Business Statistics
Textbook Exam Questions
Course Introduction
Business Statistics is a foundational course that introduces students to statistical concepts and techniques used in business decision-making. The course covers topics such as data collection, descriptive statistics, probability distributions, sampling methods, hypothesis testing, regression analysis, and correlation. Students learn how to analyze business data, interpret statistical results, and apply quantitative methods to real-world business scenarios. Emphasis is placed on developing skills to critically evaluate statistical information and make informed decisions in areas such as marketing, finance, operations, and management.
Recommended Textbook
Business Statistics A First Course 6th Edition by David M. Levine Timothy C. Krehbiel
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Page 2
Chapter 1: Introduction
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Sample Questions
Q1) The brand of TV one owns is an example of a numerical variable.
A)True
B)False
Answer: False
Q2) A personal computer user survey was conducted. The number of computer magazine subscriptions is an example of a ________ numerical variable.
Answer: discrete
Q3) Whether the university is private or public is an example of a categorical variable.
A)True
B)False
Answer: True
Q4) The classification of student major (accounting, economics, management, marketing, other)is an example of
A) a categorical random variable.
B) a discrete random variable.
C) a continuous random variable.
D) a parameter.
Answer: A
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Page 3
Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) Referring to Table 2-5, what is the width of each class?
A) 1 minute
B) 5 minutes
C) 2%
D) 100%
Answer: B
Q2) Referring to Table 2-18, how many students have a satisfaction level of at least 80?
Answer: 15
Q3) Referring to Table 2-6, ________ percent of the students in the sample spent the weekend studying and did well on the midterm.
A) 40
B) 50
C) 72.72
D) 80
Answer: A
Q4) Referring to Table 2-12, of those neutral in the sample, ________ percent were males.
Answer: 40
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Page 4
Chapter 3: Numerical Descriptive Measures
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Sample Questions
Q1) Referring to Table 3-12, you will expect a decrease in the amount of energy drink consumed within the week prior to the exam to be associated with
A) no predictable change in the amount of energy drink consumed after the exam.
B) an increase in the exam score.
C) a decrease in the exam score.
D) no predictable change in the exam score.
Answer: D
Q2) According to the Chebyshev rule, at least 75% of all observations in any data set are contained within a distance of how many standard deviations around the mean?
A) 1
B) 2
C) 3
D) 4
Answer: B
Q3) Referring to Table 3-10, what is the sample correlation coefficient between the DJIA and the S&P 500 Index?
Answer: 0.9274
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Chapter 4: Basic Probability
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Sample Questions
Q1) If A and B cannot occur at the same time the events are called mutually exclusive.
A)True
B)False
Q2) The employees of a company were surveyed on questions regarding their educational background (college degree or no college degree)and marital status (single or married). Of the 600 employees, 400 had college degrees, 100 were single, and 60 were single college graduates. The probability that an employee of the company is single or has a college degree is ________.
A) 0.10
B) 0.25
C) 0.667
D) 0.733
Q3) Referring to Table 4-1, given that alcohol was not involved, what proportion of the accidents were single vehicle?
A) 50/75 or 66.67%
B) 25/230 or 10.87%
C) 50/170 or 29.41%
D) 25/75 or 33.33%
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Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) A certain type of new business succeeds 60% of the time. Suppose that three such businesses open (where they do not compete with each other, so it is reasonable to believe that their relative successes would be independent). Which of the following distributions would you use to determine the probability that all of them will fail?
A) binomial distribution
B) Poisson distribution
C) both of the above
D) none of the above
Q2) A company has 125 personal computers. The probability that any one of them will require repair on a given day is 0.025. To find the probability that exactly 20 of the computers will require repair on a given day, one will use what type of probability distribution?
A) binomial distribution
B) Poisson distribution
C) all of the above
D) none of the above
Q3) Referring to Table 5-6, what is the expected value gain for the house in neighborhood A?
