Statistics for Economists Test Questions
Course Introduction
Statistics for Economists introduces students to the fundamental statistical concepts and techniques essential for economic data analysis. The course covers descriptive statistics, probability distributions, sampling techniques, estimation, hypothesis testing, and simple regression analysis, all within the context of economic applications. Emphasis is placed on interpreting data, drawing meaningful economic inferences, and applying statistical reasoning to real-world economic problems using statistical software. By the end of the course, students will have developed the skills necessary to collect, analyze, and interpret economic data effectively, supporting informed decision-making in both academic and professional economic settings.
Recommended Textbook
Statistics for Business and Economics 11th Edition by David R. Anderson
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Chapter 1: Data and Statistics
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Sample Questions
Q1) Refer to Exhibit 1-4.How many elements are in the above data set?
A)5
B)6
C)3
D)45
Answer: D
Q2) Data
A)are always be numeric
B)are always nonnumeric
C)are the raw material of statistics
D)None of these alternatives is correct.
Answer: C
Q3) In Excel,a worksheet that displays the data for the problem and shows the results of the analysis is
A)a formula worksheet
B)a value worksheet
C)an absolute worksheet
D)a descriptive worksheet
Answer: B
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Chapter 2: Descriptive Statistics: Tabular and Graphical Presentations
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Sample Questions
Q1) The difference between the lower class limits of adjacent classes provides the A)number of classes
B)class limits
C)class midpoint
D)class width
Answer: D
Q2) The most common graphical presentation of quantitative data is a
A)histogram
B)bar chart
C)relative frequency
D)pie chart
Answer: A
Q3) Refer to Exhibit 2-1.If a cumulative frequency distribution is developed for the above data,the last class will have a cumulative frequency of A)100
B)1
C)30 - 39
D)400
Answer: D
Page 4
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Chapter 3: Descriptive Statistics: Numerical Measures
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Sample Questions
Q1) Since the population size is always larger than the sample size,then the sample statistic
A)can never be larger than the population parameter
B)can never be equal to the population parameter
C)can be smaller,larger,or equal to the population parameter
D)can never be smaller than the population parameter
Answer: C
Q2) Refer to Exhibit 3-1.The relative frequency of students working 9 hours or less
A)is .2
B)is .45
C)is 40
D)cannot be determined from the information given
Answer: A
Q3) When computing the mean,the smallest value
A)can never be negative
B)can never be zero
C)can never be less than the mean
D)can be any value
Answer: D
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Page 5
Chapter 4: Introduction to Probability
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Sample Questions
Q1) Events that have no sample points in common are
A)independent events
B)posterior events
C)mutually exclusive events
D)complements
Q2) Two events,A and B,are mutually exclusive and each have a nonzero probability.If event A is known to occur,the probability of the occurrence of event B is A)one
B)any positive value
C)zero
D)any value between 0 to 1
Q3) Tammy is a general contractor and has submitted two bids for two projects (A and B).The probability of getting project A is 0.65.The probability of getting project B is 0.77.The probability of getting at least one of the projects is 0.90.
a.What is the probability that she will get both projects?
b.Are the events of getting the two projects mutually exclusive? Explain,using probabilities.
c.Are the two events independent? Explain,using probabilities.
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Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) The records of a department store show that 20% of its customers who make a purchase return the merchandise in order to exchange it.In the next six purchases,
a.what is the probability that three customers will return the merchandise for exchange?
b.what is the probability that four customers will return the merchandise for exchange? c.what is the probability that none of the customers will return the merchandise for exchange?
Q2) The Poisson probability distribution is used with A)a continuous random variable
B)a discrete random variable
C)either a continuous or discrete random variable D)any random variable
Q3) 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)144
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Chapter 6: Continuous Probability Distributions
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Sample Questions
Q1) The average starting salary of this year's graduates of a large university (LU)is $20,000 with a standard deviation of $8,000.Furthermore,it is known that the starting salaries are normally distributed.
a.What is the probability that a randomly selected LU graduate will have a starting salary of at least $30,400?
b.Individuals with starting salaries of less than $15,600 receive a low income tax break.What percentage of the graduates will receive the tax break?
c.What are the minimum and the maximum starting salaries of the middle 95% of the LU graduates?
d.If 189 of the recent graduates have salaries of at least $32,240,how many students graduated this year from this university?
