Applicable Spring 11 Exam 1 Solutions

1. Answer: (E) As per the formula sheet, the standard error (for one mean w/ FPCF) is given as SE =

s n

N n N 1

""#

"%& ! $# "%& ! #

2. Answer: (C) Recall that the formula for a CI for one mean is given as

! $#

= 37.5

x t*

s n

N n N 1

x t *SE

In the previous problem, we acquired the SE = 37.5 Now, in the formula, we need to acquire the critical t value with 95% confidence and df = n 1 = 31 1 = 30 and we get a critical t of t* = 2.056 1387 + (2.056)(37.5) 1309.9 to 1464.1 Thus, the upper limit is given as 1464.1

3. Answer: (A) Recall that the shortcut for acquiring a confidence interval for the population total is to first create a confidence interval for the population mean and then multiply the endpoints by the population size, N

x t

s n

N n

(280)(1309.9) to (280)(1464.1) 366772 to 409948 Thus the lower endpoint is 366772 Note: Your answer might differ slightly by rounding error i.e. if we round to one more decimal, we get a slightly different answer. 4. Answer: (C) As per the review, we know that the formula for a CI for one proportion (using the FPCF) is given as " #
"

" % " " # " $ $ $ N 1 & # !

()

"!&% "!# ' &

'

" #! " $

( )

%!$ %!#

However, we are asked to create a ONE sided CI for the proportion of all developments that had one or more late payments. Here, we have to alter our critical z value from what would have been 1.96 (i.e. two- tailed area of .05 and df = ) to a critical z value of 1.645 (i.e. a ONEtailed area of .05 and df = ) Since we are told that 7 of the 31 payments were late, we know that p = 7/31 = .22581

"##$%& + &"'($

"##$%& & ! "##$%& )&

#%* ! )& #%* ! &

= .344

Note: We need only do the plus in the confidence interval since we are only asked for a ONE sided interval.

5. Answer: (A) Since we are told that our estimate for the upper bound is .3186, we can use this information to create an upper bound for the NUMBER of households that were late by multiplying by the population size, N .3186(280) = 89.2 89 7. Answer: (C) In order to determine if outliers exist, we can do an outlier check by computing the upper and lower fences lower fence = Q1 1.5(IQR) = 11.5 1.5(18 11.5) = 1.75 upper fence = Q3 + 1.5(IQR) = 18 + 1.5(18 11.5) = 27.75 Therefore, if we have any observations below 1.75 or above 27.75, these values will be considered outliers. Note: I know that the question only asks for the upper fence, but I always compute both just in case the next question asks me for the lower fence :) 8. Answer: (B) As per our discussion of outliers in the previous question, we need only scan the data to determine how many observations fall either below 1.75 or above 27.75 6 6 6 10 10 11 11 11 12 13 13 13 14 14 14 15 Tampa 15 16 17 17 17 18 18 18 18 18 18 18 19 20 27 31 34 Therefore, we have two outliers.

9. Answer: (D) As per the formula sheet, we know r = .4n 2 = .4(33) 2 = 11.2 r = 11 Note: We round this value of r to the nearest integer. 10. Answer: (B) As per our discussion in the previous problem, we know that we are supposed to take the 11th smallest/largest observations to create a CI for the median. 11th smallest observation = 13 11th largest observation = 18 Thus, the lower endpoint = 13 Note: Your professors solutions suggest that we are supposed to look at the 9th smallest/largest observations though I assume that is a typo. 11. Answer: (A) As per the formula sheet, we know that the formula for a CI for one mean is given as

" #"

$ %

where t comes from the ttable with 95% confidence and df = n 1 = 33 1 = 32. Looking on the ttable, we get t = 2.040

"#$%&' ()$*+*,

%$"&) --

!"#$%&' ($"&& = 13.5 to 17.9

12. Answer: (A) CI for median = 13 to 18 i.e. width = 18 13 = 5 CI for mean = 13.5 to 17.9i.e. width = 17.9 13.5 = 4.4 Therefore, the interval for the median is wider by about .6 Note on questions #14#16: Lets ignore this typo and do these problems for practice assuming that the question asked us to compare the North to the West. Yes, I just picked these two groups arbitrarily (and, if memory serves, on another form code of the exam it was these two groups that we being compared.) Cmon its good practice :) 14. Answer: (A) Since we can assume equal variance, we will use the pooled procedure, and thus we are asked to get the pooled variance

sp =

2 2 (n1 1)s1 + (n2 1)s2

n1 + n2 2

"## ! #$%&'() * + "+ ! #$)&'*, *

## + + ! *

= 17.15

15. Answer: (A) Recall the formula for the confidence interval for two independent means (assuming equal variances)

" " "% # "" ! "# # $ $% $ + ' # &" &# & !

In this formula, though, we know that df = n1 + n2 2 = 11 + 9 2 = 18 Thus, we will get the critical t value by looking on the t table with 90% confidence and df = 18 to acquire t = 1.746 We know ME = "
"
# #$ #

! $ " %$

16. Answer: (A) In order to compare the wait times, we should create a CI for the difference in mean wait times i.e. use the formula for the CI

! " "$ $$ & = "#$%& "$#"' # + & = 3.25 %# % " "" ( % !

" " "% # "" ! "# # $ $% $ + ' "" ! "# #$ !"#$%&$& ! '#%((() *%#+ = 5.215 to 11.715 ! # &" &# & !

Since the entire interval is POSITIVE we know that there IS a significant difference in the mean wait times i.e. the mean wait time in the North is significantly longer than that of the West. In the context of this problem, by the way, this would imply that the North is significantly worse than the West (presuming that we do not want to wait in line).

17. Answer: (E) If we do NOT assume equal variances then we do NOT use the pooled variance i.e. the formula for the test statistic is given as

"#$%# =

&" ! &# '"

#

("

'#

"#$%%% ! &'$()* &$+#' *

#

(#

)$##) "&

= "#$)

18. Answer: (B) As per the review (and STA2023) we know that the df for a twosample ttest will never be smaller than the smaller of the two sample sizes minus 1. In this case, we know that the nasty df will be at least 9 1 = 8 19. Answer: (A) As per our analysis in question #17, we know that the test statistic for the difference in the means is 12.6 In general, any test statistic bigger than about 2 or 3 yields a statistically significant result i.e. the corresponding pvalue would be less than alpha and/or the test statistic would fall in the rejection region. Since our test statistic is way bigger than 2 or 3, we can say that there is a statistically significant difference in the mean wait times of these two offices. Specifically, we can say that the mean wait time for the Central office is longer than the West office. Note: If you want to, you can look up the t test statistic of 12.6 on the t table (although what df you would use is something of debate). The whole purpose of this question was for you to recognize that this test statistic is off the charts i.e. it yields a significant difference no matter what.

20. Answer: (A) As per the output, we see that the number where the difference = 0 is 49 i.e. the data show that 49 of the tax returns are the same as they would have been if the program had not been used. 21. Answer: (A) As per the description in the problem, we are told that 14 paid up to $1,000 less i.e. the proportion who paid less is 14/69 = .2029 = 20.29% 22. Answer: (B) As per the output, we see that the average difference in the sample is $69.38 i.e. the average savings per client is $69.38 Note: Be careful with the wording of these questions. Since this question asks about the overall sample, we trust the average difference given. 23. Answer: (A) As per the confidence interval in the output, the resulting TOTAL savings for ALL such clients are anywhere from $111,497.59 to $1,212,628.24 Therefore, a total savings of a million dollars is feasible i.e. it is within the interval. Note: A total savings of, say, $1.5 million would NOT be feasible since it is not contained within the interval.