IDS 570 Homework 8

Due Tuesday, Nov 5 1. 7.46 Executives learn Spanish. Page 448 The table below gives the pretest and posttest scores on the MLA listening test in Spanish for 20 executives who received intensive training in Spanish. The setting is identical to the one described in Example 7.7.

(a) We hope to show that the training improves listening skills. State an appropriate H0 and Ha . Describe in words the parameters that appear in your hypotheses. (b) Make a graphical check for outliers or strong skewness in the data that you will use in your statistical test, and report your conclusions on the validity of the test. (c) Carry out a test. Can you reject H0 at the 5% signicance level? At the 1% signicance level? (d) Give a 90% condence interval for the mean increase in listening score due to the intensive training. 2. 7.92 Compare two marketing strategies. Page 471 A bank compares two proposals to increase the amount that its credit card customers charge on their cards. (The bank earns a percentage of the amount charged, paid by the stores that accept the card.) Proposal A oers to eliminate the annual fee for customers who charge $4000 or more during the year. Proposal B oers a small percent of the total amount charged as a cash rebate at the end of the year. The bank oers each proposal to an SRS of 150 of its existing credit card customers. At the end of the year, the total amount charged by each customer is recorded. Here are the summary statistics:

(a) Do the data show a signicant dierence between the mean amounts charged by customers oered the two plans? Give the null and alternative hypotheses, and calculate the two-sample t statistic. Obtain the P-value (either approximately from Table D or more accurately from software). State your practical conclusions. 1

(b) The distributions of amounts charged are skewed to the right, but outliers are prevented by the limits that the bank imposes on credit balances. Do you think that skewness threatens the validity of the test that you used in (a)? Explain your answer. 3. 7.79 Eect of storage on a product. Page 469 Does bread lose vitamins when stored? Researchers prepared loaves of bread with our fortied with a known amount of vitamins. After baking, they measured the vitamin C content of two loaves. Another two loaves were baked at the same time, stored for three days, and then the vitamin C content was measured. The units are milligrams of vitamin C per hundred grams of our (mg/100 g). Here are the data:

(a) Does bread lose vitamin C when it is stored for three days? Use a two-sample t test to answer this question. (State the hypotheses, give the test statistic, degrees of freedom, and P-value, and state your conclusion in nontechnical language.) (b) Give a 90% condence interval for the amount of vitamin C lost. 4. 7.97 The advantage of pooling. Page 472 The analysis of the loss of vitamin C when bread is stored (Exercise 7.79, page 469) is a rather extreme case. There are only two observations per condition (immediately after baking and three days later). When the samples are so small, we have very little information to make a judgment about whether the population standard deviations are equal. The potential gain from pooling is large when the sample sizes are very small. Assume that we will perform a two-sided test using the 5% signicance level. (a) Find the critical value for the unpooled t test statistic that does not assume equal variances. (b) Find the critical value for the pooled t test statistic. (c) How does comparing these critical values show an advantage of the pooled test? 5. 7.98 The advantage of pooling. Page 472 Suppose that in the setting of the previous exercise you are interested in 95% condence intervals for the dierence rather than signicance testing. Find the widths of the intervals for the two procedures (assuming or not assuming equal standard deviations). How do they compare?