1
7. A probability sample is a sample in which the sampling units are chosen from the population by means of a random
mechanism such as a random number table.
a. True
b. False
ANSWER: True
POINTS: 1
8. We can measure the accuracy of judgmental samples by applying some simple rules of probability. This way,
judgmental samples are not likely to contain our built-in biases.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy | Bloom’s: Comprehension
9. A sample chosen in such a way that every possible subset of same size has an equal chance of being selected is
called a(n):
a. interval estimation b. point estimation
c. simple random sample. d. statistic
ANSWER: c
POINTS: 1
TOPICS: A-Head: 7-3 Methods for Selecting Random Samples
10. The sampling method in which a population is divided into blocks and then selected by choosing a random
Ch7
mechanism is called a:
a. random sampling b. systematic sampling
c. stratified sampling d. cluster sampling
ANSWER: b
POINTS: 1
11. Which of the following is not a consideration when determining appropriate sample size?
a. the cost of sampling b. the timely collection of the data
c. interviewer fatigue d. the likelihood of nonsampling error
ANSWER: c
POINTS: 1
12. Identifiable subpopulations within a population are called:

a. clusters
b. samples
c. blocks
d. strata
e. none of these choices
ANSWER: d
POINTS: 1
13. The defining property of a simple random sample is that:

a. every sample of a particular size has the same chance of being chosen
b. the easiest method to access samples are chosen
c. the fewest samples necessary for statistical significance are chosen
d. every fourth subject is chosen as a sample
ANSWER: a
POINTS: 1
14. Selecting a random sample from each identifiable subgroup within a population is called:
a. demographic sampling
b. systematic sampling
c. stratified sampling
Ch7
d. cluster sampling
e. none of these choices
ANSWER: c
POINTS: 1
15. Which of the following are reasons for why simple random sampling is used infrequently in real applications?
a. Samples can be spread over a large geographic region.
b. Simple random sampling requires that all sampling units be identified prior to sampling.
c. Simple random sampling can result in underrepresentation or overrepresentation of certain segments of the
population.
d. All of these choices are valid reasons.
ANSWER: d
POINTS: 1
16. Which statement is true of proportional sample sizes?

a. The proportion of a stratum in the sample is independent of the proportion of that stratum in the population.
b. The proportion of a stratum in the sample is the same as the proportion of that stratum in the population.
c. The proportion of a stratum in the sample is greater than the proportion of that stratum in the population.
d. The proportion of a stratum in the sample is less than the proportion of that stratum in the population.
ANSWER: b
POINTS: 1
17. Simple random samples are samples in which each member of the population has the same chance of being chosen.
a. True
b. False
ANSWER: True
POINTS: 1
18. A simple random sample is one where each member of the population has a known chance (this may differ from one
member to another) or probability of being chosen.
a. True
b. False
ANSWER: False
Ch7
POINTS: 1
19. In systematic sampling, one of the first k members is selected randomly, and then every kth member after this one is
selected. The value k is called the sampling interval and equals the ratio N / n, where N is the population size and n is the
desired sample size.
a. True
b. False
ANSWER: True
POINTS: 1
20. In stratified sampling, the population is divided into relatively homogeneous subsets called strata, and then random
samples are taken from each stratum.
a. True
b. False
ANSWER: True
POINTS: 1
21. In stratified sampling with proportional sample sizes, the proportion of each stratum selected differs from stratum to
stratum.
a. True
b. False
ANSWER: False
POINTS: 1
22. In cluster sampling, the population is divided into subsets called clusters (such as cities or city blocks), and then a
random sample of the clusters is selected. Once the clusters are selected, we typically sample all of the members in each
selected cluster.
a. True
b. False
ANSWER: True
POINTS: 1
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23. The probability of being chosen in a simple random sample of size n from a population of size N is:
a. 1/N b. N – 1/n
c. N/n d. n/N
ANSWER: d
POINTS: 1
24. The key to using stratified sampling is:

a. identifying the strata b. selecting the appropriate strata
c. defining the strata d. randomizing the strata
ANSWER: b
POINTS: 1
25. If systematic sampling is chosen as the sampling technique, it is probably because:

a. systematic sampling has better statistical properties than simple random sampling
b. systematic sampling is more convenient
c. systematic sampling always results in more representative sampling than simple random sampling
d. none of these choices
ANSWER: b
POINTS: 1
26. The primary advantage of cluster sampling is sampling convenience (and possibly less cost). The downside, however,
is that the inferences drawn from a cluster sample can be less accurate, for a given sample size, than for other sampling
plans.
a. True
b. False
ANSWER: True
POINTS: 1
27. The finite population correction factor is a correction for the standard error when the sample size is fairly large relative
to the population size.
a. True
b. False

