Question: A consumer advocacy group is concerned about

> A restaurant owner is concerned about the consistency of business. He wants to determine if the standard deviation of the profits for each week is less than $300. The profits from last week are listed below (in dollars). Assume that profits are normally

> The manager of a supermarket would like the variance of the waiting times of the customers not to exceed 3 minutes-squared. She would add a new cash register if the variance exceeds this threshold. She regularly checks the waiting times of the customers

> An engineer wants to determine the effectiveness of a safety program. He collects annual loss of hours due to accidents in 12 plants before and after the program was put into operation. a. Specify the competing hypotheses that determine whether the sa

> Fresh numbers from the U.S. Department of Transportation suggest that fewer flights in the United States arrive on time than before. The explanations offered for the lackluster performance are understaffed airlines, a high volume of travelers, and overta

> The SAT is required of most students applying for college admission in the United States. This standardized test has gone through many revisions over the years. In 2005, a new writing section was introduced that includes a direct writing measure in the f

> Depression engulfs millions of Americans every day. A federal study reported that 10.9% of adults aged 18–24 identified with some level of depression versus 6.8% of adults aged 65 or older (The Boston Globe, October 18, 2010). Suppose 1,000 young adults

> A Health of Boston report suggests that 14% of female residents suffer from asthma as opposed to 6% of males (The Boston Globe, August 16, 2010). Suppose 250 females and 200 males responded to the study. a. Develop the appropriate null and alternative hy

> It is important for women to gain the right amount of weight during pregnancy by eating a healthy, balanced diet. It is recommended that a woman of average weight before pregnancy should gain 25 to 35 pounds during pregnancy (www.babycenter.com, August 2

> A farmer is concerned that a change in fertilizer to an organic variant might change his crop yield. He subdivides 6 lots and uses the old fertilizer on one half of each lot and the new fertilizer on the other half. The following table shows the results.

> A study examined “sidewalk rage” in an attempt to find insight into anger’s origins and offer suggestions for anger-management treatments (The Wall Street Journal, February 15, 2011). “Sidewalk ragers” tend to believe that pedestrians should behave in a

> The Federal Reserve Bank of St. Louis is a good source for downloading economic data. Go to research.stlouisfed.org/fred2/ to extract quarterly data on gross private saving (GPSAVE) from 2012 to 2015 (16 observations). Create a table that uses this infor

> It is well documented that cholesterol over 200 is a risk factor in developing heart disease for both men and women (www.livestrong.com, January 11, 2011). Younger men are known to have higher cholesterol levels than younger women; however, beyond age 55

> The accompanying table shows annual return data from 2001–2009 for Vanguard’s Balanced Index and European Stock Index mutual funds. Source: www.finance.yahoo.com a. Set up the hypotheses to test whether the mean ret

> Do men really spend more money on St. Patrick’s Day as compared to women? A survey found that men spend an average of $43.87 while women spend an average of $29.54 (USA Today, March 17, 2009). Assume that these data were based on a sample of 100 men and

> It has generally been believed that it is not feasible for men and women to be just friends (The New York Times, April 12, 2012). Others argue that this belief may not be true anymore since gone are the days when men worked and women stayed at home and t

> A report suggests that business majors spend the least amount of time on course work than all other college students (The New York Times, November 17, 2011). A provost of a university decides to conduct a survey where students are asked if they study har

> Due to late delivery problems with an existing supplier, the director of procurement at Electro Tech began to place orders for electrical switches with a new supplier as part of a “dual-source” (two-supplier) strategy. Now she wants to revert to a “singl

> Only 26% of psychology majors are satisfied with their career paths as compared to 50% of accounting majors (The Wall Street Journal, October 11, 2010). Suppose these results were obtained from a survey of 300 psychology majors and 350 accounting majors.

> According to a report, 32.2% of American adults are obese (The New York Times, August 15, 2008). Among ethnic groups in general, African American women are more overweight than Caucasian women, but African American men are less obese than Caucasian men.

