File: ch09, Chapter 9: Statistical Inference: Hypothesis Testing for Single Populations

True/False

1. Hypotheses are statements about business phenomena known to be accurate and true. Ans: False Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Easy

2. Generally speaking, new hypotheses that business researchers want to prove are stated in the alternate hypothesis. Ans: True Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Easy

3. A null hypothesis must always include the equality sign. Ans: True Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

4. If the result of a hypothesis test is statistically significant, it must be considered a substantive result. Ans: False Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Hard

5. A hypothesis test always contains the possibility of committing one of two types of errors called Type I and Type II errors. Ans: True

Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Easy

6. Probability of committing a Type I error is equal to 1 minus the probability of committing a Type II error. Ans: False Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

7. A Type I error is committed when a null hypothesis, which is indeed true, is rejected. Ans: True Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Easy

8. The probability of committing a Type I error is called the power of the test. Ans: False Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

9. The power of a test is equal to 1 minus the probability of Type II error. Ans: True Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

10. The null hypothesis is rejected if the p-value (i.e., the probability of getting a test statistic at least as extreme as the observed value) is greater than the significance level. Ans: False Response: See section 9.2 Testing Hypotheses about a Population Mean Using the z Statistic ( Known) Difficulty: Hard

Multiple Choice

11. The probability of committing a Type I error is called _______________. a) the level of significance b) the confidence level c) the power of the test d) the efficiency of the test e) the reliability of the test Ans: a Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

12. If a true null hypothesis is rejected, the researcher has committed a ___________. a) Type I error b) Type II error c) hypothetical error d) judgmental error e) non-sampling error Ans: a Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Medium

13. The power of a hypothesis test is represented by _____________________. a) the probability of Type I error b) the probability of Type II error c) 1 the probability of Type I error d) 1 the probability of Type II error e) 2 sum of the probabilities of Type I and Type II errors Ans: d Response: See section 9.1 Introduction to Hypothesis Testing Difficulty: Hard

14. The dean of a business school claims that the average starting salary of its graduates is more than 60 (in $000s). It is known that the population standard deviation is 10 (in $000s). Sample data on the starting salaries of 64 randomly selected recent graduates yielded a mean of 62 (in $000s). Which of the following sets of hypotheses is correct? a) H0: = 60 and Ha: 60 b) H0: = 60 and Ha: < 60 c) H0: = 60 and Ha: > 60 d) H0: > 60 and Ha: < 60 e) H0: < 60 and Ha: > 60 Ans: c Response: See section 9.2 Testing Hypotheses about a Population Mean Using the z Statistic ( Known) Difficulty: Medium

15. The dean of a business school claims that the average starting salary of its graduates is more than 60 (in $000s). It is known that the population standard deviation is 10 (in $000s). Sample data on the starting salaries of 64 randomly selected recent graduates yielded a mean of 62 (in $000s). What is the value of the sample test statistic? a) 2.00 b) 1.80 c) 1. 85 d) 1.65 e) 1.60 Ans: e Response: See section 9.2 Testing Hypotheses about a Population Mean Using the z Statistic ( Known) Difficulty: Medium

16. The dean of a business school claims that the average starting salary of its graduates is more than 60 (in $000s). It is known that the population standard deviation is 10 (in $000s). Sample data on the starting salaries of 64 randomly selected recent graduates yielded a mean of 62 (in $000s). What is the critical value for the rejection region if the level of significance is 5%? a) 2.00 b) 1.80 c) 1. 85 d) 1.65 e) 1.60 Ans: d

Response: See section 9.2 Testing Hypotheses about a Population Mean Using the z Statistic ( Known) Difficulty: Medium

17. The dean of a business school claims that the average starting salary of its graduates is more than 60 (in $000s). It is known that the population standard deviation is 10 (in $000s). Sample data on the starting salaries of 64 randomly selected recent graduates yielded a mean of 62 (in $000s). What is the p-value for the hypothesis test to check out the deans claim? a) 1.60 b) 1.65 c) 0.4452 d) 0.05 e) 0.0548 Ans: e Response: See section 9.2 Testing Hypotheses about a Population Mean Using the z Statistic ( Known) Difficulty: Medium

18. A department store wants to test the claim that 40% of its customers browse the stores website prior to visiting the store using a random sample of 100 customers. If the desired level of significance is 0.05, what are the critical values for the sample proportion that determine the rejection region? a) 0.400 and 0.495 b) 0.480 and 0.520 c) 0.500 and 0.540 d) 0.452 and 0.525 e) 0.304 and 0.496 Ans: e Response: See section 9.4 Testing Hypotheses about a Proportion Difficulty: Medium

19. A bank manager wants to test the claim that the population variance of the daily deposits (which are known to be normally distributed) into the savings account at the bank is $625. A

random sample of 16 deposits had a mean of $350 and a standard deviation of $24. What is the appropriate test statistic to check out the claim made? a) 0.576 b) 14.824 c) 25.000 d) 13.824 e) 32.549 Ans: d Response: See section 9.5 Testing Hypotheses about a Variance Difficulty: Medium

20. A bank manager wants to test the claim that the population variance of the daily deposits (which are known to be normally distributed) into the savings account at the bank is $625. A random sample of 16 deposits had a mean of $350 and a standard deviation of $24. What is the appropriate statistical decision with respect to the null hypothesis that the population variance is equal to 625 tested against the alternate hypothesis that it is not equal to 625 if the desired level of significance is 10%? a) Reject the null hypothesis b) Do not reject the null hypothesis c) Reject both hypotheses d) Accept both hypotheses e) Test inconclusive, increase sample size Ans: b Response: See section 9.5 Testing Hypotheses about a Variance Difficulty: Medium