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ANSWER: True
POINTS: 1
28. Simple random sampling can result in under-representation or over-representation of certain segments of the
population. This is one of several reasons that simple random samples are almost never used in real applications.
a. True
b. False
ANSWER: True
POINTS: 1
29. Stratified samples are typically not used in real applications because they provide less accurate estimates of
population parameters for a given sampling cost.
a. True
b. False
ANSWER: False
POINTS: 1
30. Cluster sampling is often less convenient and more costly than other random sampling methods.
a. True
b. False
ANSWER: False
POINTS: 1
31. One obvious advantage of stratified sampling is that we obtain separate estimates within each stratum – which we
would not obtain if we took a simple random sample from the entire population. A more important advantage is that we
can increase the accuracy of the resulting population estimates by using appropriately defined strata.
a. True
b. False
ANSWER: True
POINTS: 1

Ch7
32. Systematic sampling is generally similar to simple random sampling in its statistical properties.
a. True
b. False
ANSWER: True
POINTS: 1
33. Consider the frame of 50 full-time employees of Computer Technologies, Inc (CTI). CTI’s human resources manager
has collected annual salary figures for all employees and she has calculated a mean of $47,723, a median of $41,082 and
a standard deviation of $24,167. A simple random sample of 10 employees is presented below (salary is in $1,000’s).
Compute the mean, median, and standard deviation for the sample and compare these statistics with the measures for
the entire company.
Employee 1 2 3 4 5 6 7 8 9 10
Salary 38.8 46.7 61.1 49.6 58.5 78.8 36.7 46.5 47.6 56.7
ANSWER: Sample statistics: mean = $52,100, median = $48,600, standard deviation = $12,279.5
Population parameters: mean = $47,723, median = $41,082, standard deviation = $24,167
The sample mean and median are larger than the corresponding population mean and median, but the
sample standard deviation is much smaller (about 51%) of the population standard deviation.
POINTS: 1
DIFFICULTY: Easy | Bloom’s: Application
34. A sales manager for a company that makes commercial ovens for restaurants is interested in estimating the average
number of restaurants in all metropolitan areas across the entire country. He does not have access to the data for each
metropolitan location, so he had decided to select a sample that will be representative of all such areas, and will use a
sample size of 30. Do you believe that simple random sampling is the best approach to obtaining a representative subset
of the metropolitan areas in the given frame? Explain. If not, recommend how the sales manager might proceed to select
a better sample of size 30 from this data?
ANSWER: Using a simple random sample may not be the best approach. If you are trying to determine the number
of restaurants in metropolitan areas, it seems as though this would be somewhat dependent on the size
(population) of the metropolitan areas under investigation. It may be better to stratify the samples. You
could divide the metropolitan areas into several strata based on their population and then sample within
each stratum. This may be more representative of the metropolitan areas across the country.
POINTS: 1
DIFFICULTY: Moderate | Bloom’s: Analysis
The manager of a small computer company has collected current annual salaries and number of years of post-secondary
education for 52 full-time employees. The data are shown below:
Current annual salaries:

Ch7
Number of years of post-secondary education:
35. (A) Compute the mean, median, and standard deviation of the annual salaries for the 52 employees in the given
frame.
(B) Use Excel® to choose a systematic sample of size 13 from the frame of annual salaries.
(C) Compute the mean, median, and standard deviation of the annual salaries for the 13 employees included in your
systematic sample in (B)
(D) Compare your statistics in (C) with your computed descriptive measures for the frame in (A). Is your systematic
sample representative of the frame with respect to the annual salary variable?
(E) Assume that we wish to stratify these employees by the number of years of post-secondary education, select such a
stratified sample of size 15 with approximately proportional sample sizes.
(F) Compute the mean, median, and standard deviation of the annual salaries for the 15 employees included in your
stratified sample in (E).
(G) Compare these statistics in (F) with your computed descriptive measures for the frame obtained in (A). Is your
stratified sample representative of the frame with respect to the annual salary variable?
ANSWER: (A) The mean, median, and standard deviation of the given frame were computed using StatTools as
shown below:
(B) In order to generate a systematic sample, we must first divide the frame size by the desired sample
size to find the relevant intervals from which we will sample. The sampling interval in this case is 4,

Ch7
meaning that every 4th salary will be included in the sample. Next, we randomly choose a number
between 1 and 4. Suppose that this number happens to be 1. This will be our starting point in the first
block of 4 salaries. To identify every 4th salary thereafter, we first developed an index column to assign
an index value to each salary. We then used the MOD function in Excel® to label every 4th salary with a
"1" in column C. Lastly, we used an IF statement to identify every value that has a "1" assigned to it. We
have now generated a systematic sample of size 13. The sample consists of the following values shown
below (read across rows):
$38,450 $109,285 $87,489 $49,638 $76,927 $90,473