> In an effort to make children’s toys safer and more tamperproof, toy packaging has become cumbersome for parents to remove in many cases. Accordingly, the director of marketing at Toys4Tots, a large toy manufacturer, wants to evaluate the effectiveness o

> There is a declining interest among teenagers to pursue a career in science and health care (U.S. News & World Report, May 23, 2011). Thirty college-bound students in Portland, Oregon, are asked about the field they would like to pursue in college. The c

> The director of housekeeping at Elegante, a luxury resort hotel with two locations (Seaside and Oceanfront), wants to evaluate housekeeping performance at those two locations. Random samples of 100 rooms were inspected at each location for defects (e.g.,

> More people are using social media to network, rather than phone calls or e-mails (U.S. News & World Report, October 20, 2010). From an employment perspective, jobseekers are no longer calling up friends for help with job placement, as they can now get h

> Research by Harvard Medical School experts suggests that boys are more likely than girls to grow out of childhood asthma when they hit their teenage years (BBC News, August 15, 2008). Scientists followed over 1,000 children between the ages of 5 and 12,

> According to the Pew report, 14.6% of newly married couples in 2008 reported that their spouse was of another race or ethnicity (CNN Living, June 7, 2010). In a similar survey in 1980, only 6.8% of newlywed couples reported marrying outside their race or

> Reducing scrap of 4-foot planks of hardwood is an important factor in reducing cost at a wood-flooring manufacturing company. Accordingly, engineers at Lumber works are investigating a potential new cutting method involving lateral sawing that may reduce

> A study claims that girls and boys do not do equally well on math tests taken from the 2nd to 11th grades (Chicago Tribune, July 25, 2008). Suppose in a representative sample, 344 of 430 girls and 369 of 450 boys score at proficient or advanced levels on

> Annual growth rates for individual firms in the toy industry tend to fluctuate dramatically, depending on consumers’ tastes and current fads. Consider the following growth rates (in percent) for two companies in this industry, Hasbro an

> John Daum and Chris Yin are star swimmers at a local college. They are preparing to compete at the NCAA Division II national championship meet, where they both have a good shot at earning a medal in the men’s 100-meter freestyle event. The coach feels th

> The following table presents a portion of the annual returns for Fidelity’s Select Automotive Fund (in percent). This mutual fund invests primarily in companies engaged in the manufacturing, the marketing, or the sales of automobiles, trucks, specialty v

> For staffing purposes, a retail store manager would like to standardize the number of checkout lanes to keep open on a particular shift. She believes that if the standard deviation of the hourly customer arrival rates is 8 customers or less, then a fixed

> The manager of a publishing company plans to give a $20,000 bonus to the top 15%, $10,000 to the next 30%, and $5,000 to the next 10% of sales representatives. If the publishing company has a total of 200 sales representatives, what is the expected bonus

> Fizzco, a beverage manufacturing company, is interested in determining whether the standard deviation of their dispensing process has changed from a required level of 5 milliliters. They have taken a random sample of 12 bottles and have measured the amou

> When faced with a power hitter, many baseball teams utilize a defensive shift. A shift usually involves putting three infielders on one side of second base against pull hitters. Many believe that a power hitter’s batting average is lowe

> It is fairly common for people to put on weight when they quit smoking. While a small weight gain is normal, excessive weight gain can create new health concerns that erode the benefits of not smoking. The accompanying table shows a portion of the weight

> The labor quotation department at Excabar, a large manufacturing company, wants to verify the accuracy of their labor bidding process (estimated cost per unit versus actual cost per unit). They have randomly chosen 35 product quotations that subsequently

> The following table shows the annual returns (in percent) for Fidelity’s Select Electronic and Select Utilities mutual funds for the years 2001 through 2009. Source: www.finance.yahoo.com a. Set up the hypotheses to test the claim tha

> The marketing department at Insure-Me, a large insurance company, wants to advertise that customers can save, on average, more than $100 on their annual automotive insurance policies (relative to their closest competitor) by switching their policies to I

> A report criticizes SAT-test-preparation providers for promising big score gains without any hard data to back up such claims (The Wall Street Journal, May 20, 2009). Suppose eight college-bound students take a mock SAT, complete a three-month test-prep

> A computer technology firm wishes to check whether the speed of a new processor exceeds that of an existing processor when used in one of its popular laptop computer models. Accordingly, it measures the time required (in seconds) to complete seven common

> The quality department at Electro Tech is examining which of two microscope brands (Brand A or Brand B) to purchase. They have hired someone to inspect six circuit boards using both microscopes. Below are the results in terms of the number of defects (e.

