Question 1

a. Confidence interval represents how often the true percentage of the population who
would pick an answer lies within the interval and is expressed as a percentage.
The 95% confidence level means you can be 95%certain; the 99% confidence level
means you can be 99% certain.
b. Type I error involves the rejection of a null hypothesis that is actually true and is
equivalent to a false positive.
Type II error occurs when we do not reject a null hypothesis that is false and is
equivalent to a false negative.
Question 2
Point estimate = 1 =

Confidence interval =

x
n

= 22

x t /2

22 1.729 (1.1191/ 4.4721)

21.5673 to 22.4327

Question 3
n=80 ,
a.

x =$ 119,155 , =$ 30,000

x z 0.05

< < x + z 0.05

n
n

119,155( 1.28 )

30,000
< <119,155+(1.28)(
)
( 30,000
)
80
80

$114,861.7 < < $123,448.3

b.

x z 0.025

119,155( 1.64 )

< < x + z 0.025

n
n
30,000
< <119,155 +(1.64)(
)
( 30,000
)
80
80

$113,654.3 < < $124,655.7

c.

x z 0.005

< < x + z 0.005

n
n

119,155( 2.33 )

30,000
< <119,155+(2.33)(
)
( 30,000
)
80
80

$111,339.9 < < $126,970.1

d. As the confidence level increases the width of the confidence interval increases.
The result is reasonable. In order to be confident that our interval actually contains the
population mean we have to increase the interval (be less precise).since we are using a
small portion of the population (sample) we cannot be very sure of the population
mean, so the higher our confidence in the calculated interval the larger the interval.
Question 4
a.

x
Pont estimate ( ^p = n
^p=

29
=0.4677
162

b.
E=z /2

E 1.96

pq
n
0.6420 X 0.3580
162
0.0738

Confidence interval
^p E
0.6420 0.0738

0.5682 < p < 0.7158

c.

Z 2
n=pq ( )
E
n = 0.6420 0.3580 (1.645/0.738)
n = 114

Question 5
a. H0: 3173
HA: > 3173
b. Z = ((3325 - 3173)/1000) sqrt(180)
=2.04
P = 1-z

P = 0.0207
c. Reject H0 since p value is <=.05. Credit card balance has increased.
30 + 1.64 5Sqrt40
Question 6
a. HO: 1 - 2 < 0
HA: 1 - 2 > 0
b. Point estimate between the means = 1 - 2
x
1 =
=525 (University Grads)
n
2 =

x
n

=487

(High School Grads)

1 - 2 = 38
t test =
c.

x 1x 2

s 2p s2p
+
n1 n2
2

s1 ( n11 ) + s 2( n21)
But s =
n1 +n2 2
2
p

59.4205 ( 161 )+ 51.7476(121)

16+ 122

= 56.1743
Tstat = 38/ 56.17
0.676466

Question 7

Colour
Brown
Yellow
Red
Orange
Green
Blue

Hypothesize
d
Proportion O
E
30%
177
151.8
20%
135
101.2
20%
79
101.2
10%
41
50.6
10%
36
50.6
10%
38
50.6

O-E
25.200
33.800
-22.200
-9.600
-14.600
-12.600

(O - E) / E
4.183
11.289
4.870
1.821
4.213
3.138

Total =

506

506.0

0.000

29.514

HO: PBr = 0.3, PY = 0.2, PO = 0.1, PG = 0.1, PBl = 0.1

HA: PBr 0.3, PY 0.2, PO 0.1, PG 0.1, PBl 0.1
At 0.05 chi square = 29.514
df = 5, p-value = 1.8382 10-5
1.8382 10-5 <0.05, reject HO
Question 8
In this question n = 5, xy =13524, x = 300, x2 = 18480, y = 215, y2 = 10365,
x =60 , y =43
a.
b 1=

xyn x y
x 2n x 2

b1 = (13524- 560 43)/(18480 - 536400))= -0.00382

bo =

y b 1 x

bo = 43 (-0.00832 x 60)= 43.2290

SSE =
MSE =

( y ^y )2
SSE
n2

= 1124.769

= 1124.769/3 = 374.9231

b. Standard error = MSE = 19.3629

standard error
c. Standard deviation =
(xx )2

d.

t=

= 19.3629/21.9081 = 0.8838

b
b
=
s b estimated standard deviation =-0.00382/0.8838 =-0.00432

P value from t table =0.9968 (not sigmnificant)

e. ANOVA
Source

df

Sum of Squares

Mean Squares

F value

p-value

Model

yi y
(
)2=SSModel

SSM = MSM

MSR/MSE =
F1,n2

Pr(F > F1,

n2*)

Residual

n2

ei2 = SSResidual

SSR/( n 2) =
MSE

Total

n 1

y
(yi )2=
SSTotal

SST/( n
1)=MST

Source
Model
Residual
Total

df
1
3
4

SS
0.00699
1124.796
1120

MS
0.00699
374.9231
280

F
0.007909

p
10.1280