$89,867 $28,743 $39,205 $54,199 $49,987 $21,750
$31,008
(C)
(D) After generating the summary measures for both the frame and the sample, we can conclude that the
sample does not represent the frame well. The mean, median, and standard deviation of the frame are all
much smaller than the mean, median, and standard deviation of the sample.
(E) This portion of the solution involves several steps. First, we noted the total sample size needed.
Second, we developed the strata we will use to separate the given frame: in this case we placed every
two years in a new stratum as shown below. Next, we generated a column labeled "Category", to place a
number between 1 and 5 next to the salary that corresponds with the stratum of that number. For
example, if the annual salary was of a person who only had 2 years of education beyond secondary
education, then a number 2 for Stratum 2 was placed next to the salary. The "Category" column was
generated using an IF statement. We then unstacked the categories in order to count the number of
salaries in each stratum. This was done by using StatTools's Data Utilities/Unstack function. Once this
was completed, we used the COUNT function in Excel® to count the number of values in each stratum
and then generated proportional numbers for each stratum with respect to the size of the given
population. Once the proportions are generated, we used the random number function in Excel® to assign
a random number to each salary. Then, by using Excel® to sort the salaries in each stratum by their
random number (in this case by ascending number) we selected the salaries in each stratum that will be
included in the sample. These salaries are shown below.

Ch7
(F)
(G) When looking at the mean, median, and standard deviation of both the sample and population, we
can conclude that the stratified sample represents the population fairly well, although the summary
measures are all slightly lower than those of the population.
POINTS: 1
Suppose that you are an entrepreneur interested in establishing a new Internet-based auction service. Furthermore,
suppose that you have gathered basic demographic information on a large number of Internet users. You currently have
information on 1000 individuals related to their gender, age, education, marital status, annual household income, and
number of people in household. Assume that these individuals were carefully selected through stratified sampling.
36. (A) To assess potential interest in your proposed enterprise, you would like to conduct telephone interviews with a
representative subset of the 1000 Internet users. How would you proceed to stratify the given frame of 1000 individuals to
choose 50 for telephone interviews? Explain your approach.
(B) Explain how you could apply cluster sampling to obtain a sample size of 50 from this frame. What are the advantages
and disadvantages of employing cluster sampling in this case?
ANSWER: (A) Which of these factors will have an impact on the use of the auction service? You may want to use
gender, age, and annual household income. You should attempt to gather data on individuals that
Ch7
represent the different gender, age, and annual income groups that represent your customers. You may
find that you have different responses between these groups.
(B) You may decide that you want to sample 50 people in your immediate area. You can use your local
phone directory and call customers in your area. This type of sampling is convenient and is less costly.
The drawback is that the inference drawn from this type of sample may not be representative of the entire
population.
POINTS: 1
A statistics professor has just given the final examination in his introductory statistics course. In particular, he is interested
in learning how his class of 50 students performed on this exam. The data are shown below.
78 72 73 75 79 72 75 77 71 78
83 84 71 81 82 79 71 73 89 74
75 93 74 88 83 90 82 79 62 73
88 76 76 76 80 84 84 91 70 76
74 68 80 87 92 84 79 80 91 74
37. (A) Using these 50 students as the frame, use Excel® to generate a simple random sample of size 10 from this frame.
(B) Compute the mean scores in the frame and the simple random sample you generated in (A).
(C) Compare the mean scores you computed in (B). Is your simple random sample a good representative of the frame?
Why or why not?
(D) Using these 50 students as the frame, use Excel® to generate a systematic sample of size 10 from this frame.
(E) Compare the mean scores in the frame with that in the systematic sample in (D). What do you conclude?
ANSWER:
In order to solve this problem, we first generated an index value for each score in the given frame. Then
we used StatTool’s Random Sample tool in the Data Utilities section to generate a simple random sample
of scores from the population. Lastly, we used VLOOKUP function to find the corresponding score for
each index value. This process resulted in the following sample:
Index 6 34 37 10 26 24 32 36 4 33
Score 72 76 84 78 90 88 76 84 75 76
(B) Population mean score = 78.92, Sample mean score = 79.90 in the above case.
(C) The mean of the sample generated from the given frame of scores is clearly very close to the mean of
the population. Therefore we may conclude that the simple random sample is fairly representative of the
population of introductory statistics final exam scores.
(D) In order to generate a systematic sample, we must first divide the frame size (50) by the desired
sample size (10) to find the relevant intervals from which we will sample. The sampling interval in this
case is 5, meaning that every 5th score will be included in the sample. Next, we randomly choose a
number between 1 and 5. Suppose that this number happens to be 1. This will be our starting point in the
first block of 5 scores. To identify every 5th score thereafter, we first developed an index column to assign
an index value to each score. We then used the MOD function in Excel® to label every 5th score with a “1”
assigned to it. We have now generated a systematic sample of size 10. The sample consists of the
following values: 78, 72, 83, 79, 75, 90, 88, 84, 74, and 84.

