1.

The international Labour Organization and other research institutions monitor global

employment trends. Estimates suggest nearly 2,500 million people participated in the

global non-domestic labour force in the mid-1990s across the industrial, service, and

agricultural sectors. It was claimed that in 2006, the service sector’s share of global

employment overtook agriculture for the first time in history, with a share of 40 percent,

compared to a level of 39% for agriculture. The majority of workers in industry and

services were wage and salary earners-58% of the industrial workforce and 65% of the

services workforce. (The remainder were self-employed or in family labour). About 40%

of the global workforce were wage and salary earners. The following questions are based

on these figures.

a. Construct a contingency table to present this information

Sector % of workforce % of Wage earners % of Non-wage
in relation to total earners in relation
workforce to total workforce
Industrial 21 12.18 8.82
Service 40 26 14
Agricultural 39 15.6 23.4
Total 100 53.78 46.22

b. What is the probability that a randomly selected agricultural worker in 2006 did not
earn a wage or salary?
23.4% of agricultural workers are non-wage earners. Agricultural workers=39%.
Therefore P( agricultural worker did not earn a salary)=23.4/39
=0.6

c. What is the chance that 5 randomly selected workers in 2006 were all in the industry?
There 21% of workers in industry. Assuming that we are using a sample of 100
21 20 19 18 17
workers, P(5 workers were all in industry)=100 × 99 × 98 × 97 × 96
=2441880/9034502400
=0.00027
d. Discuss, using probability rule, whether being a wage and salary earner is statistically
independent of employment sector?
To prove that A and B are independent, then P(A and B)=P(A/B)×P(B)=P(A)×P(B)
 In this case P(wage earner and industrial) should be equal to P(wage earner given
industrial)×P(industrial) which should be equal to P(wage earner)×P(industrial)
P(wage earner and industrial)=12.18/100
=0.1218
P(Wage earner)=53.78/100
=0.5378
P(Industrial)=21/100
=0.21
P(Wage earner GIVEN industrial)=12.18/21
=0.61
P(A/B)×P(B)=0.61×0.21
=0.1281
P(A)×P(B)=0.5378×0.21
=0.1129
For this case, P(A and B) is not equal to P(A/B)×P(B) which is not equal to
P(A)×P(B). As such, being a wage earner is not independent of employment sector.
2. A pharmacy has 5 wheelchairs which it rents out to customers at a flat rate of $ 15 per
week. Due to increased demand it is considering purchasing more wheelchairs. Data is
collected on the number of wheelchairs rented out each week, as summarized below.

Number hired 0 1 2 3 4 5
Proportion of weeks 0.02 0.08 0.15 0.25 0.35 0.15

a) Describe the shape of this probability distribution and use it to comment on

whether you think the pharmacy should purchase another wheelchair for its rental
service

Proportion of weeks
Proportion of weeks

4, 0.35

3, 0.25

2, 0.15 5, 0.15

1, 0.08
0, 0.02
0 1 2 3 4 5 6
 The shape of the probability distribution is skewed to the left. This implies that
the number of weeks where a higher number of wheelchairs is hired is higher as
compared to when a lower of wheelbarrows is hired. As such, the pharmacy
should purchase another wheelbarrow for its rental service.
b) Calculate the expected rental income to the pharmacy from the hire of
wheelchairs each week, and the associated standard deviation
Distribution mean (expected value)
X P(X=x) x.P(X=x)
0 0.02 0
1 0.08 0.08
2 0.15 0.3
3 0.25 0.75
4 0.35 1.4
5 0.15 0.75
3.28
Mean of wheelchairs hired per week=3.28
The expected rental income each week =3.28×15
=$49.2
Standard deviation
X P(X=x) x.P(X=x) (x-u)^2.P(X=x)
0 0.02 0 0.2152
1 0.08 0.08 0.4159
2 0.15 0.3 0.2458
3 0.25 0.75 0.0196
4 0.35 1.4 0.5734
5 0.15 0.75 0.3420
1.8119

