Statistical Methods for Business and Economics
Pre-Test Questions
Course Introduction
This course provides an introduction to statistical concepts and techniques essential for analyzing and interpreting data in business and economics. Students will learn about data collection, descriptive statistics, probability distributions, sampling methods, hypothesis testing, correlation, regression analysis, and the use of statistical software. Emphasis is placed on applying statistical reasoning to real-world business and economic problems, enabling students to make informed decisions based on quantitative data. The course balances theoretical understanding with practical applications, equipping students with the skills necessary for effective data analysis in professional settings.
Recommended Textbook
Business Statistics A Decision Making Approach 8th Edition by David F. Groebner
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19 Chapters
2260 Verified Questions
2260 Flashcards
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Chapter 1: The Where, why, and How of Data Collection
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Sample Questions
Q1) In a survey,what is meant by demographic questions and why might we want to include demographic questions in survey?
Answer: Demographic questions are questions that pertain to the respondent such as age,gender,education level,etc.The purpose of demographic questions is to be able to group responses to the central survey questions by category of the demographic questions.For instance,we might group responses to a question about product satisfaction by male/female to see whether males and females have different views about the product.
Q2) Some of the most common methods of collecting data include experiments,telephone surveys,mail questionnaires,and direct observations and personal interviews.
A)True
B)False
Answer: True
Q3) Nominal data is the highest level of data.
A)True
B)False
Answer: False
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Chapter 2: Graphs,charts and Tablesdescribing Your Data
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Sample Questions
Q1) To show the relationship between amount of rainfall and the number of car accidents,the best type of graph to use is a scatter diagram.
A)True
B)False
Answer: True
Q2) Two separate frequency distributions for two variables provide the same information as one joint frequency distribution involving the same two variables.
A)True
B)False
Answer: False
Q3) When the Histogram tool in Excel is used to construct a frequency distribution and histogram,the default histogram is in the proper format and will require only that you add appropriate labels.
A)True
B)False
Answer: False
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Chapter 3: Describing Data Using Numerical Measures
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Sample Questions
Q1) A major retail store has studied customer behavior and found that the distribution of time customers spend in a store per visit is symmetric with a mean equal to 17.3 minutes.Based on this information,which of the following is true?
A)The distribution is bell-shaped.
B)The median is to the right of the mean.
C)The median is approximately 17.3 minutes.
D)The median is to the left of the mean.
Answer: C
Q2) A set data in which the mean,median,and mode are all equal is said to be a skewed distribution.
A)True
B)False
Answer: False
Q3) The box and whisker plot can be used to identify A)skewedness.
B)centerness.
C)outliers.
D)symmetry.
Answer: C
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Page 5
Chapter 4: Using Probability and Probability Distributions
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Sample Questions
Q1) During the past week,of the 250 customers at the Dairy Queen who ordered a Blizzard,50 ordered strawberry.This means that of the next five Blizzard customers,exactly one will order strawberry.
A)True
B)False
Q2) Of the last 100 customers entering a computer shop,25 have purchased a computer.If the classical probability assessment for computing probability is used,the probability that the next customer will purchase a computer is A)0.25.
B)0.50.
C)1.00.
D)0.75.
Q3) Mutually exclusive means that the occurrence of event A has no effect on the probability of the occurrence of event B,and independent means the occurrence of event A prevents the occurrence of event B.
A)True
B)False
Q4) Explain what is meant by the term mutually exclusive events.Cite an example.
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6
Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) When a single die is rolled,each of the six sides are equally likely.This is an example of a uniform distribution.
A)True B)False
Q2) A probability distribution with an expected value greater than the expected value of a second probability distribution will also have a higher standard deviation.
A)True B)False
Q3) If the number of defective items selected at random from a parts inventory is considered to follow a binomial distribution with n = 50 and p = 0.10,the expected number of defective parts is: A)5.
B)approximately 2.24. C)more than 10.
D)0.5.
Q4) Explain how to determine whether the binomial distribution can be used in a particular application.
Q5) Explain what the expected value of a discrete random variable measures.
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Chapter 6: Introduction to Continuous Probability
Distributions
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Sample Questions
Q1) Employees at a large computer company earn sick leave in one-minute increments depending on how many hours per month they work.They can then use the sick leave time any time throughout the year.Any unused time goes into a sick bank account that they or other employees can use in the case of emergencies.The human resources department has determined that the amount of unused sick time for individual employees is uniformly distributed between 0 and 480 minutes.Based on this information,what is the probability that three randomly chosen employees have over 400 unused sick minutes at the end of the year?
A)0.1667
B)0.0046
C)0.5001
D)0.0300
Q2) Suppose the time it takes for a customer to be served at a fast-food chain business is thought to be uniformly distributed between 3 and 8 minutes,then the probability that a customer is served in less than 3 minutes is 0.
A)True
B)False
Q3) What is the difference between a normal distribution and the standard normal distribution?
Page 8
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Chapter 7: Introduction to Sampling Distributions
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Sample Questions
Q1) The size of the sampling error that comes from a random sample depends on both the variation in the population and the size of the sample being selected.