Ch7
(E) The means of the frame and of the sample were found to be 78.92 and 80.7, respectively. We see
that these means are very close. From this analysis, we can conclude that the systematic sample is fairly
representative of the frame or population.
POINTS: 1
DIFFICULTY: Easy | Bloom’s: Analysis
A university bookstore manager is mildly concerned about the number of textbooks that were under-ordered and thus
unavailable two days after the beginning of classes. The manager instructs an employee to pick a random number, go to
the place where that number book is shelved, examine the next 50 titles, and record how many titles are unavailable.
38. (A) Technically, this process does not yield a random sample of the books in the store. Why not?
(B) How could a truly random sample be obtained?

ANSWER: (A) For true random sampling, all possible combinations of 50 books must have equal probability of being
sampled. In this process, books that are shelved far from each other could not be in the same sample.
Thus not all combinations would have equal probability; some would have probability 0.
(B) Obtain an inventory list of all book titles and number the books. Use a table of random numbers (or
computer generated random numbers) to select 50 books to be examined.
POINTS: 1
Sally Bird of Big Rapids Realty has received data on 60 houses that were recently sold in Mecosta County in Michigan.
The data are recorded in the table shown below. Included in this data set are observations for each of the following
variables:
· The appraised value of each house (in thousands of dollars)

· The selling price of each house (in thousands of dollars)
· The size of each house (in hundreds of square feet)
· The number of bedrooms in each house

Ch7
39. (A) Suppose that Sally wishes to examine a representative subset of these 60 houses that has been stratified by the
number of bedrooms. Use Excel® to assist her by finding such a stratified sample of size 10 with proportional sample
sizes.
(B) Explain how Sally could apply cluster sampling in selecting a sample of size 15 from this frame.
(C) What are the advantages and disadvantages of employing cluster sampling in this case?
ANSWER:
(A) In this problem, the stratified sample was found by using strata that were based on the number of
bedrooms in the house. Once we established how to stratify the frame, we unstacked the prices
according to the strata (in this case, the number of bedrooms). This was done by using StatPro’s Data
Utilities/Unstack variables. Once this was completed, we counted the number of houses in each stratum
and then assigned a proportional size to each stratum relative to the size of the frame (in this case, size
of the frame is 60). After the proportions were generated, we used Excel to generate a random number
for each price in each stratum. Next, we used the sort function in Excel® to place the prices in order of
ascending random numbers. We then chose the prices to be included in the stratified sample. These
results are shown below. Note that the stratified sample size is 11 (not 10) due to rounding.
HOUSE # BEDROOMS PRICE

17 2 132.54
29 2 111.95
18 2 114.33
2 2 111.70
1 3 132.98
45 3 136.16
27 3 153.69
34 3 127.30
12 4 136.51
32 4 155.46

Ch7
6 5 162.03
(B) In this situation, Sally could have selected a few neighborhoods within Mecosta County, Michigan,
and obtained all the sample information from the selected neighborhoods.
(C) By using cluster sampling, Sally would be able to generate her sample more quickly and conveniently.
The disadvantage of cluster sampling in this case is that Sally would have to make sure she selected
neighborhoods that fairly represented the variety of households in the county. For example, if the county
had a large variety of homes with only 2 bedrooms, but the sample neighborhoods selected mostly
contained homes with 4 bedrooms, the sample information would not fairly represent the entire frame. If
this were the case, cluster sampling would not be a good way to select a sample.
POINTS: 1
DIFFICULTY: Moderate | Bloom’s: Application
40. The standard error of sample mean is large when the observations in the population are spread out (large ), but
that the standard error can be reduced by taking a smaller sample.
a. True
b. False
ANSWER: False
POINTS: 1
TOPICS: A-Head: 7-4 Introduction to Estimation
41. Which of the following statements correctly describe estimation?

