Econometrics for Business Test Bank
Course Introduction
Econometrics for Business introduces students to the fundamental concepts and quantitative techniques used to analyze economic and business data. The course covers essential topics such as regression analysis, hypothesis testing, model specification, and forecasting, with a focus on real-world business applications. Through practical exercises and case studies, students learn how to critically evaluate data, interpret statistical results, and make informed business decisions based on empirical evidence. By the end of the course, students will have gained hands-on experience with econometric software tools and developed the analytical skills necessary to tackle complex business challenges using data-driven approaches.
Recommended Textbook
Statistical Techniques in Business and Economics 17th Edition by Douglas Lind
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Chapter 1: What Is Statistics
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Sample Questions
Q1) To infer something about a population,we usually take a sample from the population.
A)True
B)False
Answer: True
Q2) The length of a bridge,measured in meters,is an example of A)categorical data.
B)either categorical or quantitative data.
C)measurement data.
D)quantitative data.
Answer: D
Q3) A university wishes to conduct a student survey. In one of the questions students are asked to mark their gender as either male or female. Gender is an example of the A)ordinal scale.
B)nominal scale.
C)ratio scale.
D)interval scale.
Answer: B
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Chapter 2: Describing Data: Frequency Tables, Frequency
Distributions, and Graphic Presentation
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Sample Questions
Q1) In a bar chart,the heights of the bars represent the frequencies in each class.
A)True
B)False
Answer: True
Q2) Refer to the following information from a frequency distribution for heights of college women recorded to the nearest inch: the first two class midpoints are 62.5" and 65.5". What are the class limits for the lowest class?
A)61 and up to 64
B)62 and up to 64
C)62 and 65
D)62 and 63
Answer: A
Q3) A cumulative frequency distribution is used when we want to determine how many observations lie above or below certain values.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Describing Data: Numerical Measures
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Sample Questions
Q1) For a data set,half of the observations are always greater than the ________.
A)median
B)mode
C)mean
D)standard deviation
Answer: A
Q2) Production of passenger cars in Japan increased from 3.94 million in 1999 to 6.74 million in 2009. What is the geometric mean annual percent increase?
A)4.0
B)1.9
C)5.5
D)16.6
E)47.3
Answer: C
Q3) For any distribution,there is an equal number of values above and below the mean.
A)True
B)False
Answer: False
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Chapter 4: Describing Data: Displaying and Exploring Data
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Sample Questions
Q1) A large oil company is studying the number of gallons of gasoline purchased per customer at self-service pumps. The mean number of gallons is 10.0,with a standard deviation of 3.0 gallons. The median is 10.75 gallons. What is Pearson's coefficient of skewness in this instance?
A) 1.00
B) 0.75
C)+0.75
D)+1.00
Q2) The 75th percentile is referred to as the ________.
A)first quartile
B)second quartile
C)third quartile
D)fourth quartile
Q3) If a student places in the 99th percentile on an exam,she performed better than 99% of all students who completed the exam. Her performance is similar to a statement based on a ________.
A)frequency table
B)cumulative frequency distribution
C)histogram
D)pie chart
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Chapter 5: A Survey of Probability Concepts
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Sample Questions
Q1) The ABCD football association is considering a Super Ten Football Conference. The top 10 football teams in the country,based on past records,would be members of the Super Ten Conference. Each team would play every other team in the conference during the season and the team winning the most games would be declared the national champion. How many games would the conference commissioner have to schedule each year? (Remember,Oklahoma versus Michigan is the same as Michigan versus Oklahoma.)
A)45
B)50
C)125
D)14
Q2) A method of assigning probabilities based upon judgment,opinions,and available information is referred to as the ________.
A)empirical method
B)probability method
C)classical method
D)subjective method
Q3) Bayes' theorem is used to calculate a subjective probability.
A)True
B)False
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) When sampling is done without replacement from a finite population and the outcomes are measured as either a success or failure,the hypergeometric distribution should be applied.
A)True
B)False
Q2) Chances are 50-50 that a newborn baby will be a girl. For families with five children,what is the probability that all the children are girls?
A)0.900
B)0.031
C)0.001
D)0.250
Q3) David's gasoline station offers 4 cents off per gallon if the customer pays in cash and does not use a credit card. Past evidence indicates that 40% of all customers pay in cash. During a one-hour period,15 customers buy gasoline at this station. What is the probability that at least 10 pay in cash?
A)0.024
B)0.033
C)0.009
D)0.976
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Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) For any uniform probability distribution,the mean and standard deviation can be computed based on the maximum and minimum values of the random variable.
A)True
B)False
Q2) The standard normal probability distribution is unique because it has ________.
A)a mean of 1 and any standard deviation
B)any mean and a standard deviation of 1
C)a mean of 0 and any standard deviation
D)a mean of 0 and a standard deviation of 1
Q3) The weight of cans of fruit is normally distributed with a mean of 1,000 grams and a standard deviation of 50 grams. What percent of the cans weigh 860 grams or less?