Q2) Which of the following is not a characteristic of the normal probability distribution?
A)The mean,median,and the mode are equal
B)The mean of the distribution can be negative,zero,or positive
C)The distribution is symmetrical
D)The standard deviation must be 1
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) A population consists of 500 elements.We want to draw a simple random sample of 50 elements from this population.On the first selection,the probability of an element being selected is
A)0.100
B)0.010
C)0.001
D)0.002
Q2) The standard deviation of a point estimator is called the A)standard deviation
B)standard error
C)point estimator
D)variance of estimation
Q3) As a rule of thumb,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 and n \(\ge\) 30
C)n \(\ge\) 30 and (1 - p)= 0.5
D)None of these alternatives is correct.
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Chapter 8: Interval Estimation
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Sample Questions
Q1) In order to determine the average weight of carry-on luggage by passengers in airplanes,a sample of 16 pieces of carry-on luggage was weighed.The average weight was 20 pounds.Assume that we know the standard deviation of the population to be 8 pounds.
a.Determine a 97% confidence interval estimate for the mean weight of the carry-on luggage.
b.Determine a 95% confidence interval estimate for the mean weight of the carry-on luggage.
Q2) The makers of a soft drink want to identify the average age of its consumers.A sample of 55 consumers was taken.The average age in the sample was 21 years with a standard deviation of 4 years.
a.Construct a 95% confidence interval for the true average age of the consumers.
b.Construct an 80% confidence interval for the true average age of the consumers. c.Discuss why the 95% and 80% confidence intervals are different.
Q3) If the population standard deviation of the lifetime of washing machines is estimated to be 900 hours,how large a sample must be taken in order to be 97% confident that the margin of error will not exceed 100 hours?
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Chapter 9: Hypothesis Tests
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Sample Questions
Q1) Refer to Exhibit 9-6.At 95% confidence,it can be concluded that the mean age is
A)not significantly different from 24
B)significantly different from 24
C)significantly less than 24
D)significantly more than 24
Q2) For a lower tail test,the p-value is the probability of obtaining a value for the test statistic
A)at least as small as that provided by the sample
B)at least as large as that provided by the sample
C)at least as small as that provided by the population
D)at least as large as that provided by the population.
Q3) At a local university,a sample of 49 evening students was selected in order to determine whether the average age of the evening students is significantly different from 21.The average age of the students in the sample was 23 with a standard deviation of 3.5.
a.Formulate the hypotheses for this problem.
b.Compute the test statistic.
c.Determine the p-value and test these hypotheses.Let \(\alpha\) = .05.
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Chapter 10: Statistical Inference About Means and
Proportions With Two Populations
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Sample Questions
Q1) Refer to Exhibit 10-2.Based on the results of question 18,the A)null hypothesis should be rejected
B)null hypothesis should not be rejected
C)alternative hypothesis should be accepted D)None of these alternatives is correct.
Q2) Refer to Exhibit 10-13.The null hypothesis for this test is
A)\(\mu\)1 - \(\mu\)2 \(\neq\) 0
B)\(\mu\)1 - \(\mu\)2 > 0
C)\(\mu\)1 - \(\mu\)2 < 0
D)\(\mu\)1 - \(\mu\)2 = 0
Q3) Among a sample of 50 M.D.'s (medical doctors)in the city of Memphis,Tennessee,10 indicated they make house calls;while among a sample of 100 M.D.'s in Atlanta,Georgia,18 said they make house calls.Determine a 95% interval estimate for the difference between the proportion of doctors who make house calls in the two cities.