a. It is the process of inferring the values of known population parameters from those of unknown sample
statistics.
b. It is the process of inferring the values of unknown sample statistics from those of known population
parameters.
c. It is the process of inferring the values of known sample statistics from those of unknown population
parameters.
d. It is the process of inferring the values of unknown population parameters from those of known sample
statistics.
ANSWER: d
POINTS: 1
42. A sampling error is the result of:

a. measurement error b. nonresponse bias
c. nontruthful responses d. "unlucky" sampling
ANSWER: d
POINTS: 1
Ch7
43. The standard deviation of is usually called the:

a. standard error of the mean b. standard error of the sample
c. standard error of the population d. randomized standard error
ANSWER: a
POINTS: 1
44. When a portion of the sample does not respond to the survey, ____ has occurred.
a. a measurement error
b. nonresponse bias
c. a sampling error
d. systematic failure
e. a nonlinear error
ANSWER: b
POINTS: 1
45. The accuracy of the point estimate is measured by its:

a. standard deviation b. standard error
c. sampling error d. nonsampling error
ANSWER: b
POINTS: 1
46. The sampling mean is the ____ estimate for the population mean .
a. random b. point
c. simple d. interval
ANSWER: b
POINTS: 1
47. Non-truthful response is a particular problem when:

a. sensitive questions are asked b. surveys are anonymous
c. interviewers are not trained d. the sample is from an unusual population

Ch7
ANSWER: a
POINTS: 1
48. Measurement error occurs when:

a. a portion of the sample does not respond to the survey
b. the sample responses are not clear
c. the responses to question do not reflect what the investigator had in mind
d. the investigator does not correctly tally all responses
ANSWER: c
POINTS: 1
49. The two basic sources for error when using random sampling are:
a. sampling and selection
b. identification and selection
c. sampling and nonsampling
d. bias and randomness
e. linear and nonlinear
ANSWER: c
POINTS: 1
50. Sampling error is evident when:

a. a question is poorly worded and results in bias
b. the sample is too small
c. the sample is not random
d. the sample mean differs from the population mean
ANSWER: d
POINTS: 1
51. The opportunity for sampling error is decreased by:

a. larger sample sizes b. smaller sample sizes
c. affluent samples d. educated samples
ANSWER: a

Ch7
POINTS: 1
52. The theorem that states that the sampling distribution of the sample mean is approximately normal when the
sample size n is reasonably large is known as the:
a. central limit theorem b. central tendency theorem
c. simple random sample theorem d. point estimate theorem
ANSWER: a
POINTS: 1
53. There is an approximately _____% chance that any particular will be within two standard deviations of the
population mean ( ).
a. 90 b. 95
c. 99 d. 99.7
ANSWER: b
POINTS: 1
54. Which of the following statements are correct?

a. A point estimate is an estimate of the range of a population parameter
b. A point estimate is a single value estimate of the value of a population parameter
c. A point estimate is an unbiased estimator if its standard deviation is the same as the actual value of the
population standard deviation
d. All of these choices are correct
ANSWER: b
POINTS: 1
55. An unbiased estimator is a sample statistic:

a. used to approximate a population parameter
b. which has an expected value equal to the value of the population parameter
c. whose value is usually less than the population parameter
d. that incorporates the standard error of the mean
ANSWER: b
POINTS: 1
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56. Which of the following statements is correct?

a. A confidence interval describes a range of values that is likely not to include the actual population parameter
b. A confidence interval is an estimate of the range for a sample statistic.
c. A confidence interval is an estimate of the range of possible values for a population parameter.
d. None of these statements is correct.
ANSWER: c
POINTS: 1
57. The approximate standard error of the sample mean is calculated as:
a. b.
c. d.
ANSWER: b
POINTS: 1
58. The approximate 95% confidence interval for a population mean is:
a. b.
c. d.
ANSWER: d
POINTS: 1
59. The finite population correction factor, , should generally be used when:
a. N is any finite size

b. n is less than 5% of the population size N
c. n is greater than 5% of the population size N
d. n is any finite size
ANSWER: c
POINTS: 1
Ch7
60. The central limit theorem (CLT) is generally valid for:

a. n > 5
b. n > 10
c. n > 20
d. n > 30
e. any size n
ANSWER: d
POINTS: 1
61. The averaging effect means that as you average more and more observations from a given distribution, the variance
of the average:
a. increases
b. decreases
c. is unaffected
d. could either increase, decrease, or stay the same
ANSWER: b
POINTS: 1
62. When we sample less than 5% of the population, the finite population correction factor; fpc = , is
used to modify the formula for the standard error of the sample mean.
a. True
b. False
ANSWER: False
POINTS: 1
63. A point estimate is a single numeric value, a “best guess” of a population parameter, calculated from the sample data.
a. True
b. False
ANSWER: True
POINTS: 1