A)True
B)False
Q2) A larger sample size reduces the potential for large sampling error.
A)True
B)False
Q3) If a population is not normally distributed,then the sampling distribution for the mean also cannot be normally distributed.
A)True
B)False
Q4) A sample proportion can be assumed normally distributed if n 30.
A)True
B)False
Q5) If a population is normally distributed,then the sampling distribution for the sample mean will always be normally distributed regardless of the sample size.
A)True B)False
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Page 9
Chapter 8: Estimating Single Population Parameters
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Sample Questions
Q1) If a manager believes that the required sample size is too large for a situation in which she desires to estimate the mean income of blue collar workers in a state,which of the following would lead to a reduction in sample size?
A)Reduce the level of confidence
B)Allow a higher margin of error
C)Somehow reduce the variation in the population
D)All of the above.
Q2) If a pilot sample of n = 40 items has been used as a first step in determining a required sample size of n = 360,the decision maker can go ahead and use these 40 and take a sample of only 320 more items.
A)True
B)False
Q3) In developing a confidence interval estimate for the population mean,the t-distribution is used to obtain the critical value when:
A)the sample contains some extreme values that skew the results.
B)the population standard deviation is unknown.
C)the sampling that is being used is not a statistical sample.
D)the confidence level is low.
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Chapter 9: Introduction to Hypothesis Testing
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Sample Questions
Q1) A recent report in which a major pharmaceutical company released the results of testing that had been done on the cholesterol reduction that people could expect if they use the company's new drug indicated that the Type II error probability for a given "true" mean was 0.1250 based on the sample size of n = 64 subjects.Given this,what was the power of the test under these same conditions? The alpha level used in the test was 0.05.
A)0.95
B)0.875
C)Essentially zero
D)Power would be undefined in this case since the hypothesis would be rejected.
Q2) When testing a two-tailed hypothesis using a significance level of 0.05,a sample size of n = 16,and with the population standard deviation unknown,which of the following is true?
A)The null hypothesis can be rejected if the sample mean gets too large or too small compared with the hypothesized mean.
B)The alpha probability must be split in half and a rejection region must be formed on both sides of the sampling distribution.
C)The test statistic will be a t-value.
D)All of the above are true.
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Chapter 10: Estimation and Hypothesis Testing for Two
Population Parameters
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Sample Questions
Q1) In comparing two populations using paired differences,after the difference is found for each pair,the method for testing whether the mean difference is equal to 0 becomes the same as was used for a one-group hypothesis test with unknown standard deviation.
A)True
B)False
Q2) A maker of toothpaste is interested in testing whether the proportion of adults (over age 18)who use its toothpaste and have no cavities within a six-month period is any different than the proportion of children (18 and under)who use the toothpaste and have no cavities within a six-month period.To test this,it has selected a sample of adults and a sample of children randomly from the population of those customers who use their toothpaste.The following results were observed.
Adults Children
Sample Size 100 200
Number with 0 cavities 83 165
Based on these sample data and using a significance level of 0.05,what conclusion should be reached? Use the p-value approach to conduct the test.
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Page 12
Chapter 11: Hypothesis Tests and Estimation for Population
Variances
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Sample Questions
Q1) A sample of n observations is taken from a normally distributed population to estimate the population variance.The degrees of freedom for the chi-square distribution are n-2.
A)True
B)False
Q2) A potato chip manufacturer has two packaging lines and wants to determine if the variances differ between the two lines.They take a sample of n= 15 bags from each line and find the following: s<sub>1</sub> = 0.09 ounces s<sub>2</sub> = 0.06 ounces
The value of the test statistic is F = 1.5
A)True
B)False
Q3) If we are interested in performing a one-tailed,upper-tail hypothesis test about a population variance where the level of significance is .05 and the sample size is n = 20,the critical chi-square value to be used is 30.1435.
A)True
B)False
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Page 13
Chapter 12: Analysis of Variance
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Sample Questions
Q1) Which of the following describes a treatment in a randomized complete block analysis of variance?
A)A treatment is a combination of one level of each factor.
B)A treatment is a level associated with each factor of the experiment.
C)A treatment is another term for the data that are collected in the experiment.
D)A treatment is considered to be the analysis that is performed on the sample data.
Q2) Three brands of running shoes are each tested by 10 different runners.The amount of wear on the sole of the shoes is then measured.The objective is to determine if there is any difference among the three brands of shoes based on how long the soles last.The degrees of freedom for testing whether there is any blocking effect D<sub>1</sub> = 9 and D<sub>2</sub> = 18.
A)True
B)False
Q3) The number of cells in a two-factor analysis of variance design is equal to the number of levels of factor A plus the number of levels of factor B.
A)True
B)False
Q4) What are the assumptions for a one-way analysis of variance design?
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Page 14
Chapter 13: Goodness-Of-Fit Tests and Contingency Analysis
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Sample Questions
Q1) In a chi-square contingency analysis,when expected cell frequencies drop below 5,the calculated chi-square value tends to be inflated and may inflate the true probability of ________ beyond the stated significance level.
A)committing a Type I error
B)committing a Type II error
C)Both A and B.
D)All of the above.