Q4) Refer to Exhibit 10-8.The test statistic is A)0.098 B)1.645
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Chapter 11: Inferences About Population Variances
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Sample Questions
Q1) The symbol used for the variance of the population is
A) \(\sigma\)
B) \(\sigma\)<sup>2</sup>
C)S
D)S<sup>2</sup>
Q2) The manager of the service department of a local car dealership has noted that the service times of a sample of 30 new automobiles has a standard deviation of 6 minutes.A 95% confidence interval estimate for the standard deviation of the service times for all their new automobiles is
A)16.047 to 45.722
B)4.778 to 8.066
C)2.93 to 6.31
D)22.833 to 65.059
Q3) A sample of 16 students showed that the variance in the number of hours they spend studying is 25.At 95% confidence,test to see if the variance of the population is significantly different from 30.Use the critical value approach.
Q4) A random sample of 41 scores of students taking the ACT test showed a standard deviation of 8 points.Provide a 98% confidence interval estimate for the standard deviation of all the ACT test scores.
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Chapter 12: Tests of Goodness of Fit and Independence
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Sample Questions
Q1) Refer to Exhibit 12-2.At 95% confidence,the null hypothesis
A)should not be rejected
B)should be rejected
C)was designed wrong
D)None of these alternatives is correct.
Q2) Refer to Exhibit 12-3.The hypothesis is to be tested at the 5% level of significance.The critical value from the table equals
A)3.84
B)7.81
C)5.99
D)9.34
Q3) Refer to Exhibit 12-5.With a .05 level of significance,the critical value for the test is A)1.645
B)7.815
C)14.067
D)15.507
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Chapter 13: Analysis of Variance and Experimental Design
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Sample Questions
Q1) In the ANOVA,treatment refers to A)experimental units
B)different levels of a factor
C)the dependent variable
D)applying antibiotic to a wound
Q2) In an analysis of variance,one estimate of \(\sigma\)<sup>2</sup> is based upon the differences between the treatment means and the A)means of each sample
B)overall sample mean
C)sum of observations
D)populations have equal means
Q3) Refer to Exhibit 13-7.The number of degrees of freedom corresponding to between treatments is
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Chapter 14: Simple Linear Regression
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Sample Questions
Q1) Refer to Exhibit 14-6.The coefficient of determination (r<sup>2</sup>)equals
A)0.7071
B)-0.7071
C)0.5
D)-0.5
Q2) If the coefficient of correlation is a positive value,then the regression equation
A)must have a positive slope
B)must have a negative slope
C)could have either a positive or a negative slope
D)must have a positive y intercept
Q3) If the coefficient of correlation is 0.90,then the coefficient of determination
A)is also 0.9
B)is either 0.81 or -0.81
C)can be either negative or positive
D)must be 0.81
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Chapter 15: Multiple Regression
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Sample Questions
Q1) In regression analysis,the response variable is the A)independent variable
B)dependent variable
C)slope of the regression function
D)intercept
Q2) In multiple regression analysis,
A)there can be any number of dependent variables but only one independent variable
B)there must be only one independent variable
C)the coefficient of determination must be larger than 1
D)there can be several independent variables,but only one dependent variable
Q3) 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
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Chapter 16: Regression Analysis: Model Building
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Sample Questions
Q1) Refer to Exhibit 16-3.We want to test whether the parameter \(\beta\)<sub>2</sub> is significant.The test statistic equals
A)4
B)5
C)3
D)-3
Q2) In multiple regression analysis,the general linear model
A)can not be used to accommodate curvilinear relationships between dependent variables and independent variables
B)can be used to accommodate curvilinear relationships between the independent variables and dependent variable
C)must contain more than 2 independent variables
D)None of these alternatives is correct.
Q3) Refer to Exhibit 16-1.The coefficient of X<sub>2</sub>
A)is significant
B)is not significant
C)can not be tested,because not enough information is provided
D)None of these alternatives is correct.