Ch7
64. The difference between the point estimate and the true value of the population parameter being estimated is called
the estimation error.
a. True
b. False
ANSWER: True
POINTS: 1
65. A confidence interval is an interval calculated from the population data, where we strongly believe the true value of
the population parameter lies.
a. True
b. False
ANSWER: False
POINTS: 1
66. The sampling distribution of any point estimate (such as the sample mean or proportion) is the distribution of the point
estimates we would obtain from all possible samples of a given size drawn from the population.
a. True
b. False
ANSWER: True
POINTS: 1
67. An unbiased estimate is a point estimate such that the mean of its sampling distribution is equal to the true value of
the population parameter being estimated.
a. True
b. False
ANSWER: True
POINTS: 1
68. The standard error of an estimate is the standard deviation of the sampling distribution of the estimate. It measures
how much estimates from different samples vary.
a. True
b. False
ANSWER: True
POINTS: 1
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69. The standard error of the estimate measures how much estimates vary from sample to sample.
a. True
b. False
ANSWER: True
POINTS: 1
70. It is customary to approximate the standard error of the sample mean by substituting the sample standard
deviation s for in the formula: SE( )= .
a. True
b. False
ANSWER: True
POINTS: 1
71. An estimator is said to be unbiased if the mean of its sampling distribution equals the value of the population
parameter being estimated.
a. True
b. False
ANSWER: True
POINTS: 1
72. Estimation is the process of inferring the value of an unknown population parameter using data from a random sample
a. True
b. False
ANSWER: True
POINTS: 1
73. The central limit theorem (CLT) states that the sampling distribution of the mean is approximately normal, no matter
what the distribution of the population, as long as the sample size is large enough.
a. True
Ch7
b. False
ANSWER: True
POINTS: 1
74. When the sample size is greater than 5% of the population, the formula for the standard error of the mean should be
modified with a finite population correction.
a. True
b. False
ANSWER: True
POINTS: 1
75. The mean of the sampling distribution of always equals:

a. the population mean b. /n
c. the population standard deviation d. / n
ANSWER: a
POINTS: 1
76. The opportunity for nonsampling error is increased by:

a. larger sample sizes b. smaller sample sizes
c. affluent samples d. educated samples
ANSWER: a
POINTS: 1
OTHER: BUSPROG: Analytic | DISCB: Statistical Inference
77. The central limit theorem (CLT) is considered to be an important result in statistics because:
a. the CLT allows us to assume that the population distribution is approximately normal, provided n is reasonably
large
b. the CLT allows us to estimate the population mean without knowing the exact form of the population
distribution, provided n is reasonably large
c. the CLT allows us to construct confidence intervals for the population mean without knowing the exact form of
the population distribution, provided n is reasonably large
d. of all of these choices
ANSWER: d
POINTS: 1
Ch7
78. A sample of size 20 is selected at random from a population of size N. If the finite population correction factor is
0.9418, then N must be 169.
a. True
b. False
ANSWER: True
POINTS: 1
79. The sampling distribution of the mean will have the same mean as the original population from which the samples
were drawn.
a. True
b. False
ANSWER: True
POINTS: 1
80. The sampling distribution of the mean will have the same standard deviation as the original population from which the
samples were drawn.
a. True
b. False
ANSWER: False
POINTS: 1
81. The randomized response technique is a way of getting at sensitive information to avoid estimation errors due to
nontruthful responses.
a. True
b. False
ANSWER: True
POINTS: 1
82. Voluntary response bias occurs when the responses to questions do not reflect what the investigator had in mind.
a. True
Ch7
b. False
ANSWER: False
POINTS: 1
83. If the sample size is greater than 30, the Central Limit Theorem (CLT) will always apply.
a. True
b. False
ANSWER: False
POINTS: 1
84. The central limit theorem (CLT) says that as long as the sample size is reasonably large, there is about a 95% chance
that the magnitude of the sampling error for the mean will be no more than two standard errors.
a. True
b. False
ANSWER: True
POINTS: 1
85. The size of a sample can be selected by first determining the desired standard error and then using the formula
to calculate n.
a. True
b. False
ANSWER: True
POINTS: 1
Suppose that the average weekly earnings for employees in general automotive repair shops is $450, and that the
standard deviation for the weekly earnings for such employees is $50. A sample of 100 such employees is selected at
random.
86. (A) Find the mean and standard deviation of the sampling distribution of the average weekly earnings in the sample.
(B) Find probability that the mean of the sample is less than $445.
(C) Find the probability that the mean of the sample is between $445 and $455.
(D) Find the probability that the mean of the sample is greater than $460.
Ch7
(E) Explain why the assumption of normality about the distribution of the average weekly earnings for employees was not
involved in the answers to (A) through (D).
ANSWER: (A) E( )= = 450, and SE( )= =5
(B) P( < 445) = P(Z < -1) = 0.5000 – 0.3413 = 0.1587
(C) P(445< <455) = P(-1.0 < Z < 1.0) = 2(0.3413) = 0.6826
(D) P( > 460) = P(Z > 2.0) = 0.5000 – 0.4772 = 0.0228
(E) The sample size is large; n = 100 is greater than 30, so the distribution of the average weekly
earnings for employees is at least approximately normal.
POINTS: 1
An editor of a local newspaper is concerned with the number of errors that are found in the daily paper. In order to
understand the extent of this problem, the editor would like to estimate the average number of errors in the daily paper.
The frame in this case is the number of errors found in the daily paper for the past six months (180 issues).
87. (A) What sample size would be required for the production personnel to be approximately 95% sure that their
estimate of the average number of errors per issue is within 4 errors of the true mean? Assume that the editor’s best
estimate of the population standard deviation ( ) is 10 errors per issue.
(B) How does your answer to (A) change if the editor wants the estimate to be within 3 errors of the actual population
mean? Explain the difference in your answers to (A) and (B).
ANSWER: (A)
(B) In this case, . This shows that we need almost twice
as many observations to decrease the absolute error from 4 to 3.
POINTS: 1
A columnist for the LA Times is working to meet a deadline on a story about commuting in Los Angeles. She wants to
include information about the current price of gasoline in the Los Angeles metro area, but her source person for this type
of information has already gone home for the day. So she decides to take her own sample as she drives home, writing
down the prices she observes as she makes her way from downtown to her neighborhood in the suburbs. Below is the
data sample she obtains (units are $/gallon).
88. (A) Do you think she has obtained a true random sample?
(B) What average price could she report, based on the above sample?
(C) What average price range could she report, based on the above sample?
(D) Do you see any issues with reporting the range calculated for (C)?
Ch7
ANSWER:
(A) For a true random sample, all possible gas stations in the LA metro area must have an equal chance
of being sampled. In this case, only the stations on her route home were sampled, although they do at
least represent a variety of settings (different parts of town). Given her time constraints, this sample may
suffice, though.
(B) The sample mean is $3.23.
(C) Using the sample mean and sample standard deviation (0.185), she could calculate a 95%
confidence interval for the true mean price of $3.15/gallon to $3.30/gallon.
(D) The sample, in addition to perhaps not being truly random, may also be too small to justify using the
assumptions used calculating the range in (C). Typically we want n>30 unless the population data is
approximately normal as well.
POINTS: 1
Auditors of Old Kent Bank are interested in comparing the reported value of customer savings account balances with their
own findings regarding the actual value of such assets. Rather than reviewing the records of each savings account at the
bank, the auditors decide to examine a representative sample of savings account balances. The frame from which they
will sample is shown below.
$75.30 $614.11 $696.34 $572.08

