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Chapter
Name
QNT 561
Name
Date
Instructor
















Ch. 6 of Statistics for Business and Economics

6.2

The test statistic of a test of hypothesis is used to decide whether to reject the null hypothesis in
favor of the alternative hypothesis.


6.8

a)

Rejection region is shaded in blue color and the size is 0.025


b)



Rejection region is shaded in blue color and the size is 0.05


c)



Rejection region is shaded in blue color and the size is 0.005

d)




Rejection region is shaded in blue color and the size is 0.1003



e)

Rejection region is shaded in blue color and the size is 0.10 (Each side with 0.05)

f)



Rejection region is shaded in blue color and the size is 0.01 (Each side with 0.005)

g)

The probability of type I error are given below:

P(z > 1.96) = 0.025
P(z > 1.645)= 0.05
P(z > 2.575) = 2.575
P(z < -1.28) = 0.1003
P(z <-1.645 or z > 1.645) = 0.1
P(z <-2.575 or z > 2.575) = 0.01

6.11

Let p be the student loan default rate in this year. We need to see whether the rate is less than
0.45, therefore the hypothesis can be stated as follows.
H
0
: p=0.45
H
a
: p<0.45

6.13
Let be the caloric content of Virginia school lunches. Need to test whether the caloric content
is dropped after the testing period.
H
0
: =863
H
a
: <863

6.20

a)

H
0
: =100
H
a
: <100
Test statistic =

The test is a right tail test. Hence the rejection region is z > 1.645 at =0.05.
The calculated test statistic is greater than 1.645. Therefore we have enough evidence to
conclude that the mean is greater than 100 at =0.05.

b)

H
0
: =100
H
a
: 100
Test statistic =

The test is a two tail test. Hence the rejection region is z <-1.96 and z > 1.96 at =0.05.
The calculated test statistic is in between -1.96 and 1.96. We do not reject the null hypothesis H
0
.
Therefore we do not have enough evidence to conclude that the mean is not equal to 100 at
=0.05.

c) In part (a) we concluded that the mean was greater than 100 but in part (b) we did not reject
the null hypothesis. The reason for this is the alternative hypothesis in part (a) is more specific
than part (b).

6.22

a) Let be the Mach rating score for all purchasing managers. Here we need to test the
hypothesis:

H
0
: =85
H
a
: 85

b) This is a two-tailed test. Hence at =0.1 level the rejection region is z < -1.645 and z > 1.645.

c) Test statistic =

d) The test statistic is greater than the right side critical value 1.645. We reject the null
hypothesis. Therefore at =0.1 level we have enough evidence to conclude that the mean Mach
rating score of all purchasing managers is not equal to 85.

6.23
a) Here the test is a left tail test. Hence at =0.01 level, the rejection region is z < -2.33

b) Test statistic =

c) The calculated test statistic is not in the rejection region. Hence we fail to reject the null
hypothesis. At =0.01 level, we do not have enough evidence to conclude that the true mean
number of latex gloves used per week by all hospital employees is less than 20.

6.34

a) 0.06 is greater than 0.05. We fail to reject the null hypothesis
b) 0.10 is greater than 0.05. We fail to reject the null hypothesis
c) 0.01 < 0.05, we reject the null hypothesis
d) 0.001 < 0.05, we reject the null hypothesis
e) 0.251 is greater than 0.05. We fail to reject the null hypothesis
f) 0.042 < 0.05, we reject the null hypothesis

6.35
a) Since the p-value (0.10) is greater than 0.05 (alpha), we do not reject the null hypothesis
b) Since the p-value (0.05) is less than 0.10 (alpha), we reject the null hypothesis
c) Since the p-value (0.001) is less than 0.01 (alpha), we reject the null hypothesis
d) Since the p-value (0.05) is greater than 0.025 (alpha), we do not reject the null hypothesis
e) Since the p-value (0.45) is greater than 0.1 (alpha), we do not reject the null hypothesis

6.37

p-value=P(z<=2.17) = P(Z>=0)-P(0<=Z<=2.17)=0.5-0.4850 = 0.0150. Therefore the probability
of getting a test statistic which is 2.17 or more is unusual given the true mean is 100 is 0.0150.
Since this is very small, we have enough evidence that the true mean is greater than 100.

