Statistical Methods for Economics and Business
Chapter Exam Questions
Course Introduction
This course introduces students to the fundamental statistical techniques used in economics and business analysis. Emphasizing both descriptive and inferential statistics, the course covers topics such as data collection, probability distributions, hypothesis testing, regression analysis, and forecasting. Practical applications are discussed throughout, enabling students to analyze real-world data, interpret statistical results, and make informed decisions in an economic and business context. The use of statistical software is integrated to enhance quantitative analytical skills vital for success in these fields.
Recommended Textbook
Business Statistics in Practice 7th Edition by Bruce Bowerman
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Chapter 11: Statistical Inferences for Population Variances
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Sample Questions
Q1) A baker must monitor the temperature at which cookies are baked.Too much variation will cause inconsistency in the texture of the cookies.Past records show that the variance of the temperatures has been 1.44°.A random sample of 30 batches of cookies is selected,and the sample variance of the temperature is 4.41°.What is the test statistic for testing the null hypothesis that the population variance has increased above 1.44°?
Q2) A manufacturer of an automobile part has a process that is designed to produce the part with a target of 2.5 inches in length.In the past,the standard deviation of the length has been 0.035 inches.In an effort to reduce the variation in the process,the manufacturer has redesigned the process.A sample of 25 parts produced under the new process shows a sample standard deviation of 0.025 inches.Test the claim that the new process standard deviation has improved from the current process at = .05.
Q3) A baker must monitor the temperature at which cookies are baked.Too much variation will cause inconsistency in the texture of the cookies.Past records show that the variance of the temperatures has been 1.44°.A random sample of 30 batches of cookies is selected,and the sample variance of the temperature is 4.41°.What is the 95 percent confidence interval for <sup>2</sup> at = .05?
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Chapter 12: Experimental Design and Analysis of Variance
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Sample Questions
Q1) Consider the following partial analysis of variance table from a randomized block design with 6 blocks and 4 treatments.
Q2) A company that fills gallon containers of water has four machines.The quality control manager needs to determine whether the average fill for these machines is the same.Looking at 19 one-gallon containers,we have the following data of fill measures (x)in quarts. F.
F = 10.10 \[\begin{array} { l c c c c }
\text { Source } & \text { SS } & \text { DF } & \text { MS } & \text { F } \\
\text { Treatments } & .007077 & 3 & 0.002359 & 10.10 \\
\text { Errors } & .003502 & 15 & .0002335 & \\
\text { Total } & 0.010579 & 18 & & \end{array}\]
Q3) The ANOVA procedure for a two-factor factorial experiment partitions the total sum of squares into three components,SS first factor,SS second factor,and SSE.
A)True
B)False
Q4) In a one-way analysis of variance with three treatments,each with five measurements,in which a completely randomized design is used,what is the degrees of freedom for error?
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Chapter 13: Chi-Square Tests
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Sample Questions
Q1) In a contingency table,when all the expected frequencies equal the observed frequencies,the calculated <sup>2</sup> statistic equals zero.
A)True
B)False
Q2) AAA Co.operates distribution centers in the Midwest.Three of their centers were recently audited to determine if they are in compliance with company standard billing procedures.According to the auditing firm,a billing had an equal probability of being from each of the three centers.A random sample of the audited billings had the following distribution:
Center 1: 385 billings
Center 2: 305 billings
Center 3: 210 billings
State the null hypothesis that states the expectations of the auditors.
Q3) The AAA Co.is interested in their employees' level of satisfaction with the benefit package that they offer compared to their major competitors.A consultant hired to conduct the satisfaction survey told AAA Co.that the distribution of level of satisfaction at other companies is displayed below:
Q4) Consider the 3 × 2 contingency table below.
Q5) Consider the 3 × 2 contingency table below.
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Chapter 14: Simple Linear Regression Analysis
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Sample Questions
Q1) The ___________ the r<sup>2</sup>,and the __________ the s (standard error),the stronger the relationship between the dependent variable and the independent variable.
A)Higher,lower
B)Lower,higher
C)Lower,lower
D)Higher,higher
Q2) The Durbin-Watson test statistic ranges from:
A)-4 to 4
B)0 to 4
C)0 to 3
D)-1 to 1
E)0 to 1
Q3) A data set with 7 observations yielded the following.Use the simple linear regression model.
