Statistics for Business and Economics Study Guide Questions
Course Introduction
Statistics for Business and Economics introduces students to the fundamental concepts and methods of statistical analysis as they apply to decision-making in business and economic contexts. The course covers topics such as descriptive statistics, probability theory, sampling distributions, hypothesis testing, regression analysis, and forecasting. Emphasis is placed on interpreting data, making informed business decisions, and utilizing statistical tools in real-world scenarios. Through practical examples, case studies, and the use of statistical software, students develop the analytical skills necessary to analyze data, assess risk, and provide solutions to business and economic problems.
Recommended Textbook
Modern Business Statistics with Microsoft Excel 5th Edition by David R. Anderson
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Chapter 1: Data and Statistics
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Sample Questions
Q1) For ease of data entry into a university database, 1 denotes that the student is an undergraduate and 2 indicates that the student is a graduate student. In this case data are
A)categorical
B)quantitative
C)either categorical or quantitative
D)neither categorical nor quantitative
Answer: A
Q2) __________ is an example of an existing source of data.
A)An experimental study
B)An uncontrolled experimental study
C)U. S. Census Bureau
D)An observational study
Answer: C
Q3) Temperature is an example of
A)a categorical variable
B)a quantitative variable
C)either a quantitative or categorical variable
D)neither a quantitative nor categorical variable
Answer: B
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Chapter 2: Descriptive Statistics: Tabular and Graphical Displays
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Sample Questions
Q1) The proper way to construct a stem-and-leaf display for the data set {62, 67, 68, 73, 73, 79, 91, 94, 95, 97} is to
A)exclude a stem labeled '8'
B)include a stem labeled '8' and enter no leaves on the stem
C)include a stem labeled '(8)' and enter no leaves on the stem
D)include a stem labeled '8' and enter one leaf value of '0' on the stem
Answer: B
Q2) Excel's __________ can be used to construct a frequency distribution for quantitative data.
A)COUNTIF function
B)SUM function
C)PivotTable Report
D)AVERAGE function
Answer: C
Q3) The minimum number of variables represented in a bar chart is
Answer: A
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Chapter 3: Descriptive Statistics: Numerical Measures
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Sample Questions
Q1) The correlation coefficient ranges between
A)0 and 1
B)-1 and +1
C)minus infinity and plus infinity
D)1 and 100
Answer: B
Q2) The population variance can never be
A)zero
B)larger than the standard deviation
C)negative
D)all of these are correct
Answer: C
Q3) In computing descriptive statistics from grouped data, A)data values are treated as if they occur at the midpoint of a class
B)the grouped data result is more accurate than the ungrouped result
C)the grouped data computations are used only when a population is being analyzed
D)All of these answers are correct.
Answer: A
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5
Chapter 4: Introduction to Probability
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Sample Questions
Q1) Two events are mutually exclusive if
A)the probability of their intersection is 1
B)they have no sample points in common
C)the probability of their intersection is 0.5
D)the probability of their intersection is 1 and they have no sample points in common
Q2) When the assumption of equally likely outcomes is used to assign probability values, the method used to assign probabilities is referred to as the
A)relative frequency method
B)subjective method
C)probability method
D)classical method
Q3) An experiment consists of tossing 4 coins successively. The number of sample points in this experiment is
A)16
B)8
C)4
D)2
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6
Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) Assume that you have a binomial experiment with p = 0.4 and a sample size of 50. The variance of this distribution is
A)20
B)12
C)3.46
D)Not enough information is given to answer this question.
Q2) An example of a bivariate experiment is
A)tossing a coin once B)rolling a pair of dice
C)winning or losing a football game
D)passing or failing a course
Q3) Refer to Exhibit 5-1. The probability of having a demand for at least two microcomputers is
A)0.7
B)0.3
C)0.4
D)1.0
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Chapter 6: Continuous Probability Distributions
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Sample Questions
Q1) Z is a standard normal random variable. What is the value of z if the area between -z and z is 0.754?
A)0.377
B)0.123
C)2.16
D)1.16
Q2) In a standard normal distribution, the range of values of z is from A)minus infinity to infinity
B)-1 to 1
C)0 to 1
D)-3.09 to 3.09
Q3) Excel's NORM.DIST function can be used to compute
A)cumulative probabilities for a standard normal z value
B)the standard normal z value given a cumulative probability
C)cumulative probabilities for a normally distributed x value
D)the normally distributed x value given a cumulative probability
Q4) The monthly earnings of computer programmers are normally distributed with a mean of $4,000. If only 1.7 percent of programmers have monthly incomes of less than $2,834, what is the value of the standard deviation of the monthly earnings of the computer programmers?
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) The population we want to make inferences about is the A)sampled population
B)frame
C)target population
D)finite population
Q2) The probability distribution of all possible values of the sample mean is called the A)central probability distribution
B)sampling distribution of the sample mean
C)random variation
D)standard error
Q3) As a general rule, the sampling distribution of the sample proportions can be approximated by a normal probability distribution whenever
A)np \(\ge\) 5
B)n(1 - p) \(\ge\) 5
C)n \(\ge\) 30
D)Both np \(\ge\) 5 and n(1 - p) \(\ge\) 5 are true.