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Chapter 17: Index Numbers
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Sample Questions
Q1) A price relative was computed for houses.The base period is 2005.The price relative in 2010 was 130.The interpretation of the price relative is that A)there has been a 130% increase in the price of houses from 2005 to 2010. B)there has been a 30% increase in the price of houses from 2005 to 2010.
C)the price of houses in 2010 was $130 higher than the price in 2005.
D)It is impossible to interpret the index.
Q2) Refer to Exhibit 17-3.The Paasche index in 2010 (rounded)is
A)96.268
B)97.245
C)102.833
D)103.876
Q3) Refer to Exhibit 17-1.The weighted aggregate price index in 2010 is
A)1.084
B)92.292
C)108.352
D)109.203
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19
Chapter 18: Forecasting
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Sample Questions
Q1) In the linear trend equation,T = b<sub>0</sub> + b<sub>1t</sub>,b<sub>0</sub> represents the A)time
B)slope of the trend line
C)trend value in period 1
D)the Y intercept
Q2) Refer to Exhibit 18-3.The intercept,b<sub>0</sub>,is
A)-1.5
B)+1.5
C)8.3
D)-8.3
Q3) A method that uses a weighted average of past values for arriving at smoothed time series values is known as
A)a smoothing average
B)a moving average
C)an exponential average
D)an exponential smoothing
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Chapter 19: Nonparametric Methods
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Sample Questions
Q1) If a null hypothesis that states that two populations are identical is rejected using a nonparametric test,then it is safe to assume that
A)neither the means nor the variances are equal
B)the means of the populations are not the same
C)the variances of the populations are not the same
D)We cannot be sure of the way in which the populations differ from each other.
Q2) Refer to Exhibit 19-3.The null hypothesis should be
A)rejected
B)not rejected
C)revised
D)None of these alternatives is correct.
Q3) The collection of statistical methods that require assumptions about the population is known as
A)distribution free methods
B)nonparametric methods
C)small populations
D)parametric methods
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Chapter 20: Statistical Methods for Quality Control
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Sample Questions
Q1) If the lower-control limit of a P chart is negative,
A)a mistake has been made in the computations
B)use the absolute value of the lower limit
C)it is set to zero
D)None of these alternatives is correct.
Q2) A production process is considered in control if no more than 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) A graph showing the probability of accepting the lot as a function of the percent defective in the lot is
A)a power curve
B)a control chart
C)an operating characteristic curve
D)None of these alternatives is correct.
Q4) A production process is considered in control if it processes at least 98.5% non-defective items.Samples of size 400 are used for the inspection process.Determine the upper and lower control limits for the P chart of defective elements.
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Page 22
Chapter 21: Decision Analysis
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Sample Questions
Q1) Nodes indicating points where an uncertain event will occur are known as A)decision nodes
B)chance nodes
C)marginal nodes
D)conditional nodes
Q2) Information about a state of nature is known as
A)natural information
B)states information
C)a sampling method
D)an indicator
Q3) The expected opportunity loss of the best decision alternative is the A)expected monetary value
B)payoff
C)expected value of perfect information
D)None of these alternatives is correct.
Q4) An intersection or junction point of a decision tree is called a (n)
A)junction
B)intersection
C)intersection point
D)node
Page 23
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Chapter 22: Sample Survey
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Sample Questions
Q1) Refer to Exhibit 22-4.The estimate of the standard error of proportion is
A)0.210
B)0.700
C)0.300
D)0.062
Q2) With nonprobabilistic sampling
A)it is possible to make estimates about the precision of the population parameters
B)it is not possible to make statements about the precision of estimates made concerning the population parameters
C)the precision can be estimated if the sample is larger than 30
D)None of these alternatives is correct.
Q3) An unbiased estimate of the population total is given by the
A)sample mean multiplied by the size of the sample
B)sample mean multiplied by the size of the population
C)sample size multiplied by the standard error
D)standard deviation divided by the square root of the sample size
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