ECO2121 Practice Sample for Final
I. Multiple Choices
1. For a continuous random variable X, the probability density function f(x) represents
a. the probability at a given value of x.
b. the area under the curve at x.
c. the area under the curve to the right of x.
d. none of the above.
2. Which of the following does NOT need to be known in order to compute the p-
value?
a. knowledge of whether the test is one-tailed or two-tailed
b. the value of the test statistic
c. the level of significance
d. the probability distribution of the test statistic
3. If the null hypothesis is rejected at 5% level of significance, it
a. will always be rejected at the 1% level.
b. will always not be rejected at the 1% level.
c. will never be tested at the 1% level.
d. may be rejected or not rejected at the 1% level.
e. will not be rejected at the 10% level.
4. If the coefficient of determination is 0.64, the coefficient of correlation
a. is 0.6561
b. must be 0.8
c. must be positive
d. is the same
e. None of these answers is correct.
5. As the number of degrees of freedom for a Student-t distribution increases, the
difference between this t distribution and the standard normal distribution
a. becomes smaller.
b. becomes larger.
c. stays the same.
d. indeterminate.
6. Events that have no sample points in common are
a. independent events.
b. mutually exclusive events.
c. posterior events.
d. complements.
7. Which of the following graphical methods is not appropriate for summarizing
qualitative data?
a. Pie chart.
b. Pareto diagram.
c. Histogram.
d. Bar chart.
8. Which of the following is true?
a. Two events with nonzero probabilities can be both mutually exclusive and
independent.
b. Two events that are mutually exclusive must be independent.
c. Two events with nonzero probabilities cannot be both mutually exclusive and
independent.
d. Two events that are mutually exclusive cannot be independent.
9. Russel would like to conduct a survey of homeowners in the Meadowbrook
neighborhood to get their opinions on proposed road modifications in the area. Which
of the following is an example of a simple random sample?
a. Russel randomly chooses two streets in the neighborhood and selects every home on
these streets.
b. Russel selects the first 20 homes that she passes as she walks into the entrance of
the neighborhood.
c. Russel selects every third house on each street in the neighborhood.
d. None of these choices describes a simple random sample.
10. When dealing with the number of occurrences of an event over a specified interval
of time or space, which of the following is the most appropriate probability distribution?
a. Poisson distribution.
b. Binomial distribution.
c. Hypergeometric distribution.
d. Normal distribution.
e. Uniform distribution.
11. The Central Limit Theorem (CLT) states that the
a. sample proportion is normally distributed as long as np ≥ 5 and n(1-p) ≥ 5
b. sample means of large samples will be normally distributed regardless of the shape
of the population distribution
c. population mean of large samples will be normally distributed regardless of the shape
of the population distribution
d. sample means of any samples will be normally distributed regardless of the shape
of their population distributions
12. We are interested in implementing a conventional ANOVA procedure to test the
hypothesis that the population means of k populations are equal. Which of the following
is a crucial assumption underlying the ANOVA procedure?
a. The selected samples are dependent on each other.
b. Sampled populations are all uniform.
c. Sampled populations have equal variances.
d. Sampled populations have equal means.
13. You have computed a 95% confidence interval. If you compute another confidence
interval using the same standard deviation, with an increased sample size, but having
the same margin of error, what must have happened to the level of confidence in your
new interval?
a. The level of confidence must be greater than 95%.
b. The level of confidence must be less than 95%.
c. The level of confidence must be equal to 95%.
d. The level of confidence may be greater, less than or equal to 95%.
14. Consider the following matched-pair sample data:
Variable 1: 5 3 5 8 4 5
Variable 2: 7 5 3 1 2 4
The sample covariance for this data set is
a. -1.80.
b. -1.50
c. 1.80.
d. 1.50.
15. In a sample of 1000 SME students, 400, or 40%, are Economics majors. The 40%
is an example of
a. a sample.
b. a population.
c. descriptive statistics.
d. statistical inference.