$748.23 $21.20 $99.79 $1,233.38
$530.40 $378.37 $596.14 $239.65
$2,995.38 $1,069.06 $929.80 $259.98
$123.65 $68.92 $192.35 $754.45
$309.00 $163.31 $71.75 $904.92
$40.70 $161.12 $459.38 $171.48
$402.81 $157.44 $41.81 $87.08
$489.97 $468.12 $400.57 $319.40
$533.82 $1,801.35 $1,666.50 $37.16
$85.92 $91.43 $193.14 $106.95
$214.62 $10.62 $582.18 $39.65
$123.66 $76.33 $291.73 $398.48
$659.18 $101.24 $1,740.47 $322.26
$1,509.34 $1,599.04 $358.62 $492.05
$1,052.68 $596.33 $100.54 $1,288.70
$421.46 $1,799.51 $581.21 $571.63
$180.58 $98.82 $358.68 $38.93
$874.78 $2,761.93 $750.44 $376.60
$269.48 $456.79 $216.81 $305.49
89. (A) What sample size would be required for the auditors to be approximately 95% sure that their estimate of the
average savings account balance at this bank is within $150 of the true mean? Assume that their best estimate of the
population standard deviation is $300.
(B) Choose a simple random sample of the size found in (A).
(C) Compute the observed sampling error based on the sample you have drawn from the population. How does the actual
sampling error compare to the maximum possible probable absolute error established in (A)? Explain