A)0.0100
B)0.8400
C)0.0026
D)0.0001
Q4) For a uniformly distributed random variable,x,P(x)is constant.
A)True
B)False
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Chapter 8: Sampling Methods and the Central Limit
Theorem
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Sample Questions
Q1) For a distribution of sample means constructed by sampling 5 items from a population of 15,________.
A)the sample size is 15
B)there will be 3,003 possible sample means
C)the mean of the sample means will be 3
D)the standard error will be 1
Q2) When doing research,knowing the population mean and other population parameters is essential.
A)True
B)False
Q3) The Intelligence Quotient (IQ)test scores for adults are normally distributed with a population mean of 100 and a population standard deviation of 15. What is the probability we could select a sample of 50 adults and find that the mean of this sample exceeds 104?
A)0.0294
B)0.9412
C)Approximately 1
D)0.9706
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Chapter 9: Estimation and Confidence Intervals
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Sample Questions
Q1) A point estimate is a single value used to estimate a population parameter.
A)True
B)False
Q2) The population variation has little or no effect in determining the size of a sample selected from the population.
A)True
B)False
Q3) An interval estimate is a range of values in which the population parameter is likely to occur.
A)True
B)False
Q4) A sample of 100 is selected from a known population of 350 elements. The population standard deviation is 15. Using the finite correction factor,what is the standard error of the sample means?
A)12.6773
B)0.8452
C)1.2695
D)Cannot be determined
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Chapter 10: One-Sample Tests of Hypothesis
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Sample Questions
Q1) The mean annual incomes of certified welders are normally distributed with the mean of $50,000 and a population standard deviation of $2,000. The ship building association wishes to find out whether their welders earn more or less than $50,000 annually. A sample of 100 welders is taken and the mean annual income of the sample is $50,350. If the level of significance is 0.10,what conclusion should be drawn?
A)Do not reject the null hypothesis as the test statistic is less than the critical value of z.
B)Do not reject the null hypothesis as the test statistic is less than the critical value of t.
C)Reject the null hypothesis as the test statistic is greater than the critical value of t.
D)Reject the null hypothesis as the test statistic is greater than the critical value of z.
Q2) If we reject the null hypothesis,what can we conclude subject to the probability, ?
A)Reject the null with a probability, ,of making a Type I error.
B)The alternative hypothesis is false.
C)The null hypothesis is true.
D)Both the null hypothesis and the alternative hypothesis are true.
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Chapter 11: Two-Sample Tests of Hypothesis
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Sample Questions
Q1) Assuming the population variances are known,the population variance of the difference between two means is ________.
A)the sum of the two means
B)the sum of the two population variances
C)the sum of the two population standard deviations
D)the sum of the two sample sizes for each population
Q2) When dependent samples are used to test for differences in the means,we compute paired differences.
A)True
B)False
Q3) If we are testing for the difference between two population means and assume that the two populations have equal but unknown standard deviations,the sample standard deviations are pooled to compute the best estimated variance.
A)True
B)False
Q4) When dependent samples are used to test for differences in the means,we pool the sample variances.
A)True
B)False
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Chapter 12: Analysis of Variance
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Sample Questions
Q1) When testing for differences between treatment means,a confidence interval is computed with ________.
A)the mean square error
B)the standard deviation
C)the sum of squared errors
D)the standard error of the mean
Q2) In an ANOVA table,k represents the total number of sample observations and n represents the total number of treatments.
A)True
B)False
Q3) In a two-way ANOVA,a blocking variable is used to ________.
A)increase the error sum of squares
B)decrease the error sum of squares
C)increase the treatment sum of squares
D)decrease the treatment sum of squares
Q4) The alternative hypothesis used in ANOVA is H<sub>1</sub>: All population means are equal.
A)True
B)False
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Chapter 13: Correlation and Linear Regression
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Sample Questions
Q1) If all the plots on a scatter diagram lie on a straight line,what is the standard error of estimate?
A) 1
B)+1
C)0
D)Infinity
Q2) The coefficient of determination is the square root of the coefficient of correlation. A)True
B)False
Q3) The regression equation is = 30 + 2.56X,the sample size is 14,and the standard error of the slope is 0.97. What is the test statistic to test the significance of the slope?
A)z = 2.560
B)z = +2.639
C)t = +2.560
D)t = +2.639
Q4) The standard error of estimate measures the accuracy of a prediction.
A)True
B)False
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Chapter 14: Multiple Regression Analysis
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Sample Questions
Q1) The best example of a null hypothesis for a global test of a multiple regression model is ________.
A)H<sub>0</sub>: <sub>1</sub> = <sub>2</sub> = <sub>3</sub> = <sub>4</sub> = 0
B)H<sub>0</sub>: µ<sub>1</sub> = µ<sub>2</sub> = µ<sub>3</sub> = µ<sub>4</sub> = 0
C)H<sub>0</sub>: <sub>1</sub> = 0
D)if F is greater than 20.00,then reject
Q2) What can we conclude if the global test of regression rejects the null hypothesis?