Q2) If a contingency analysis test is performed with a 4 x 6 design,and if alpha = .05,the critical value from the chi-square distribution is 24.9958.
A)True
B)False
Q3) In order to apply the chi-square contingency methodology for quantitative variables,we must first break the quantitative variable down in discrete categories.
A)True
B)False
Q4) Explain why,in performing a goodness-of-fit test,it is sometimes necessary to combine categories.
Q5) Explain the basic logic behind the chi-square goodness-of-fit test.
Page 15
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Chapter 14: Introduction to Linear Regression and Correlation Analysis
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Sample Questions
Q1) In a simple linear regression analysis,if the test statistic for testing the significance of the regression slope coefficient is 3.6,the F ratio from the analysis of variance table is known to be 12.96.
A)True
B)False
Q2) Which of the following statements is true?
A)The interval estimate for predicting a particular value of y given a specific x will be narrower than the interval estimate for the average value of y given a particular x. B)The higher the r-square value,the wider will be the prediction interval based on a simple linear regression model.
C)The prediction interval generated from a simple linear regression model will be narrowest when the value of x used to generate the predicted y value is close to the mean value of x.
D)The prediction interval generated from a simple linear regression model will be widest when the value of x used to generate the predicted y value is close to the mean value of x.
Q3) Explain why it is important to construct scatter plots prior to conducting regression analysis.
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Chapter 15: Multiple Regression Analysis and Model Building
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Sample Questions
Q1) In the model diagnosis step in regression modeling,we are interested in the sign and size of the regression slope coefficients.
A)True
B)False
Q2) If given a choice in collecting data on age for use as an independent variable in a regression model,a decision maker would generally prefer to record the actual age rather than an age category so as to avoid using dummy variables.
A)True
B)False
Q3) Which of the following statements is true?
A)Dummy variables are used to incorporate categorical variables into a regression model.
B)You should use one fewer dummy variables than are categories for the qualitative variable in question.
C)It is appropriate to compute a correlation coefficient for the relationship between a dependent variable and a dummy variable.
D)All of the above are true.
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Chapter 16: Analyzing and Forecasting Time-Series Data
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Sample Questions
Q1) If the forecast errors are autocorrelated,this is a good indication that the model has been specified correctly.
A)True
B)False
Q2) It is possible to conduct a statistical test for autocorrelation using the Durbin-Watson test and not be able to make a definitive conclusion about whether there is autocorrelation or not based on the data.
A)True
B)False
Q3) The reason for testing for the presence of autocorrelation in a regression-based trend forecasting model is that one assumption of the regression analysis is that the residuals are not correlated.
A)True B)False
Q4) Some stocks are referred to as cyclical stock because they tend to be in favor for several years and then out of favor for several years.This is a correct use of the term cyclical.
A)True
B)False
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Chapter 17: Introduction to Nonparametric Statistics
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Sample Questions
Q1) The following null and alternative hypotheses are appropriate when using a Wilcoxon signed rank test.
H<sub>o</sub>: Population Median equals 14.5.
H<sub>A</sub><sub>: </sub>Population Median is not equal to 14.5.
A)True
B)False
Q2) If we are interested in testing to determine whether the center of three or more populations is equal when the data in the samples are ordinal,what is the appropriate test to conduct?
A)A t-test
B)An ANOVA
C)A Kruskal-Wallis
D)A Wilcoxon Matched-Pairs Sign Rank test
Q3) In a large sample test about a single population median,it is appropriate to employ the standard normal distribution so long as the population is also normally distributed.
A)True
B)False
Q4) Under what conditions should a decision maker use a nonparametric statistical procedure?
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Chapter 18: Introduction to Quality and Statistical Process Control
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Sample Questions
Q1) Among Deming's 14 points are:
A)remove barriers that rob employees of their pride of workmanship.
B)report progress.
C)keep score.
D)set goals for improvement.
Q2) A key part of the problem-solving process discussed in this chapter is the need to form a team.
A)True
B)False
Q3) Which of the following would Deming most likely have NOT agreed with?
A)Development of sophisticated inspection systems to assure quality
B)Provide job-specific training
C)Create an atmosphere where employees are not afraid to admit that they have made a mistake.
D)Eliminate quotas
Q4) Total quality management and the Pareto Principle are actually two terms that mean the same thing.
A)True
B)False
20
Q5) Explain the relationship between control limits and specification limits.
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Chapter 19: Introduction to Decision Analysis
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Sample Questions
Q1) A payoff table shows the payoff for each combination of alternative and state of nature.
A)True
B)False
Q2) When is decision analysis most useful?
A)For decisions that are not complex
B)For decisions that are complex
C)For decision that affect only one functional area of an organization
D)For decisions that are made in an environment of certainty
Q3) When using the expected value criterion,the expected value for a given alternative is:
A)the amount the decision maker will receive if that alternative is chosen.
B)the amount the decision maker is most likely to receive if that alternative is chosen.
C)the average amount the decision maker would receive in the long run if the decision is repeated many times.
D)the amount by which the decision maker will regret choosing that alternative.
Q4) The goal of decision analysis is to focus on obtaining good outcomes.
A)True
B)False
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