6.38
Test statistic =

p-value =P(Z>=1.6) + P(z <=-1.6) = 2*0.0548 = 0.1096
The p-value is greater than any alpha value less than 0.1. Therefore we do not have enough
evidence to reject the null hypothesis.

6.40

a) The p-value reported by SPSS is two-tailed. Hence the one tail p-value is 0.1032/2 = 0.0516.
Since the p-value is greater than alpha= 0.05 we fail to reject the null hypothesis. Therefore we
do not have enough evidence to conclude that < 75 at alpha-0.05.

b)One tailed p-value = P(z <= 1.63) = 1-0.0516 = 0.9484
Since the p-value is very large we fail to reject the null hypothesis. Therefore we do not have
enough evidence to conclude that the < 75 at alpha = 0.10

c) One tailed p-value = P(z >= 1.63) = 0.0516
Since the p-value is less than alpha =0.10 we reject the null hypothesis. Therefore we have
enough evidence to conclude that the > 75 at alpha = 0.10

d) The test is a two-tailed test. Hence the p-value is 0.1032 which is greater than alpha=0.01. We
fail to reject the null hypothesis. Therefore we do not have enough evidence to conclude that the
is different from 75 at alpha = 0.01

6.42

The p-value is 0.014. This means that the probability of observing a test statistic of t=2.48 of
more than that is unusual if = 25000 is 0.014. Since the given p-value is so small we can reject
the null hypothesis. Therefore we have enough evidence to conclude that the mean prices for
hybrid Toyota Prius cars is different from $25000 for alpha > 0.014


Ch. 7 of Statistics for Business and Economics


7.3

a) Z-table value for 95% confidence interval = 1.96
The 95% confidence interval is given by,
(

( )

( )

We are 95% confidence that the difference between the population means falls between 10.5 and
59.5

b)

The test statistic = z =
(

)(

()

The p-value of the test is = 2 * P(Z>=2.8) = 2*0.0026 = 0.0052. The p-value is small. We reject
the null hypothesis. Hence at alpha > 0.0052 we have enough evidence to conclude that the
means are different.

c) The p-value would be half of the part (b) which is 0.0026. Since this is small we have enough
evidence to reject the null hypothesis. Hence for any alpha > 0.0026 we can conclude that the
mean of the population 1 is larger than the mean of the population 2.

d)
The test statistic = z =
(

)(

()

The p-value of the test is = 2 * P(Z>=0.8) = 2*0.2119 = 0.4238. The p-value is so large. Hence
we do not have enough evidence to reject the null hypothesis. Therefore for any alpha <=0.10 we
do not have enough evidence to conclude that the difference between the two population means
is different from 25.

e) We need to assume that they are two independent random samples.

7.5

a) No. Both populations should be normal
b) No. Both population variances should be equal
c) No. Both populations should be normal
d) Yes.
e) No. Both populations should be normal

7.7
Sample mean for 1 = 2.36 and the sample variance = 0.733
Sample mean for 2 = 3.6 and the sample variance = 0.42

a)

( ) ( )

b)
H
0
:
2
-
1
= 0 vs. H
a
:
2
-
1
< 0

Test statistic =
()
(

The test statistic follows a t-distribution with df= 5+4-2 = 7. At alpha=0.1 the left tail t-table
value is -1.415. The rejection region is t < -1.415. Since the calculated test statistic is in the
critical region, at alpha=0.1 level the null hypothesis is rejected. Hence we have enough evidence
to conclude that
2
>
1
.

c)

The sample sizes are small. Hence we need 95% confidence level t-table value at df=7. Hence
the t-table value is 1.895. The 95% confidence interval is given by,
( )

) ( )
d)
Part (c) provides more information than the part (b). Part (b) only indicates that
2
>
1
for some
alpha level. But part (c) indicates how much we are confident on the difference between the two
means.

7.9
a) Given the p-value = 0.1150 which is not small, there is not enough evidence to reject the null
hypothesis at alpha=0.1. Hence we do not have enough evidence to indicate the two populations
means are differ at alpha < = 0.1 level.

b) When the test is one tailed then the p-value should be the half of 0.1150 which is 0.0575. At
alpha=0.05 we do not reject the null hypothesis. Therefore there is insufficient evidence to
conclude that the mean for population 1 is less than the mean for population 2. But for any alpha
value that is greater than 0.0575 we have enough evidence to conclude that the mean of the
population 1 is less than that of the population 2.

