Statistics for Business and Economics Exam Preparation Guide
Course Introduction
Statistics for Business and Economics introduces students to foundational statistical concepts and methods essential for informed decision-making in business and economic environments. The course covers data collection, descriptive statistics, probability theory, sampling distributions, hypothesis testing, regression analysis, and correlation, with applications tailored to real-world business and economic problems. Through practical examples and case studies, students learn how to analyze data, interpret statistical results, and communicate findings effectively, equipping them with quantitative skills crucial for strategic planning, forecasting, and problem-solving in professional settings.
Recommended Textbook
Statistics for Business and Economics 8th Edition by
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Page 2
Betty Newbold
Chapter 1: Describing Data: Graphical
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247 Verified Questions
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Sample Questions
Q1) Find the percentage for "chip" defect items. Answer: Percent of chip = (28/180)<sub> </sub>100% = 15.56%
Q2) Histograms may not be "mathematically correct" since they often cannot be scaled on the vertical axis.
A)True
B)False
Answer: True
Q3) Construct a relative frequency and percent distributions of the data. Answer: 11ea5b8a_b6b0_1936_b1f3_a7aa1a9c3df6_TB2968_00
Q4) Descriptive statistics transform data into information. A)True
B)False Answer: True
Q5) Quantitative variables usually represent membership in groups or categories. A)True B)False
Answer: False
Q6) Construct cumulative frequency and cumulative percent distributions of the data. Answer: 11ea5b8a_b6af_55e3_b1f3_1542cdda65be_TB2968_00
Page 3
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Chapter 2: Describing Data: Numerical
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Sample Questions
Q1) A valuable use of median and mode would be in a business where inventory contains items of different sizes.
A)True
B)False
Answer: True
Q2) What conclusions can you draw about the relationship between the size of the sales force and gross sales?
Answer: In general,there is a positive relationship between the two variables;that is,as the number of people on the sales force increases,so do sales.
Q3) Measures of central tendency provide numerical information about a "typical" observation in the data.
A)True
B)False
Answer: True
Q4) Positive skewness results if a distribution is skewed to the left.
A)True
B)False
Answer: False
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Chapter 3: Probability
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Sample Questions
Q1) The set of all possible outcomes from a random experiment is called the sample: A)population. B)space. C)probability.
D)event.
Answer: B
Q2) What is P(A<sub>2</sub> |B<sub>2</sub>),rounded to two decimals?
A)0.33
B)0.35
C)0.65
D)0.67
Answer: C
Q3) What is the probability that a professor who does not receive advertising material has not adopted the book?
Answer: P(A<sub>1</sub>)= 0.75,P(A<sub>2</sub>)= 1 - 0.75 = 0.25,P(B<sub>1</sub> A<sub>1</sub>)= 0.28,P(B<sub>1</sub> A<sub>2</sub>)= 0.08 P(B<sub>1</sub> A<sub>2</sub>)+ P(B<sub>2</sub> A<sub>2</sub>)= 1,then P(B<sub>2</sub> A<sub>2</sub>)= 1 - 0.08 = 0.92
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Chapter 4: Discrete Random Variables and Probability
Distributions
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Sample Questions
Q1) When sampling without replacement from a finite population such that the probability of a success is no longer constant from trial to trial,the data must follow a: A)binomial distribution.
B)Poisson distribution.
C)hypergeometric distribution.
D)continuous probability distribution.
Q2) What is the probability that between one and three (inclusive)of the trainees will still be employed at the end of nine months?
A)0.3543
B)0.0984
C)0.0146
D)0.4673
Q3) If two random variables X and Y are statistically independent,then Cov(X,Y)= 0.
A)True
B)False
Q4) An auditor reviewing the invoices of a small company finds that there are errors in 1.5% of them.If the auditor looks at 500 invoices,what is the probability that he finds more than 3 invoices with errors? Use the Poisson approximation to the binomial distribution.
Page 6
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Chapter 5: Continuous Random Variables and Probability
Distributions
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Sample Questions
Q1) Sales,investment,consumption,costs,and revenues are economic and business measures which can be represented by:
A)discrete variable.
B)fixed variables.
C)continuous random variables.
D)coefficients.
Q2) The mean and median are the same for a random variable that is exponentially distributed.
A)True
B)False
Q3) The normal probability distribution provides a very close approximation to the binomial probability distribution if np(1 - p)> 5,where n is the number of trials and p is the probability of success in any trial.
A)True
B)False
Q4) What is the probability that x is at most 2?
Q5) Show that,if 4 minutes have already elapsed,the probability that a further 4 minutes will elapse before the next occurrence is e<sup>-8 </sup>.Explain your answer in words.
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Chapter 6: Sampling and Sampling Distributions
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Sample Questions
Q1) Find any pair of numbers,a and b,to complete the following sentence: The probability is 0.95 that the sample variance is between a% and b% of the population variance.
Q2) What is the probability that the sample mean selling price was between $119,000 and $121,000?
Q3) A sample of size n is selected at random from an infinite population.As n increases,which of the following statements is true?
