1. Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?

Product FIFO (F) FIFO(L)

1 225 221

2 119 100

3 100 113

4 212 200

5 248 245

This example is what type of test?

Answer 

    

One sample test of means.

   

Two sample test of means.

   

Paired   t-test.

   

Test of proportions.

2. Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?
Product FIFO (F) FIFO(L)

1 225 221

2 119 100

3 100 113

4 212 200

5 248 245

What is the value of calculated t?

Answer 

    

+0.93

   

±2.776

   

+0.47

   

-2.028

   

None of these.

3. In a market test of a new chocolate raspberry coffee, a poll of 400 people from Dobbs Ferry showed 250 preferred the new coffee. In Irvington, 170 out of 350 people preferred the new coffee. To test the hypothesis that there is no difference in preferences between the two villages, what is the alternate hypothesis?

A π 1 < π2

B π 1 > π2

C π 1 = π2

D π 1 ≠ π2

4. If we are testing for the difference between two population means and assume that the two populations have equal and unknown standard deviations, the degrees of freedom are computed as (n1)(n2) – 1.

Answer 

True
False

5. If the null hypothesis states that there is no difference between the mean net income of retail stores in Chicago and New York City, then the test is two-tailed.

Answer True
False

6. If we are testing for the difference between two population means and assume that the two populations have equal but unknown standard deviations, then the test has (n1 + n2 – 2) degrees of freedom.

Answer 

True
False 

7.The pooled estimate of the proportion is found by dividing the total number of samples by the total number of successes.

Answer 

True
False

8. When testing for a difference between the means of two dependent samples, n1 = n2.

Answer 

True
False

9. The t distribution is more spread out and flatter at the center than the standard normal distribution. However, as the sample size increases, the t distribution curve approaches the standard normal distribution.

Answer 

True
False

10. A group of statistics students decided to conduct a survey at their university to find the average (mean) amount of time students spent studying per week. Assuming a population standard deviation of 3 hours, what is the required sample size if the error should be less than ½ hour with a 99% level of confidence?

Answer 

    

196

   

240

   

15

   

16

11. If 95% and 98% confidence intervals were developed to estimate the true cost of the microwave, what differences would they have?

Answer 

    

Standard errors

   

Interval widths

   

Z-variates

   

Both   b and c

     

12. The distribution of Student’s t is

Answer 

    

symmetrical

   

negatively skewed

   

positively skewed

   

a discrete probability distribution

13. The test statistic t has n – 1 degrees of freedom.

Answer 

True
False

14. A survey of 25 grocery stores revealed that the average price of a gallon of milk was $2.98 with a standard error of $0.10. If 90% and 95% confidence intervals are developed to estimate the true cost of a gallon of milk, what similarities would they have?

Answer 

    

Point estimates

   

t-statistics

   

Standard errors

   

Both   a and c

15. The mean number of travel days per year for salespeople employed by hardware distributors needs to be estimated with a 0.90 degree of confidence. For a small pilot study the mean was 150 days and the standard deviation was 14 days. If the population mean is estimated within two days, how many salespeople should be sampled?

Answer 

    

134

   

452

   

511

   

2100

16. If university officials say that at least 70% of the voting student population supporting the fee increase, If the 95% confidence interval is [0.75, 0.85], what conclusion can be drawn based on a 95% level of confidence?

Answer 

    

70% is not in the interval, need to take another sample

   

70% is not in the interval, so assume it will not be   supported

   

70%   is below the interval, so assume it will be supported

   

Since this was not based on population, cannot make   conclusion

17 . It is claimed that in a bushel of peaches less than ten percent are defective. A sample of 400 peaches is examined and 50 are found to be defective. What is the z-statistic?

Answer 

    

0.025

   

0.278

   

-1.65

   

1.67

18. What are the two critical values for a two-tailed test with a 0.01 level of significance when n is large and the population standard deviation is known?

Answer 

    

Above 1.96 and below -1.96

   

Above 1.65 and below -1.65

   

Above   2.58 and below -2.58

   

Above 1.00 and below -1.00

     

19. The standard normal distribution is the appropriate distribution when testing a hypothesis about a population proportion.

Answer 

True
False

20. A manufacturer of stereo equipment introduces new models in the fall. Retail dealers are surveyed immediately after the Christmas selling season regarding their stock on hand of each piece of equipment. It has been discovered that unless 40% of the new equipment ordered by the retailers in the fall had been sold by Christmas, immediate production cutbacks are needed. The manufacturer has found that contacting all of the dealers after Christmas by mail is frustrating as many of them never respond. This year 80 dealers were selected at random and telephoned regarding a new receiver. It was discovered that 38% of those receivers had been sold. Since 38% is less than 40%, does this mean that immediate production cutbacks are needed or can this difference of 2 percentage points be attributed to sampling? Test at the 0.05 level. Computed z = -0.37.

Answer 

    

Cut   back production

   

Do not cut back production

   

Cannot determine based on information given

   

None of these

21. Which symbol is a test statistic used to test a hypothesis about a population mean?

Answer 

    

α

   

β

   

μ

   

z

     

22. The number of trials and the population proportion are respectively represented by what symbols?

Answer 

    

p and n

   

z and t

   

n and   π

     

23. If we do not reject the null hypothesis based on sample evidence, we have proven beyond doubt that the null hypothesis is true.

Answer 

True
False

24. If the null hypothesis is true and the researchers do not reject it, then a correct decision has been made.

Answer 

True
False

25 . What is the probability of making a Type II error if the null hypothesis is actually true?

Answer 

    

α

   

1

   

0

   

0.05