A)Strong correlations exist among the variables.
B)No relationship exists between the dependent variable and any of the independent variables.
C)At least one of the regression coefficients is not equal to zero.
D)Good predictions are not possible.
Q3) When does multicollinearity occur in a multiple regression analysis?
A)When the dependent variables are highly correlated
B)When the regression coefficients are correlated
C)When the independent variables are highly correlated
D)When the independent variables have no correlation
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Chapter 15: Nonparametric Methods: Nominal Level
Hypothesis Tests
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Sample Questions
Q1) The claim that "40% of those persons who retired from an industrial job before the age of 60 would return to work if a suitable job was available" is to be investigated at the 0.02 significance level. If 74 out of the 200 workers sampled said they would return to work,what is our decision?
A)Do not reject the null hypothesis because 0.866 lies in the region between +2.326 and 2.326.
B)Do not reject the null hypothesis because 0.866 lies in the region between +2.576 and 2.576.
C)Reject the null hypothesis because 37% is less than 40%.
D)Do not reject the null hypothesis because 37% lies in the area between 0% and 40%.
Q2) What is the decision regarding the differences between the observed and expected frequencies if the critical value of the chi-square is 9.488 and the computed chi-square value is 6.079?
A)Fail to reject the null hypothesis; the difference is probably due to sampling error.
B)Reject the null hypothesis.
C)Fail to reject the alternate hypothesis.
D)It is too close; reserve judgment.
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Chapter 16: Nonparametric Methods: Analysis of Ordinal
Data
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Sample Questions
Q1) In the Wilcoxon signed-rank test,the ranks are ________.
A)assigned to paired observation with a difference of zero
B)assigned for each sample
C)assigned the sign (either positive or negative)of the difference between a pair of observations
D)all positive in sign
Q2) The decision rule for a small sample sign test is based on a(n)________.
A)binomial distribution
B)chi-square distribution
C)normal distribution
D)F-distribution
Q3) A study was conducted on the percent of total advertising dollars spent by 10 local firms for advertising in the press and on cable television. Results were ranked with a resulting sum of squared differences equal to 128. What is the sum of the differences in ranks?
A)128
B)100
C)0
D)1
18
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Chapter 17: Index Numbers
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Sample Questions
Q1) The CPI for "personal computers and peripheral equipment" in June 2006 was 10.7 (1982-1984 = 100). Interpret this index.
A)There was no significant increase in the price of "personal computers and peripheral equipment."
B)The price of "personal computers and peripheral equipment" increased 10.7%.
C)The price of "personal computers and peripheral equipment" decreased 89.3%.
D)If the average price of a computer in 1982-1984 was $3,000,the CPI for "personal computers and peripheral equipment" would predict that the price of a computer in June 2006 would be $893.
Q2) How can indexes be classified?
A)Price
B)Quantity
C)Value
D)Weighted or unweighted
Q3) A value index method computes a simple aggregate index.
A)True
B)False
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Chapter 18: Time Series and Forecasting
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Sample Questions
Q1) In a time series,economic periods of prosperity followed by recession are described as a(n)________.
A)secular trend
B)seasonal variation
C)cyclical variation
D)erratic variation
Q2) The trend forecast equation is = 120 + 100t. The next forecast is for period 8. The typical seasonal index for period 8 is 0.80. What are the forecast sales for period 8?
A)736
B)920
C)800
D)640
Q3) The forecast for the third quarter is 2,000 units; the seasonal index for the quarter is 0.79. What are the seasonally adjusted sales for the quarter?
A)1,921
B)1,580
C)790
D)1,015
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Chapter 19: Statistical Process Control and Quality Management
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Sample Questions
Q1) The Quality Assurance Department selected 12 samples of 100 printed circuit boards and tested them. The number of defective printed circuit boards in each sample was 3,3,0,5,1,1,5,6,6,2,0,and 1. What kind of control chart should be constructed to monitor the process?
A)Mean chart
B)Range chart
C)Percent defective chart
D)c-bar chart
Q2) The Quality Assurance Department selected 12 samples of 100 printed circuit boards and tested them. The number of defective printed circuit boards in each sample was 3,3,0,5,1,1,5,6,6,2,0,and 1. The measurement of quality is based on ________.
A)an attribute
B)a variable
C)a scale
D)a chart
Q3) A fishbone diagram is used to determine if a process is out of control.
A)True
B)False
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Chapter 20: An Introduction to Decision Theory
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Sample Questions
Q1) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. What is the opportunity loss for purchasing seven watermelons when the demand is for six watermelons?
A)0
B)3
C)4
D)6
Q2) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. What is the payoff value for the purchase of nine watermelons when the demand is for nine watermelons?
A)6
B)13
C)20
D)27
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