Q4) An experiment was performed on a certain metal to determine if the strength is a function of heating time.Results based on 10 metal sheets are given below.
Q5) An experiment was performed on a certain metal to determine if the strength is a function of heating time.The simple linear regression equation is
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Chapter 15: Multiple Regression and Model Building
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Sample Questions
Q1) A member of the state legislature has expressed concern about the differences in the mathematics test scores of high school freshmen across the state.She asks her research assistant to conduct a study to investigate what factors could account for the differences.The research assistant looks at a random sample of school districts across the state and used the factors of percentage of mathematics teachers in each district with a degree in mathematics,the average age of mathematics teachers,and the average salary of mathematics teachers.
Q2) Below is a partial multiple regression ANOVA table.
Q3) The error term in the regression model describes the effects of all factors other than the independent variables on y (response variable).
A)True
B)False
Q4) The mean square error of a multiple regression model with k independent variables and n observations is __________.
A)SSE/n
B)SSE/[n + (k + 1)]
C)SSE/[n - (k + 1)]
D)SSE/(k + 1)
Q5) Below is a partial multiple regression ANOVA table.
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Chapter 16: Time Series Forecasting and Index Numbers
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Sample Questions
Q1) The Consumer Price Index and the Producer Price Index are both calculated using the ___________ index formula.
A)Paasche
B)Weighted aggregate
C)Laspeyres
D)Cyclical (seasonal)
Q2) The following data on prices and quantities for the years 1995 and 2000 are given for three products.
Q3) When there is _______________ seasonal variation,the magnitude of the seasonal swing does not depend on the level of the time series.
A)cyclical
B)constant
C)irregular
D)increasing
Q4) Consider the following set of quarterly sales data given in thousands of dollars.
Q5) Use the following price information for three grains.
Q6) Given the following data,compute the mean absolute deviation (MAD).
Q7) Given the following data,compute the total error (sum of the error terms).
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Chapter 17: Process Improvement Using Control Charts
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Sample Questions
Q1) A(n)_______ chart monitors the number of nonconformities units in a subgroup.
A) \(\overline { \mathcal { X } }\)
B)R
C)C
D)p
Q2) If \(\overline { \overline { X } }\)
= 5)2, \(\bar { R }\) = )3,and n = 4,and if the specifications are [4.6,5.8],is the process capable?
A)Yes
B)No
\[\mathrm { NTL } = 5.2 \pm 3 \left( \frac { 0.3 } { 2.059 } \right) = 4.763 \text { to } 5.637\]
Q3) If a process is only influenced by common causes of variation,we can state that the process is in statistical control.
A)True B)False
Q4) Periodic sampling is observing the output of a process at random intervals. A)True B)False
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Chapter 18: Nonparametric Methods
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Sample Questions
Q1) The sign test is a nonparametric test for a population mean that is valid for any sample size and population shape.
A)True
B)False
Q2) A ___________ test is a statistical test that can be used without assuming that the sampled population(s)has/have a particular type of probability distribution.
A)Wilcoxon rank sum
B)Nonparametric
C)Linear regression
D)Correlation
Q3) The Kruskal-Wallis test is the nonparametric counterpart of the:
A)Large sample test about a single population mean.
B)Two independent samples t test.
C)One way ANOVA F test.
D)Paired difference t test.
E)F test for equality of population variances.
Q4) A sign test is a test of hypothesis about the population mean.
A)True
B)False
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Chapter 19: Decision Theory
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Sample Questions
Q1) A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman not being pregnant when the test results indicate pregnancy.It is estimated that the probability of pregnancy among potential users of the kit is 10 percent.According to the company laboratory test results,1 out of 100 nonpregnant women tested pregnant (false positive).On the other hand,1 out of 200 pregnant women tested nonpregnant (false negative).A woman has just used the pregnancy test kit manufactured by the company and the results showed pregnancy.What is the probability that she is not pregnant?
Q2) Maximin is a criterion used when making decisions under certainty. A)True B)False
Q3) Alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (S<sub>I</sub>)represent the levels of demand for the company products.S<sub>1</sub>,S<sub>2</sub>,and S<sub>3</sub> characterize high,medium,and low demand,respectively.The payoff values are in thousands of dollars.
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