Ch7
ANSWER: (A)
(B) The simple random sample of size 16 was generated using StatTool’s Random Sample tool in the
Data Utilities section. Next, the VLOOKUP function was used to place the appropriate balances next to
the customers that were selected to be included in the sample. The following sample was obtained.
Customer Balance
40 456.79
51 193.14
63 239.65
37 1799.51
8 402.81
20 269.48
42 99.79
39 2761.93
78 38.93
3 530.40
35 1599.04
64 259.98
14 659.18
32 10.62
11 85.92
68 87.08
(C)
Based on the above sample (results will differ):
The sample mean = $593.39
The frame mean = $537.31
The sampling error is the difference between the sample mean and the frame mean. In this case, the
sampling error is $56.08, which is much less than the maximum probable absolute error of $150. This is
the case because the maximum probable absolute error is, by definition, the largest possible amount that
will still give 95% certainty. As illustrated here, the observed sampling error is smaller than the largest
possible error.
POINTS: 1
90. A cannery claims that its sardine cans have a net weight of 8 oz., with a standard deviation of 0.1 oz. You take a
simple random sample of 30 cans and encounter a sample mean of 7.85 oz. Are you inclined to believe the claim?
ANSWER: The sampling distribution of is normal (since n 30) with mean and standard deviation given by E(
)= = 8, and SE( )= = 0.0183, respectively.
Therefore, P( < 7.8) = P(Z < -8.2) = 0. If the claim were true, such a sample would not be
encountered. The cannery management is not telling the truth.
POINTS: 1
The manager of a local fast-food restaurant is interested in improving service provided to customers who use the
restaurant’s drive-up window. As a first step in the process, the manager asks his assistant to record the time (in minutes)
it takes to serve a large number of customers at the final window in the facility’s drive-up system. The given frame in this
case is 200 customer service times observed during the busiest hour of the day for this fast-food restaurant. The frame of
200 service times yielded a mean of 0.881. A simple random sample of 10 from this frame is presented below.

Ch7
Customer 1 2 3 4 5 6 7 8 9 10
Service time 1.02 1.18 0.95 0.90 0.85 1.10 0.75 0.60 1.25 1.00
91. (A) Compute the point estimate of the population mean from the sample above. What is the sampling error in this
case? Assume that the population consists of the given 200 customer service times.
(B) Compute the point estimate of the population standard deviation from the sample above.
(C) Should you use the finite population correction (fpc) factor to estimate the standard error of ? Explain. If your
answer is yes, what is the value of the fpc?
(D) Determine a good approximation to the standard error of the mean in this case.
ANSWER: (A) Sample mean = 0.96. Then, sampling error = 0.96 – 0.881 = 0.079
(B) s = 0.1963
(C) Yes, we should use the finite population correction factor in this case, since a sample size of 10 is 5%
of population size of 200. Here fpc = = 0.9771.
(D)
POINTS: 1
A battery manufacturer wants to estimate the average number of defective (or dead) batteries contained in a box shipped
by the company. Production personnel at this company have recorded the number of defective batteries found in each of
the 2000 boxes shipped in the past week.
92. (A) What sample size would be required for the production personnel to be approximately 95% sure that their
estimate of the average number of defective batteries per box is within 0.3 unit of the true mean? Assume that the best
estimate of the population standard deviation ( ) is 0.9 defective batteries per box.
(B) How does your answer to (A) change if the production personnel want their estimate to be within 0.5 unit of the actual
population mean? Evaluate the tradeoff between required accuracy and sample size requirement for this case and the
case in (A).
ANSWER: (A)
(B) In this case, . This shows that we need almost 3
times as many observations to reduce the absolute error from 0.5 to 0.3 units. However, 36 is still a
relatively small sample, and may be with it to keep the absolute error within 0.3 units.
POINTS: 1
DIFFICULTY: Challenging | Bloom’s: Analysis

Business Analytics Data Analysis and Decision Making 6th Edition Albright Test Bank

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Business Analytics Data Analysis and

Decision Making 6th Edition Albright

2. A judgmental sample is a sample in which the:

3. Potential sample members, called sampling units, are:

4. In sampling, a population is:

5. A list of all members of the population is called a:

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12. Identifiable subpopulations within a population are called:

13. The defining property of a simple random sample is that:

16. Which statement is true of proportional sample sizes?

24. The key to using stratified sampling is:

25. If systematic sampling is chosen as the sampling technique, it is probably because:

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Current annual salaries:

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Number of years of post-secondary education:

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$38,450 $109,285 $87,489 $49,638 $76,927 $90,473

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(B) How could a truly random sample be obtained?

· The appraised value of each house (in thousands of dollars)

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HOUSE # BEDROOMS PRICE

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41. Which of the following statements correctly describe estimation?

42. A sampling error is the result of:

43. The standard deviation of is usually called the:

45. The accuracy of the point estimate is measured by its:

47. Non-truthful response is a particular problem when:

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48. Measurement error occurs when:

50. Sampling error is evident when:

51. The opportunity for sampling error is decreased by:

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54. Which of the following statements are correct?

55. An unbiased estimator is a sample statistic:

56. Which of the following statements is correct?

a. N is any finite size

60. The central limit theorem (CLT) is generally valid for:

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75. The mean of the sampling distribution of always equals:

76. The opportunity for nonsampling error is increased by:

(B) The sample mean is $3.23.

$75.30 $614.11 $696.34 $572.08

(B) Choose a simple random sample of the size found in (A).

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