> Many attempts have been made to relate happiness with various factors. One such study relates happiness with age and finds that holding everything else constant, people are least happy when they are in their mid-40s (The Economist, December 16, 2010). Da

> A bank employs two appraisers. When approving borrowers for mortgages, it is imperative that the appraisers value the same types of properties consistently. To make sure that this is the case, the bank examines six properties (in $1,000s) that the apprai

> A diet center claims that it has the most effective weight loss program in the region. Its advertisements say, “Participants in our program lose more than 5 pounds within a month.” Six clients of this program are weigh

> A manager of an industrial plant asserts that workers on average do not complete a job using Method A in the same amount of time as they would using Method B. Seven workers are randomly selected. Each worker’s completion time (in minute

> Consider the following matched-pairs sample that represents observations before and after an experiment. Assume that the sample differences are normally distributed. a. Construct the competing hypotheses to determine if the experiment increases the mag

> Consider the following competing hypotheses and relevant summary statistics: Conduct this test at the 5% significance level. State your assumptions. Hoi oilo s1 Sample 1: s = 935 and n, = 14 Sample 2: s = 812 and n2 = 11

> Consider the following competing hypotheses and relevant summary statistics: Assume that the two populations are normally distributed. Conduct this test at the 5% significance level. Hoi oilo = 1 Hại olo #1 Sample 1: x, = 48.5, s = 18.7, and n, = 1

> Consider the following measures based on independently drawn samples from normally distributed populations: a. Construct the 95% interval estimate for the ratio of the population variances. b. Using the confidence interval from part (a), test if the ra

> A replacement part for a machine must be produced within close specifications in order for it to be acceptable to customers. A random sample of 20 parts drawn from a normally distributed population yields a sample variance of s2 = 0.03. a. Construct the

> Researchers at the Wharton School of Business have found that men and women shop for different reasons. While women enjoy the shopping experience, men are on a mission to get the job done. Men do not shop as frequently, but when they do, they make big pu

> Access the data accompanying this exercise. a. Compute and interpret the correlation coefficient for household income and house value. b. Compute and interpret the correlation coefficient for household income and the percentage of the residents who are

> Recent evidence suggests that graduating from college during bad economic times can impact the graduate’s earning power for a long time (Financial Times, June 1, 2012). An associate dean at a prestigious college wants to determine if the starting salary

> Baseball has always been a favorite pastime in America and is rife with statistics and theories. In a paper, researchers showed that major league players who have nicknames live an average of 2½ years longer than those without them (The Wall Street Journ

> The production department at Greenside Corporation, a manufacturer of lawn equipment, has devised a new manual assembly method for its lawn tractors. Now it wishes to determine if it is reasonable to conclude that the mean assembly time of the new method

> According to a study published in the New England Journal of Medicine, overweight people on low-carbohydrate and Mediterranean diets lost more weight and got greater cardiovascular benefits than people on a conventional low-fat diet (The Boston Globe, Ju

> The “See Me” marketing agency wants to determine if time of day for a television advertisement influences website searches for a product. They have extracted the number of website searches occurring during a one-hour period after an advertisement was air

> Some transportation experts claim that it is the variability of speeds, rather than the level of speeds, that is a critical factor in determining the likelihood of an accident occurring (Update, Virginia Department of Transportation, Winter 2000). One of

> In May 2008, CNN reported that sports utility vehicles (SUVs) are plunging toward the “endangered” list. Due to soaring oil prices and environmental concerns, consumers are replacing gas-guzzling vehicles with fuel-efficient smaller cars. As a result, th