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Chapter 8: Interval Estimation
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Sample Questions
Q1) A reporter for a student newspaper is writing an article on the cost of off-campus housing. A sample was taken of 10 one-bedroom units within a half-mile of campus and the rents paid. The sample mean is $550 and the sample standard deviation is $60.05. Provide a 95% confidence interval estimate of the mean rent per month for the population of one-bedroom units within a half-mile of campus. We will assume this population to be normally distributed.
Q2) Refer to Exhibit 8-1. The standard error of the mean is A)7.5
B)0.014
C)0.160
D)0.133
Q3) If we want to provide a 95% confidence interval for the mean of a population, the confidence coefficient is A)0.485
B)1.96
C)0.95
D)1.645
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Chapter 9: Hypothesis Tests
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Sample Questions
Q1) In the past the average age of employees of a large corporation has been 40 years. Recently, the company has been hiring older individuals. In order to determine whether there has been an increase in the average age of all the employees, a sample of 25 employees was selected. The average age in the sample was 45 years with a standard deviation of 5 years. Assume the distribution of the population is normal. Let \(\alpha\) = .05.
a.State the null and the alternative hypotheses.
b.Test to determine whether or not the mean age of all employees is significantly more than 40 years.
Q2) Refer to Exhibit 9-2. The p-value is
A)0.025
B)0.0456
C)0.05
D)0.0228
Q3) The smaller the p-value,
A)the greater the evidence against H<sub>0</sub>
B)the greater the chance of committing a Type II error
C)the greater the chance of committing a Type I error
D)the less likely you are to reject H<sub>0</sub>
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Chapter 10: Inference About Means and Proportions With
Two Populations
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Sample Questions
Q1) Refer to Exhibit 10-3. The test statistic for the difference between the two population means is
A)-.47
B)-.65
C)-1.5
D)-3
Q2) In a sample of 100 Republicans, 60 favored the President's anti-drug program. While in a sample of 150 Democrats, 84 favored his program. At 95% confidence, test to see if there is a significant difference in the proportions of the Democrats and the Republicans who favored the President's anti-drug program.
Q3) Refer to Exhibit 10-6. A 95% confidence interval estimate for the difference between the average purchases of the customers using the two different credit cards is
A)49 to 64
B)11.68 to 18.32
C)125 to 140
D)8 to 10
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Chapter 11: Inferences About Population Variances
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Sample Questions
Q1) The chi-square value for a one-tailed test (lower tail) when the level of significance is 0.1 and the sample size is 15 is
A)21.0642
B)23.6848
C)7.78453
D)6.57063
Q2) We are interested in testing to see if the variance of a population is less than 7. The correct null hypothesis is
A)< 7
B)<sup>2</sup> \(\ge\) 49
C)s < 49
D)s > 49
Q3) A random sample of 31 charge sales showed a sample standard deviation of $50. A 90% confidence interval estimate of the population standard deviation is
A)1,715.10 to 4,055.68
B)1,596.45 to 4,466.73
C)39.96 to 66.83
D)41.39 to 63.68
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Chapter 12: Tests of Goodness of Fit, Independence and Multiple Proportions
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Sample Questions
Q1) Excel's ____ function is used to perform a goodness of fit test.
A)z-Test: Two Sample for Means
B)t-Test: Two Sample Assuming Equal Variances
C)CHISQ.DIST.RT
D)NORM.S.DIST
Q2) In order not to violate the requirements necessary to use the chi-square distribution, each expected frequency in a goodness of fit test must be
A)at least 5
B)at least 10
C)no more than 5
D)less than 2
Q3) The test for goodness of fit, test of independence, and test of multiple proportions are designed for use with
A)categorical data
B)bivariate data
C)quantitative data
D)ordinal data
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Chapter 13: Experimental Design and Analysis of Variance
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Sample Questions
Q1) Refer to Exhibit 13-3. The null hypothesis
A)should be rejected
B)should not be rejected
C)should be revised
D)None of these alternatives is correct.
Q2) Refer to Exhibit 13-4. If at a 5% level of significance we want to determine whether or not the means of the five populations are equal, the critical value of F is
A)2.53
B)19.48
C)4.98
D)39.48
Q3) Refer to Exhibit 13-4. The mean square within treatments (MSE) is
A)50
B)10
C)200
D)600
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Chapter 14: Simple Linear Regression
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Sample Questions
Q1) Refer to Exhibit 14-2. The least squares estimate of b<sub>1</sub> equals
A)-0.7647
B)-0.13
C)21.4
D)16.412
Q2) The proportion of the variation in the dependent variable y that is explained by the estimated regression equation is measured by the A)correlation coefficient
B)standard error of the estimate
C)coefficient of determination
D)confidence interval estimate
Q3) Refer to Exhibit 14-2. The coefficient of determination equals A)-0.99705
B)-0.9941
C)0.9941
D)0.99705
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Chapter 15: Multiple Regression
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Sample Questions
Q1) Refer to Exhibit 15-2. If we want to test for the significance of the regression model, the critical value of F at 95% confidence is
A)3.68
B)3.29
C)3.24
D)4.54
Q2) A measure of goodness of fit for the estimated regression equation is the A)multiple coefficient of determination
B)mean square due to error
C)mean square due to regression
D)sample size
Q3) Refer to Exhibit 15-8. The estimated income of a 30-year-old male is
A)$51,000
B)$5,100
C)$510
D)$51
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Chapter 16: Regression Analysis: Model Building
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Sample Questions
Q1) Serial correlation is
A)the correlation between serial numbers of products
B)the same as autocorrelation
C)the same as leverage
D)None of these alternatives is correct.