Q4) Referring to Table 5-7, what is your expected profit when Design A is chosen?
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Chapter 6: The Normal Distribution
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Sample Questions
Q1) The amount of tea leaves in a can from a particular production line is normally distributed with = 110 grams and = 25 grams. What is the probability that a randomly selected can will contain less than 100 grams or more than 120 grams of tea leaves?
Q2) Referring to Table 6-3, what is the probability that a randomly selected orange will contain more than 4.2 ounces of juice?
Q3) The amount of time necessary for assembly line workers to complete a product is a normal random variable with a mean of 15 minutes and a standard deviation of 2 minutes. The probability is ________ that a product is assembled in between 16 and 21 minutes.
Q4) Suppose Z has a standard normal distribution with a mean of 0 and standard deviation of 1. The probability that Z is between -2.33 and 2.33 is ________.
Q5) Suppose Z has a standard normal distribution with a mean of 0 and standard deviation of 1. So 85% of the possible Z values are smaller than ________.
Q6) Suppose Z has a standard normal distribution with a mean of 0 and standard deviation of 1. The probability that Z is less than -2.20 is ________.
Q7) Referring to Table 6-4, 10% of the annual returns will be at least what amount?
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Page 8
Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Which of the following yields a stratified sample?
A) All students in a class are divided into groups of 15. One student is randomly chosen from the first group, the remaining observations are every 15th student thereafter.
B) The best 15 students, according to the opinion of the instructor, in a class are selected.
C) All students in a class are grouped according to their gender. A random sample of 8 is selected from the males and a separate random sample of 7 is drawn from the females.
D) The first 15 students in a class are selected without replacement.
Q2) The question: "Have you used any form of illicit drugs over the past two months?" will most likely result in measurement error if the question is answered. A)True B)False
Q3) Using different frames to generate data can lead to totally different conclusions. A)True B)False
Q4) ________ results from the failure to collect data on all subjects in the sample.
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Page 9
Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) Referring to Table 8-11, the sampling error of a 95% confidence interval estimate of the population proportion of managers who have caught salespeople giving a kickback to a customer is ________.
Q2) Referring to Table 8-4, it is possible that the 99% confidence interval calculated from the data will not contain the mean voltage for the sample.
A)True
B)False
Q3) The t distribution allows the calculation of confidence intervals for means for small samples when the population variance is not known, regardless of the shape of the distribution in the population.
A)True
B)False
Q4) The head of a computer science department is interested in estimating the proportion of students entering the department who will choose the new computer engineering option. Suppose there is no information about the proportion of students who might choose the option. What size sample should the department head take if she wants to be 95% confident that the estimate is within 0.10 of the true proportion?
Q5) Referring to Table 8-2, the confidence interval goes from ________ to ________.
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Page 10
Chapter 9: Fundamentals of Hypothesis Testing:
One-Sample Tests
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Sample Questions
Q1) The statement of the null hypothesis always contains an equality.
A)True
B)False
Q2) A Type I error is committed when
A) you reject a null hypothesis that is true.
B) you don't reject a null hypothesis that is true.
C) you reject a null hypothesis that is false.
D) you don't reject a null hypothesis that is false.
Q3) Referring to Table 9-7, the null hypothesis would be rejected.
A)True
B)False
Q4) Referring to Table 9-8, the value of the probability of committing a Type II error is 0.95.
A)True
B)False
Q5) Which of the following would be an appropriate null hypothesis?
A) The mean of a population is equal to 55.
B) The mean of a sample is equal to 55.
C) The mean of a population is greater than 55.
D) Only A and C are appropriate.
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Chapter 10: Two-Sample Tests and One-Way ANOVA
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Sample Questions
Q1) Referring to Table 10-14, state the null and alternative hypotheses for testing if the population variances differ for preservatives I and II.