> A phone manufacturer wants to compete in the touch screen phone market. Management understands that the leading product has a less than desirable battery life. They aim to compete with a new touch screen phone that is guaranteed to have a battery life mo

> A design engineer at Sperling Manufacturing, a supplier of high-quality ball bearings, claims a new machining process can result in a higher daily output rate. Accordingly, the production group is conducting an experiment to determine if this claim can b

> David Anderson has been working as a lecturer at Michigan State University for the last three years. He teaches two large sections of introductory accounting every semester. While he uses the same lecture notes in both sections, his students in the first

> The director of graduate admissions at a local university is analyzing the relationship between scores on the Graduate Record Examination (GRE) and subsequent performance in graduate school, as measured by a student’s grade point average (GPA). She uses

> The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know

> You would like to test the claim that the variance of a normally distributed population is more than 2 squared units. You draw a random sample of 10 observations as 2, 4, 1, 3, 2, 5, 2, 6, 1, 4. At α = 0.10, test the claim.

> Consider the following sample data drawn independently from normally distributed populations with equal population variances. Sample 1 ………………………………………………………………………………………. Sample 2 12.1 ………………………………………………………………………………………………………. 8.9 9.5 ……………………………………………………

> In order to conduct a hypothesis test for the population variance, you compute s2 = 75 from a sample of 21 observations drawn from a normally distributed population. Conduct the following tests at α = 0.10. a. H0: σ2 ≤ 50; HA: σ2 > 50 b. H0: σ2 = 50; HA:

> Consider the following competing hypotheses and accompanying sample data drawn independently from normally distributed populations. a. Implement the test at the 5% significance level under the assumption that the population variances are equal. b. Impl

> A realtor studies the relationship between the size of a house (in square feet) and the property taxes (in $) owed by the owner. The accompanying table shows a portion of the data for 20 homes in a suburb 60 miles outside of New York City Property Taxes

> Diversification is considered important in finance because it allows investors to reduce risk by investing in a variety of assets. It is especially effective when the correlation between the assets is low. Consider the accompanying table, which shows a p

> The new manager of a theater would like to offer discounts to increase the number of tickets sold for shows on Monday and Tuesday evenings. She uses a sample of 30 weeks to record the number of tickets sold on these two days. A portion of the data is sho

> In June 2009, an onslaught of miserable weather in New England played havoc with people’s plans and psyches. However, the dreary weather brought a quiet benefit to many city neighborhoods. Police reported that the weather was a key fact

> A researcher interviews 50 employees of a large manufacturer and collects data on each worker’s hourly wage (Wage in $), years of higher education (EDUC), years of experience (EXPER), and age (AGE). A portion of the data is shown in the

> Many of today’s leading companies, including Google, Microsoft, and Facebook, are based on technologies developed within universities. Lisa Fisher is a business school professor who would like to analyze university factors that enhance

> There has been a lot of discussion regarding the relationship between Scholastic Aptitude Test (SAT) scores and test-takers’ family income (The New York Times, August 27, 2009). It is generally believed that the wealthier a student&acir

> A research analyst is trying to determine whether a firm’s price earnings (P/E) and price-sales (P/S) ratios can explain the firm’s stock performance over the past year. A P/E ratio is calculated as a firm’s share price compared to th

> The homeownership rate in the U.S. was 67.4% in 2009. In order to determine if homeownership is linked with income, 2009 state-level data on the homeownership rate (Ownership in %) and median household income (Income in $) were collected. A portion of th

> In response to the Great Recession, Federal Reserve leaders continue to keep the short-run target interest rate near zero. While the Fed controls short-term interest rates, long-term interest rates essentially depend on supply and demand dynamics, as wel

> A sample of 25 observations provides the following statistics: a. Calculate and interpret the sample correlation coefficient rxy. b. Specify the competing hypotheses in order to determine whether the population correlation coefficient differs from zer