7.10

Sample size for Sample 1 = 15
Sample mean 1 for Sample 1 = 43.6
Sample variance for Sample 1 = 29.971

Sample size for Sample 1 = 16
Sample mean 1 for Sample 2 = 53.625
Sample variance for Sample 2 = 29.317

S
p
2
= ((15-1)*29.971 + (16-1)*29.317)/(15+16-2) = 29.633

a) H
0
:
2
-
1
= 10 vs. H
a
:
2
-
1
> 10

Test statistic =
()
(

)


Test statistic follows a t-distribution with degrees of freedom = 15+16-2 = 29. At 0.01 level the
right tail critical value from the t-table is 2.462. The calculated value is less than the table value.
We fail to reject the null hypothesis. Therefore at 0.01 level, we do not have enough evidence to
conclude that
2
-
1
>10.

b) The 98% confidence interval for
2
-
1
can be calculated as follows. t-table value for 98%
confidence level is 2.462.
( )

) ( )
Therefore we are 98% confident that the difference of population mean 1 and population mean 2
falls within 5.208 and 14.842.


7.25

a) The rejection region is the right tail at alpha=0.05 of the t-distribution with degrees of freedom
= 12-1 = 11
The table value is 1.796. Hence the critical region is t > 1.796

b) t-table value at alpha=0.1 and df=23 is 1.319. Hence the critical region is t > 1.319
c) t-table value at alpha=0.025 and df=3 is 3.182. Hence the critical region is t > 3.182
d) t-table value at alpha=0.01 and df=79 is 2.374. Hence the critical region is t > 2.374

7.29

a)
Mean difference = 468/40 = 11.7
Standard deviation of the mean difference =

Hypothesis test is, H
0
:
d
= 10 vs H
a
:
d
10

Test statistic =

Test statistic follows a z-distribution. The table value at alpha=0.05 (two-tail) is 1.96. The
rejection region is z <-1.96 and z>1.96. The calculated test statistic is not in the rejection region.
Hence we fail to reject the null hypothesis. At 0.05 level, we do not have enough evidence to
conclude that the mean difference is different from 10.

b)
The p-value = 2*P(z > = 1.792) = 2* 0.0367 = 0.0734. This is the probability that the test
statistic or anything more than that is unusual if the null hypothesis is true. Here the p-value is
not small which means that there is not enough evidence to conclude that the mean difference is
different from 10.

c) Since the sample size is 40, according to the Central Limit Theorem, we do not need to
assume that the population of differences is normally distributed.

7.43

When are both greater than 15 we can assume the normality.

a)

. Hence the sample sizes are not large enough to

conclude that the sampling distribution of

is approximately normal.

b)

. Hence the
sample sizes are not large enough to conclude that the sampling distribution of

is
approximately normal.

c)

. Hence the sample

sizes are not large enough to conclude that the sampling distribution of

is approximately
normal.

d)

. Hence the sample

sizes are not large enough to conclude that the sampling distribution of

is approximately
normal.

e)

. Hence the sample

sizes are not large enough to conclude that the sampling distribution of

is approximately
normal.

7.44

The z-table value for 95% confidence interval is 1.96. The 95% confidence interval is given by,
(

a) (

( )

( )

b) (

( )

( )

c) (

( )

( )


7.60

a) For a 95% confidence interval the z-value is 1.96.

()

b)Given the range is 40, an estimate for the standard deviation is 60/4 = 15
For 99% confidence interval the z-table value is 2.58

()

c) For 90% confidence interval the z-table value is 1.645

()

7.61

For a 95% confidence interval the z-value is 1.96.