II. Free Response
Show detailed steps and explanations for the following questions. Do NOT use
Excel commands to answer the questions.
1. Let X be a continuous random variable for which E(X) = μ and Var(X) = σ2. Show
that
E[(X − 1)2]= (μ − 1)2 + σ2.
2. In the United States, the height of males measured in inches is approximately
normal, with standard deviation 2.9 inches. The distribution of the height of females is
also approximately normal, with standard deviation 2.7 inches.
Exhibit 1
Suppose the sub-population of males has mean 69.1 inches (for Exhibits 1 and 4 only).
A random sample of size 𝑛1 = 100 is selected from the sub-population of males.
Denote the sample mean by 𝑋̅1.
a. What is the mean of ?
b. What is the standard error of ?
c. What distribution can be used to approximate the sampling distribution of ?
(Please specify the parameters of this distribution.)
Exhibit 2
Now, denote the population mean of the female sub-population by 𝜇2 and we are
interested in testing 𝐻0 : 𝜇2 = 63.7 against 𝐻1 : 𝜇2 ≠ 63.7. Set the significance level to
be 0.05. Another random sample of size 𝑛2 = 400 is selected from the sub-population
of females. Suppose the sample mean is 64 inches. Denote the sample mean of the
second random sample by 𝑋̅2.
d. State an appropriate test statistic and compute its value.
e. Use the critical value method to conduct the hypothesis testing and state your
conclusion.
f. What is the definition of p-value? Compute the p-value here. What is your
conclusion based on the p-value approach?
g. Will your conclusion change if the significance level is changed to 0.01?
Exhibit 3
Denote the population means of the male sub-population and female sub-population by
𝜇1 and 𝜇2 , respectively. We are now interested in testing 𝐻0 : 𝜇1 = 𝜇2 against 𝐻1 : 𝜇1 ≠
𝜇2 . Suppose the two random samples drawn in Exhibit 1 and Exhibit 2 are independent,
with sample sizes 𝑛1 = 100 and 𝑛2 = 400, and with sample means 𝑋̅1 = 68 inches and
𝑋̅2 = 63.7 inches, respectively.
h. State an appropriate statistic and compute its value
i. Complete this hypotheis testing problem at 5% significance level, based on
either the critical value method or p-value approach.
Exhibit 4
Suppose it is known that the population mean of the male sub-population is 69.1 inches
(for Exhibits 1 and 4 only) and population mean of the female sub-population is 63.7
inches.
j. Assume that the prior probability of a randomly selected person being
male is 0.5. We also learnt that the height of a randomly selected person is
between 64.0 and 65.5 inches. What is the (approximate) probability that a
female was selected? [Hint: Bayes’ theorem.]
3. Many people who bought X-Game gaming systems over the holidays have
complained that the systems they purchased were defective. In a random sample of 300
units sold, 18 units were defective.
a. We would like to construct an interval estimatior for the population defective rate p.
Denote the sample proportion of defective systems by 𝑝̅ . What is the sampling
distribution of 𝑝̅ ? What condition(s) need to be satisfied so that we can use the normal
distribution to approximate the sampling distribution of 𝑝̅?
b. Construct a 95% confidence interval for the percentage of defective systems. Save
final results to 5 decimal points.
4. The queuing time, X minutes, of a customer at a till of a super market has
probability density function
3
𝑓(𝑥) = {4 𝑥(𝑘 − 𝑥), for 0 ≤ 𝑥 ≤ 𝑘,
0, otherwise.
a. Calculate the value of the constant k.
b. Find the mean of the distribution of queuing time.
5. Information regarding the ACT scores of samples of students in three different
majors is given below.
Major
Management Finance Accounting
Sample size 12 9 12
Average 24 25 26
Sample variance 18 7 10
a. Compute the overall sample mean .
b. Set up the ANOVA table for this problem including the test
statistic.
c. Using α = .01, determine the critical value of F.
Using the critical value approach, test to determine whether there is a
d.
significant difference in the means of the three populations.
e. Determine the p-value and use it for the test.