> The following table shows a portion of the monthly returns data (in percent) for 2010–2016 for two of Vanguard’s mutual funds: The Vanguard Energy Fund and the Vanguard Healthcare Fund. a. Calculate and interpret the

> Is it defense or offense that wins football games? Consider the following portion of data, which includes a team’s winning record (Win in %), the average number of yards gained, and the average number of yards allowed during the 2009 NF

> Consider the following information on the expected return for companies X and Y. a. Calculate the expected value and the standard deviation of returns for companies X and Y. b. Calculate the correlation coefficient if the covariance between X and Y is

> The accompanying data file shows the selling price of a used sedan, its age, and its mileage. Estimate two models: Which model provides a better fit for y? Justify your response with two goodness-of-fit measures. Model 1: Price =Bo+BjX¡Age + E Mode

> The accompanying data file shows the square footage and associated property taxes for 20 homes in an affluent suburb 30 miles outside New York City. a. Estimate a home’s property taxes as a linear function of the size of the home (measured by its square

> The director of college admissions at a local university is trying to determine whether a student’s high school GPA or SAT score is a better predictor of the student’s subsequent college GPA. She formulates two models:

> A sample of 10 observations provides the following statistics: a. Calculate and interpret the sample correlation coefficient rxy. b. Specify the competing hypotheses to determine whether the population correlation coefficient is positive. c. Calculate

> The accompanying table shows a portion of data consisting of the selling price, the age, and the mileage for 20 used sedans. a. Estimate the sample regression equation that enables us to predict the price of a sedan on the basis of its age and mileage.

> The accompanying table shows a portion of data consisting of the rent, the number of bedrooms, the number of bathrooms, and the square footage for 40 apartments in the college town of Ann Arbor, Michigan a. Determine the sample regression equation that

> Consider the following competing hypotheses: The sample consists of 30 observations and the sample correlation coefficient is −0.60. a. Calculate the value of the test statistic and the p-value. b. At the 5% significance level, what

> American football is the highest paying sport on a per-game basis. The quarterback, considered the most important player on the team, is appropriately compensated. A sports statistician wants to use 2009 data to estimate a multiple linear regression mode

> The facility manager at a pharmaceutical company wants to build a regression model to forecast monthly electricity cost. Three main variables are thought to dictate electricity cost (in $): (1) average outdoor temperature (Avg Temp in °F), (2)

> Education reform is one of the most hotly debated subjects on both state and national policy makers’ list of socioeconomic topics. Consider a linear regression model that relates school expenditures and family background to student perf

> Calculate the expected numerical grade in Professor Underwood’s class using 4.0 for A, 3.0 for B, etc.

> The maintenance manager at a trucking company wants to build a regression model to forecast the time (in years) until the first engine overhaul based on four explanatory variables: (1) annual miles driven (in 1,000s of miles), (2) average load weight (in

> A realtor in Arlington, Massachusetts, is analyzing the relationship between the sale price of a home (Price in $), its square footage (Sqft), the number of bedrooms (Beds), and the number of bathrooms (Baths). She collects data on 36 sales in Arlington

> Finger dexterity, the ability to make precisely coordinated finger movements to grasp or assemble very small objects, is important in jewelry making. Thus, the manufacturing manager at Gemco, a manufacturer of high-quality watches, wants to develop a reg

> A horticulturist is studying the relationship between tomato plant height and fertilizer amount. Thirty tomato plants grown in similar conditions were subjected to various amounts of fertilizer (in ounces) over a four-month period, and then their heights

> Refer to the accompanying data file on happiness and age to answer the following questions. a. Estimate a simple linear regression model with Happiness as the response variable and Age as the explanatory variable. b. Use the sample regression equation t

> Consider the following competing hypotheses: The sample consists of 25 observations and the sample correlation coefficient is 0.15. a. Calculate the value of the test statistic and the p-value. b. At the 5% significance level, what is the conclusion

> A social scientist would like to analyze the relationship between educational attainment (in years of higher education) and annual salary (in $1,000s). He collects data on 20 individuals. A portion of the data is as follows: Salary ………………………………………………………