()

( )

Ch. 9 of Statistics for Business and Economics

9.1

a) Right tail value of the chi-square distribution with df= 2 and = 0.05 is 5.9915.
Therefore the rejection region is
2
> 5.9915

b) Right tail value of the chi-square distribution with df= 4 and = 0.10 is 7.779.
Therefore the rejection region is
2
> 7.779

c) Right tail value of the chi-square distribution with df= 3 and = 0.01 is 11.345.
Therefore the rejection region is
2
> 11.345

9.5

If the probabilities are the same, p
10
= p
20
= p
30
= p
40
= 0.25

E
1
= np
10
= 205*0.25 = 51.25 = E
2
=E
3
=E
4


a) We need to do the following hypothesis test.

H
0
: p
1
=p
2
=p
3
=p
4
= 0.25
H
a
: At least one of the probability is different from 0.25

Test statistic =
()

()

()

()

The chi-square table value at alpha = 0.05 with df = 4-1 =3 is 7.815.
The calculated test statistics does not fall in the rejection region since it is less than 7.815. Hence
we fail to reject the null hypothesis. Therefore at alpha=0.05 level, we do not have enough
evidence to conclude that the multinomial probabilities are different.

b) Type I error: Conclude that the multinomial probabilities are different when actually they are
not different.
Type II error: Conclude that the multinomial probabilities are equal when actually they are not.

c) z-table value for 95% confidence interval is 1.96

Therefore the confidence interval is

(0.226, 0.350)

9.6

a)The location of professional sports stadiums and ballparks is the qualitative variable of interest
and it has 3 levels which are Downtown, Central City and Suburban.

b) Let p
1
be the proportion of major sports facilities located in downtown areas, p
2
be the
proportion of major sports facilities located in Central city and p
3
be the proportion of major
sports facilities located in suburban areas in 1997.

To test whether these proportions are different from the proportion in 1985 we need to test the
following hypothesis.

H
0
: p
1
=0.4, p
2
=0.3 and p
3
= 0.3
H
a
: At least one of the proportions is different from the values given in the null hypothesis.

c) E
1
= 113*0.40 = 45.2 , E
2
= 113*0.30 = 33.9 and E
3
= 113*0.30 = 33.9

d) Test statistic =
()

()

()

e) Degrees of freedom = 3-1 = 2 and the p-value is = P(
2
>=6.174). This falls between the
probabilities 0.025 and 0.01. It is smaller than alpha =0.05. We reject the null hypothesis.
Therefore we have enough evidence to conclude that the proportion in 1997 are different from
that of 1985 at alpha = 0.05 level.

9.17

a) Degrees of freedom =(r-1)*(c-1) = 4*4 =16 and at alpha = 0.05 the table value is 26.2962.
Therefore the rejection region is
2
> 26.2962

b) Degrees of freedom =(r-1)*(c-1) = 2*5 =10 and at alpha = 0.1 the table value is 15.9871.
Therefore the rejection region is
2
> 15.9871

c) Degrees of freedom =(r-1)*(c-1) = 1*2 =2 and at alpha = 0.01 the table value is 9.21034.
Therefore the rejection region is
2
> 9.21034

9.18

a) H
0
: The row and column classifications are independent
H
a
: The row and column classifications are dependent

b)
Test statistic =
(

Degrees of freedom = (r-1)*(c-1) = 1*2 = 2
The chi-square table value at alpha=0.1 = 9.21034. Therefore the rejection region is
2
Type
equation here.> 9.21034

c) Expected frequencies are:

d) Calculated test statistic =
(

The calculated test statistic is less than 9.21034, which means that it does not fall in the rejection
region. We fail to reject the null hypothesis. Therefore, we do not have enough evidence to
conclude that the row and column classifications are dependent.

Cage/M Cage/L Free/M Free/L Barn/M Barn/L Organic/M Organic/L
494 489 522 522 499 520 537 530
458 452 491 550 536 484 507 539
470 472 512 534 530 528 509 516
483 495


452 490






Cage/M,Cage/L,Free/M,Free/L,Barn/M,Barn/L,Organic/M,Organic/L
494,489,522,522,499,520,537,530
458,452,491,550,536,484,507,539
470,472,512,534,530,528,509,516
483,495,,,,,,
452,490,,,,,,
Source DF SS MS F P
Housing 3 10,742.162 3580.721 17.051 0.000
Weight class 1 302.286 302.286 1.439 0.244
Interaction 27 592.981 197.660 0.941 0.439
Error 20 4200.000 210.000


Total 27 15,837.429