A)The population standard deviation decreases.
B)The standard error of the sample mean decreases.
C)The population standard deviation increases.
D)The standard error of the sample mean increases.
Q4) Given the results for possible magnitudes of the finite population correction factor,for samples of n =15 observations from populations of N = 15,30,60,100,500,1,000,5,000,and 10,000 members,discuss the practical significance of using the finite population correction factor for samples of 20 observations from populations of different sizes.
Q5) The probability is 90% that the sample variance is less than what percent of the population variance?
Q6) Find the population mean and population standard deviation.
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Chapter 7: Estimation: Single Population
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Sample Questions
Q1) Develop a 90% confidence interval for the proportion of all households in the U.S.with more than one computer.
Q2) How large the sample is needed to estimate the population proportion if ME = 0.09,a = 0.05?
Q3) When computing the confidence interval for the population proportion,the Student's t-distribution is used rather than the normal distribution.
A)True
B)False
Q4) All other things being equal,the larger the sample size,the narrower the interval estimates that reflect the uncertainty about a parameter's true value.
A)True
B)False
Q5) Find a point estimate of the population mean and population standard deviation of the weight losses.
Q6) The margin of error can be reduced by decreasing the sample size.
A)True
B)False
Q7) Calculate the sample standard deviation.
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Chapter 8: Estimation: Additional Topics
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Sample Questions
Q1) Determine the number of degrees of freedom.
A)16
B)22
C)19
D)14
Q2) While constructing a confidence interval for the mean difference in paired data,as the sample size increases,the width of the interval also increases.
A)True
B)False
Q3) Find the width of the 99% confidence interval.
Q4) Find the 98% confidence interval for the difference in the means of the two populations.
A)1002 ± 12.58
B)38 ± 12.58
C)38 ± 19.86
D)1002 ± 19.86
Q5) Based on the 90% confidence interval for the difference in the means of the two populations,is there evidence that the population means are different?
Q6) Calculate the width of the interval for a 95% confidence interval.
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Chapter 9: Hypothesis Testing: Single Population
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Sample Questions
Q1) A gaming control board claims that the average household income of those people playing blackjack at casinos is at least $50,000.Assume that the distribution of household income of those people playing blackjack is normally distributed with a standard deviation of $7,559.Suppose that for a sample of 45 households,it is found that the average income was $48,326.Is the gaming control board incorrect in asserting that the average household income of blackjack players is at least $50,000? Use the 10 per cent significance level.
Q2) Test at the 5% level the null hypothesis H<sub>0</sub> : 42,000 against the alternative hypothesis H<sub>1</sub> : < 42,000
Q3) The probability of rejecting a true null hypothesis is denoted by . A)True
B)False
Q4) Test the hypothesis at the 5% level.
Q5) What kind of alternative hypothesis type would fit such a survey?
Q6) Which of the following statements is most accurate?
A)Fail to reject the null hypothesis at 0.10
B)Reject the null hypothesis at = 0.05
C)Reject the null hypothesis at = 0.10,but not 0.05
D)Reject the null hypothesis at = 0.01
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Chapter 10: Hypothesis Testing: Additional Topics
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Sample Questions
Q1) The value of the test statistic for determining if there is a difference in the population variances for preservatives A and B is equal to:
A)0.784
B)1.625
C)1.275
D)1.129
Q2) In testing for differences between the means of two independent populations,the null hypothesis is:
A)H<sub>0</sub> : <sub>1</sub> - <sub>2</sub> 1.
B)H<sub>0</sub> : <sub>1</sub> - <sub>2</sub> = 0.
C)H<sub>0</sub> : <sub>1</sub> - <sub>2</sub> > 0.
D)H<sub>0</sub> : <sub>1</sub> - <sub>2</sub> < 1.
Q3) 25 consumers were provided with a package containing two different brands of instant coffee.A week later,they were asked to rate the taste of each coffee on a scale of 1 (poor taste)to 10 (excellent taste).Is this an example of independent samples or dependent samples? Explain.
Q4) Use Excel or Minitab to conduct a two-sample t-test for data in the table above.
Q5) Use Excel or Minitab to conduct a two-sample t-test.
Q6) What is the p-value?
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Chapter 11: Simple Regression
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Sample Questions
Q1) Use a simple regression model to test the hypothesis: H<sub>0</sub> : <sub>1</sub> = 0 vs.H<sub>1</sub> : <sub>1</sub> 0 ,with = 0.05
Q2) Construct 95% confidence interval for the slope of the population regression line.
Q3) Determine the value of the Student's t statistic.
A)1.34
B)0.80
C)2.67
D)3.47
Q4) The purpose of correlation analysis is to find how strong the relationship is between two variables.
A)True
B)False
Q5) What is the standard deviation of the number of hours households spend connected to the internet each month?
A)12.817
B)14.667
C)15.679
D)11.990
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Chapter 12: Multiple Regression
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Sample Questions
Q1) How would the officer interpret the coefficient on x<sub>2</sub>?
