1st Semester, A.Y.

2023-2024

Econ 131 Problem Set 2

Deadline: [Indicated/posted on UVLe]

Instructions: Follow the instructions in the previous problem set. This time, however, kindly
express your probability answers in decimals. You may round off to the nearest 4 decimal
places. Example: A probability of 97.50% may be written as 0.975 or 0.9750. Total points = 25

1. (Total: 5 points; each sub-item is worth 0.5 points) Write down only the final answers to the
following 10 sub-items of item 1:
1.1. Let 𝑋𝑋 ~ 𝜒𝜒􏷡􏷡 (11). Find 𝑃𝑃(𝑋𝑋 < 17.275).

1.2. Let 𝑋𝑋 ~ 𝜒𝜒􏷡􏷡 (25). Find 𝑃𝑃(𝑋𝑋 < 16.473).

1.3. Let 𝑋𝑋 ~ 𝜒𝜒􏷡􏷡 (25). Find 𝑃𝑃(𝑋𝑋 ≤ 16.473).

1.4. Let 𝑍𝑍􏷠􏷠 , 𝑍𝑍􏷡􏷡 ~ 𝑁𝑁(0,1) and 𝑋𝑋􏷠􏷠 ~ 𝜒𝜒􏷡􏷡 (7), 𝑋𝑋􏷡􏷡 ~ 𝜒𝜒􏷡􏷡 (2).
Find 𝑃𝑃(5.578 < 𝑍𝑍􏷡􏷡􏷠􏷠 + 𝑋𝑋􏷡􏷡 + 𝑍𝑍􏷡􏷡􏷡􏷡 + 𝑋𝑋􏷠􏷠 < 17.275) and 𝑉𝑉𝑉𝑉𝑉𝑉(𝑍𝑍􏷡􏷡􏷠􏷠 + 𝑋𝑋􏷡􏷡 + 𝑍𝑍􏷡􏷡􏷡􏷡 + 𝑋𝑋􏷠􏷠 ).

1.5. Let 𝑋𝑋 ~ 𝑡𝑡(7). Find 𝑃𝑃(𝑋𝑋 < 2.365).

1.6. Let 𝑋𝑋 ~ 𝑡𝑡(7). Find 𝑃𝑃(𝑋𝑋 < −2.365).

1.7. Let 𝑋𝑋 ~ 𝑡𝑡(7). Find 𝑃𝑃(𝑋𝑋 > −2.365).

1.8. Let 𝑋𝑋 ∼ 𝐹𝐹(3, 30). Find 𝑥𝑥 such that 𝑃𝑃(𝑋𝑋 ≤ 𝑥𝑥) = 0.95

1.9. Let 𝑋𝑋 ~ 𝑡𝑡(8). Find 𝑥𝑥 such that 𝑃𝑃(𝑋𝑋 􏷡􏷡 < 𝑥𝑥) = 0.95. Find 𝑉𝑉𝑉𝑉𝑉𝑉(𝑋𝑋) and 𝐸𝐸[𝑋𝑋].
􏷢􏷢􏷢􏷢𝑋𝑋􏷪􏷪
1.10. Let 𝑋𝑋􏷠􏷠 ~ 𝜒𝜒􏷡􏷡 (40) and 𝑋𝑋􏷡􏷡 ~ 𝜒𝜒􏷡􏷡 (30). Find 𝑥𝑥 such that 𝑃𝑃 􏿵􏿵 < 𝑥𝑥􏿸􏿸 = 0.95
􏷣􏷣􏷣􏷣𝑋𝑋􏷫􏷫

2. (Total: 4 points) The population of welfare recipients receives benefits of $110 per week on
average with a standard deviation of $20. If a random sample of 36 people is taken, what is the
probability their mean benefit will be greater than $120 per week?

3. (Total: 10 points) Let {𝑋𝑋􏷠􏷠 , 𝑋𝑋􏷡􏷡 , … , 𝑋𝑋𝑛𝑛 } be a random sample of size 𝑛𝑛 (where 𝑛𝑛 > 3), i.i.d., from a
normal distribution 𝑁𝑁􏿴􏿴𝜇𝜇, 𝜎𝜎􏷡􏷡 􏿷􏿷. Consider the following estimator of 𝜇𝜇:

Θ􏾧􏾧 = 𝑋𝑋􏷠􏷠 + 𝑋𝑋􏷡􏷡 + 𝑋𝑋􏷢􏷢

3
3.1. Is it an unbiased estimator of 𝜇𝜇? (3 points)
3.2. Is it more efficient than the sample mean estimator 𝑋𝑋 􏼙􏼙 ? Note: No need to derive 𝑉𝑉𝑉𝑉𝑉𝑉(𝑋𝑋 􏼙􏼙 ). You
may invoke that known result here, if you want to. (3 points)
􏷡􏷡
3.3. Is it a consistent estimator of 𝜇𝜇? Hint: Use the following formula: 𝑀𝑀𝑀𝑀𝑀𝑀􏿴􏿴Θ 􏾧􏾧 􏿷􏿷 = 𝑉𝑉𝑉𝑉𝑉𝑉􏿴􏿴Θ
􏾧􏾧 􏿷􏿷 + 􏿮􏿮𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵􏿴􏿴Θ
􏾧􏾧 􏿷􏿷􏿱􏿱 .
You may use your answers to the previous sub-items. (4 points)

4. (Total: 6 points) A consumer group complained to the Department of Trade (DOT) that the “1
kilogram” pack of sugar being sold in a supermarket contains less than 1 kilogram. The DOT
took a random sample of 25 packs from the market and found that the average weight was 995
grams with a sample standard deviation of 5 grams. Assuming that the packs’ weights are
normally distributed, test the null hypothesis 𝐻𝐻􏷟􏷟 : 𝜇𝜇 = 1000 against 𝐻𝐻􏷠􏷠 : 𝜇𝜇 ≠ 1000, at 𝛼𝛼 = 5%. Do a
two-sided test, with all 6 prescribed steps for hypothesis testing we discussed in class. Be concise.

*nothing follows*