Q2) Which of the following statements about the backward elimination procedure is false?
A)It is a one-variable-at-a-time procedure.
B)It begins with the regression model found using the forward selection procedure.
C)It does not permit an independent variable to be reentered once it has been removed.
D)It does not guarantee that the best regression model will be found.
Q3) Refer to Exhibit 16-1. If we are interested in testing for the significance of the relationship among the variables (i.e., significance of the model) the critical value of F at \(\alpha\) = 0.05 is
A)2.76
B)2.78
C)3.10
D)3.07
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Chapter 17: Time Series Analysis and Forecasting
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Sample Questions
Q1) All of the following are true about qualitative forecasting methods except A)they generally involve the use of expert judgment to develop forecasts
B)they assume the pattern of the past will continue into the future
C)they are appropriate when past data on the variable being forecast are not applicable
D)they are appropriate when past data on the variable being forecast are not available
Q2) Gradual shifting or movement of a time series to relatively higher or lower values over a longer period of time is called
A)periodicity.
B)cycle.
C)regression.
D)trend.
Q3) The model that assumes that the actual time series value is the product of its components is the
A)linear trend regression model
B)multiplicative decomposition model
C)additive time series model
D)weighted moving average model
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19
Chapter 18: Nonparametric Methods
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Sample Questions
Q1) The Spearman rank-correlation coefficient for 20 pairs of data when \(\Sigma\)d<sub>i</sub><sup>2</sup> = 50 is.
A)0.0063
B)0.0376
C)0.9624
D)0.9937
Q2) A nonparametric method for determining the differences between two populations based on two matched samples where only preference data is required is the A)Mann-Whitney-Wilcoxon test
B)Wilcoxon signed-rank test
C)sign test
D)Kruskal-Wallis Test
Q3) The level of measurement that is a label for the purpose of identifying an item is A)ordinal measurement
B)ratio measurement
C)nominal measurement
D)internal measurement
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Chapter 19: Statistical Methods for Quality Control
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Sample Questions
Q1) An acceptance sampling plan with n = 20 and c = 1 has been designed with a producer's risk of .12.
a. Was the value of p<sub>0</sub> equal to .02, .03, .04, or .05?
b. What is the consumer's risk associated with this plan if p<sub>1</sub> is .08?
c. Assume the consumer's risk found in (b) is unacceptably high. Which modification of the sampling plan will result in the greater reduction of the consumer's risk, increasing n to 30 or decreasing c to 0?
Q2) A production process is considered in control if 4% of the items produced are defective. Samples of size 100 are used for the inspection process.
a.Determine the standard error of the proportion.
b.Determine the upper and the lower control limits for the p chart.
Q3) The maximum number of defective items that can be found in the sample and still lead to acceptance of the lot is
A)the upper control limit
B)the lower control limit
C)the acceptance criterion
D)None of the other answers is correct.
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Chapter 20: Decision Analysis
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Sample Questions
Q1) Refer to Exhibit 20-1. The expected value of perfect information is
A)6.2
B)2.0
C)13.6
D)4.8
Q2) The probabilities of states of nature after revising the prior probabilities based on given indicator information are
A)the expected probabilities
B)the posterior probabilities
C)the prior probabilities
D)None of the answers are correct.
Q3) Application of Bayes' theorem enables us to compute
A)the prior probability of each state of nature
B)the posterior probability of each sample outcome
C)the conditional probability of the sample outcomes given each state of nature
D)the conditional probability of the states of nature given each sample outcome
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Chapter 21: Sample Survey
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Sample Questions
Q1) Refer to Exhibit 21-2. An approximate 95% confidence interval for the population mean is
A)482.2 to 517.8
B)440.0 to 560.0
C)500.0 to 560.0
D)440.0 to 500.0
Q2) A simple random sample of size 36 is selected from a population of size 750. The sample mean is 318, and the sample standard deviation is found to be 30.
a.Estimate the standard error of the mean.
b.Develop an approximate 95% confidence interval for the population mean.
Q3) A target population is
A)the population from which the sample is actually selected
B)the population for which inferences are to be made
C)always the same as the sampled population
D)the same as the sample
Q4) A community has 2,000 registered voters. A pilot study revealed that 70% of the individuals are planning to vote for the incumbent mayor. We are interested in selecting a sample. So that the sampling error will not exceed 4%, what size sample should be taken?
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