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Great Lakes Institute of Management(PGPM 2011-2012) Mid-Term Exam: Time 60 Minutes Statistical Methods for Decision Making Answer as many questions as possible Faculty: P.K. Viswanathan

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Researchers are concerned that the weight of the average American school child is increasing implying, among other things, that children's clothing should be manufactured and marketed in larger sizes. If X is the weight of school children sampled in a nationwide study, then X is an example of A) a categorical random variable. B) a parameter. C) a discrete random variable. D) a continuous random ...view middle of the document...

B) 1 - . 1)

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C) .

D) 1 - .

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7) Suppose a 95% confidence interval for µ has been constructed. If it is decided to take a larger sample and to decrease the confidence level of the interval, then the resulting interval width would __________. (Assume that the sample statistics gathered would not change very much for the new sample.) A) be the same as the current interval width B) be narrower than the current interval width C) be unknown until actual sample sizes and reliability levels were determined D) be larger than the current interval width 8) A Type II error is committed when A) we don't reject a null hypothesis that is true. B) we don't reject a null hypothesis that is false. C) we reject a null hypothesis that is false. D) we reject a null hypothesis that is true. 9) A Type I error is committed when A) we don't reject a null hypothesis that is true. B) we reject a null hypothesis that is true. C) we reject a null hypothesis that is false. D) we don't reject a null hypothesis that is false. 10) Which of the following would be an appropriate null hypothesis? A) The mean of a population is equal to 55. B) The mean of a sample is equal to 55. C) The mean of a population is greater than 55. D) Only A and C are true. 11) The power of a test is measured by its capability of A) not rejecting a null hypothesis that is true. B) rejecting a null hypothesis that is true. C) not rejecting a null hypothesis that is false. D) rejecting a null hypothesis that is false. 12) How many Kleenex should the Kimberly Clark Corporation package of tissues contain? Researchers determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of 100 Kleenex users yielded the following data on the number of tissues

used during a cold: X = 52, s = 22. Give the null and alternative hypotheses to determine if the number of tissues used during a cold is less than 60.

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A) H0 : X = 52 and H1 : X 52. C) H0 : µ

60 and H1 : µ > 60.

B) H0 : X 60 and H1 : X < 60. D) H0 : µ

60 and H1 : µ < 60.

2

TABLE 2-1 An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance. A representative from a local insurance agency selected a random sample of insured drivers and recorded, X, the number of claims each made in the last 3 years, with the following results. X 1 2 3 4 5 f 14 18 12 5 1

13) Referring to Table 2-1, how many total claims are represented in the sample? A) 50 B) 111 C) 250

D) 15

13)

14) A type of vertical bar chart in which the categories are plotted in the descending rank order of the magnitude of their frequencies is called a A) dot plot. B) pie chart. C) Pareto diagram. D) contingency table. 15) If an economist wishes to determine whether there is evidence that average family income in a community equals $25,000 A) a two-tailed test should be utilized. B)...

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