A)As the interest rate increases,the total loan amount decreases at a decreasing rate.
B)As the total loan amount increases,the interest rate decreases at an increasing rate.
C)As the interest rate increases,the total loan amount decreases at an increasing rate.
D)As the total loan amount increases,the interest rate decreases at a decreasing rate.
Q2) Interpret the estimated regression coefficient b<sub>1</sub>.
Q3) We would always use a quadratic term in a regression when we think there is a nonlinear relationship between the dependent and independent variable.
A)True
B)False
Q4) What factors would tend to increase the difference between the coefficient of determination R<sup>2</sup> and the adjusted R<sup>2</sup> for a multiple regression?
Q5) Test the hypothesis H<sub>0</sub><sub> </sub>: <sub>5</sub><sub> </sub>= 0 and interpret your result.
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Chapter 13: Additional Topics in Regression Analysis
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Sample Questions
Q1) Which of the following is considered one of the most common concerns with time-series data?
A)heteroscedasticity
B)autocorrelation
C)multicollinearity
D)specification bias
Q2) If X<sub>1</sub> were to increase by 1-unit in time t,by how much would we expect Y to change over all current and future time periods as a result of this increase?
A)45.13
B)28.85
C)17.99
D)34.59
Q3) In regression models,multicollinearity arises when the:
A)dependent variables are highly correlated with one another.
B)independent variables are highly correlated with one another.
C)independent variables are highly correlated with the dependent variable.
D)error terms do not have the same variance.
Q4) Interpret the coefficient b<sub>1</sub>.
Q5) Test the model for heteroscedasticity.
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Chapter 14: Analysis of Categorical Data
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Sample Questions
Q1) A marketing researcher asked a sample of 120 consumers regarding their preferred packaging for a new product.They had four different package styles to choose from.Of the 120 people,39 preferred Package A,27 preferred Package B,24 preferred Package C,and the rest preferred Package D.Is there evidence to suggest that the preferences are evenly spread among the four packages?
Q2) Why would anyone want to do a Goodness-of-Fit-test?
Q3) Which nonparametric method is appropriate for analyzing these results?
Q4) Whenever the expected frequency of a cell is less than 5,one remedy for this condition is to decrease the significance level.
A)True
B)False
Q5) A sample of 75 corporations buying back franchises was examined.Of these cases,returns on common stock around the buy-back announcement date were positive 48 times,negative 22 times,and zero 5 times.Test the null hypothesis that positive and negative returns are equally likely against the alternative that positive returns are more likely.
Q6) Calculate the spearman rank correlation coefficient.
Q7) Test whether the students did better on the second exam than the first.
Q8) What is the p-value of this test?
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Chapter 15: Analysis of Variance
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Sample Questions
Q1) Complete the ANOVA table.
Q2) In an ANOVA analysis with K number of groups,H number of blocks,and m number of observations per cell,the degree of freedom for SSB is given by (H - 1).
A)True
B)False
Q3) What is the value of "G"?
A)1.350
B)1.192
C)1.421
D)1.820
Q4) In a one-way ANOVA,if the variability between groups is large compared to the variability within groups,we suspect the null hypothesis of equality of population means to be false.
A)True
B)False
Q5) At the .05 level of significance,can we reject the null hypothesis in the previous question?
Q6) What are the degrees of freedom for between groups?
Q7) State the null and alternative hypotheses for this situation
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Chapter 16: Time-Series Analysis and Forecasting
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Sample Questions
Q1) Show the table with the errors for each forecast and determine the sum of squared errors.
Q2) What is the value of mean absolute deviation?
A)17.28
B)30.55
C)1534.28
D)3451.28
Q3) The number of four-period centered moving averages of a time series with 20 time periods is:
A)28
B)24
C)20
D)16
Q4) Compute the approximate forecast for week 12.
A)696 units
B)767 units
C)672 units
D)453 units
Q5) If the forecaster uses an exponential smoothing constant of 0.8,show the steps involved in calculating the forecast for the year 1935.
Page 18
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Chapter 17: Additional Topics in Sampling
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Sample Questions
Q1) A city is divided into 50 geographic subdivisions.An estimate of the proportion of households in the city interested in a new lawn-care service was required.A random sample of three subdivisions contained 610,520,and 730 households,respectively.The households expressing interest in the service were 125,130,and 175,respectively.Find a 90% confidence interval for the proportion of all households in the city interested in the lawn-care service.
Q2) Find a 95% confidence interval for the mean rating given by all the undergraduate students on the campus.
Q3) Suppose that for a sample of 65 observations from a population of 500,the sample mean is 25.6 and the sample standard deviation is 2.8.Create a 90% confidence interval for the population mean.
A)25.6 ± 0.318
B)25.6 ± 0.415
C)25.6 ± 0.467
D)25.6 ± 0.533
Q4) Estimate the total dollar value of these invoices.
Q5) Find a 90% confidence interval for the total expenditures.
Q6) Find a 90% confidence interval for the proportion of students intending to take the final examination.
Page 19
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