A) H : I² II² 0 versus H : I² - II² < 0
B) H : I² II² 0 versus H : I² - II² > 0
C) H : I² II² = 0 versus H : I² - II² 0
D) H : I² II² 0 versus H : I² - II² = 0
Q2) Referring to Table 10-20, the null hypothesis for Levene's test for homogeneity of variances is
A) H : A = B = C = D.
B) H : MA = MB = MC = MD.
C) H : A² = B² = C² = D².
D) H : A = B = C = D.
Q3) Referring to Table 10-18, based on the Tukey-Kramer procedure with an overall level of significance of 0.05, the retailer would decide that there is a significant difference between all pairs of mean speeds.
A)True
B)False
Q4) Referring to Table 10-7, the calculated value of the test statistic is ________.
Q5) Referring to Table 10-4, the computed t statistic is ________.
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Chapter 11: Chi-Square Tests
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Sample Questions
Q1) Referring to Table 11-12, we want to test whether there is any relationship between average time spent watching TV and average time spent reading storybooks. Suppose the value of the test statistic was 164 (which is not the correct answer)and the critical value was 19.00 (which is not the correct answer). Then we could conclude that
A) there is a connection between time spent reading storybooks and time spent watching TV.
B) there is no connection between time spent reading storybooks and time spent watching TV.
C) more time spent reading storybooks leads to less time spent watching TV.
D) more time spent watching TV leads to less time spent reading storybooks.
Q2) The chi-square test of independence requires that the expected frequency in each cell to be at least 1.
A)True
B)False
Q3) A test for the difference between two proportions can be performed using the chi-square distribution.
A)True
B)False
Q4) Referring to Table 11-3, the value of the test statistic is ________.
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Chapter 12: Simple Linear Regression
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Sample Questions
Q1) Referring to Table 12-10, what is the value of the t test statistic when testing whether the number of customers who make a purchase affects weekly sales?
Q2) Referring to Table 12-2, what is the estimated slope for the candy bar price and sales data?
A) 161.386
B) 0.784
C) -3.810
D) -48.193
Q3) Referring to Table 12-13, the degrees of freedom for the F test on whether spending per student affects composite score are ________.
Q4) Referring to Table 12-13, the decision on the test of whether spending per student affects composite score using a 5% level of significance is to ________ (reject or not reject)H .
Q5) Referring to Table 12-11, the Durbin-Watson statistic is inappropriate for this data set. A)True B)False
Q6) Referring to Table 12-4, the total sum of squares (SST)is ________.
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Page 14
Chapter 13: Introduction to Multiple Regression
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Sample Questions
Q1) Referring to Table 13-3, to test whether aggregate price index has a negative impact on consumption, the p-value is ________.
A) 0.0001
B) 0.4165
C) 0.8330
D) 0.8837
Q2) Referring to Table 13-13, the effect of living in San Francisco rather than Los Angeles is to increase the mean demand by an estimated ________ per capita.
Q3) Referring to Table 13-5, what is the p-value for testing whether Capital has a positive influence on corporate sales?
A) 0.025
B) 0.05
C) 0.2743
D) 0.5485
Q4) Referring to Table 13-8, the analyst wants to use a t test to test for the significance of the coefficient of X . The p-value of the test is ________.
Q5) Referring to Table 13-10, the adjusted r² is _________.
Q6) Referring to Table 13-10, the standard error of the estimate is _________.
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Chapter 14: Statistical Applications in Quality Management
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Sample Questions
Q1) Referring to Table 14-5, the process seems to be in control.
A)True
B)False
Q2) Developing operational definitions for each critical-to-quality characteristic involves which part of the DMAIC process?
A) Define
B) Measure
C) Analyze
D) Improve
E) Control
Q3) Changes in the system to reduce common cause variation are the responsibility of management.
A)True
B)False
Q4) Referring to Table 14-9, construct an R chart for the time required to register.
Q5) Which of the following is NOT one of Deming's 14 points?
A) Belief in mass inspection.
B) Create constancy of purpose for improvement of product or service.
C) Adopt and institute leadership.
D) Drive out fear.
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