Variance=1.8119
Standard deviation =√1.8119
1.346
c) Specify the distribution of the number of weeks in which more than 2 wheelchairs
are rented out by the pharmacy per year and state any necessary assumptions.
Let X be the number of weeks
So X-Normal (3.28, 1.346)

We need P(X˃2)
𝑋−3.28 2−3.28
P(X˃2)=𝑃( ˃ )
1.346 1.346
P(Z˃-0.95)=1-P(Z˂-0.95)
 1-0.1711
=0.8289
The distribution of the number of weeks in which more than 2 wheelchairs are
rented is 0.8289.
The assumption is that the weeks are normally distributed.

d) Use Excel to find the probability that more than 2 wheelchairs would be rented for
a period of less than 40 weeks per year.

= 0.170811

e) Which normal distribution should be used to best approximate you answer in (d)?
Binomial distribution
3. For a cork testing procedure, the force required to extract corks from 20 standard wine
bottles were measured. The data, in Newtons (N) are recorded in the file Corks.csv.
a. Use Excel’s confidence level to determine a 99% confidence interval for the mean
of this distribution
99% CI is 295.65+/-17.3427
b. What sampling distribution and critical value was used in calculating this
interval?
Sampling distribution=normal
Critical value=2.58
c. What assumptions do you need to make in calculating the confidence interval?
Discuss their validity, making reference to the boxplot.
The assumptions you make in calculating the confidence interval are:
 Data is from a random sample from a large population
 Observations in the sample are independent of each other
 Population distribution is normal

In this case, the assumptions are valid because from the boxplot, it can be seen
that the data distribution is normal.

d. A cork manufacturer expects that the average extraction force that wine corks
would need to withstand is less than 320N. Does the data support this? Give
reasons.
Yes. The data supports this. The average of the data is 295.65N which is less than
320N. In addition, 99% CI is 99% CI is 295.65+/-17.3427. This implies that 99%
of the values lie within a range of 295.65+/-17.3427 which is less 320N
 e. Estimate the proportion of the data that lies outside the confidence interval. Is this
expected? Discuss in the light of your knowledge of sampling distribution
The range is 278.31 to 312.99
From the data, the 10 values lie outside this range. The proportion of data that lies
outside confidence interval 10/30
=0.33. This is not expected since 99% CI implies that there is a 99% confidence
that the provided data lies within the provided interval. However, this could be
due the assumption that the data is normally distributed, which is likely not the
case in this scenario.
4. The scores on a psychological test for aggression range from 8 to 32 with higher values
indicating larger normative beliefs about the acceptability of aggression. The test scores
in a particular population are normally distributed with mean of 11.49 and standard
deviation of 4.04.
a. What proportion of this population would score between 10 and 20 on this test?
P(10˂Z˂20)
10−11.49 20−11.49
=𝑃( ˂𝑍˂ )
4.04 4.04
=P(-0.37˂Z˂2.11)
=P(Z˂2.11)-P(Z˂-0.369)
=0.9826-0.3557
=0.6269
Proportion of the population that would score between 10 and 20 is 0.6269
b. A score in the top 14% on this test is indicative of abnormally high levels of
aggressive behaviour and results in referral behaviour management programmes. For
what scores on this test would such a referral be given?
Let the scores be U
𝑈−11.49
P(X˃U)=𝑃(𝑍˂ )
4.04
𝑈−11.49
0.14= 𝑃(𝑍˂ )
4.04
𝑈−11.49
0.14=1- 𝑃(𝑍˂ 4.04
)
𝑈−11.49
= 𝑃(𝑍˂ )=P(Z˂-1.08)
4.04
𝑈−11.49
= =-1.08
4.04
=U-11.49=-4.36
U=7.13
=32-7.13
=24.87
Therefore scores above 24.87 would qualify for referral
c. For a random sample of 38 members of this population, what is the chance that the
average score on this test would be more than 13?
We want P(X͌˃13)
 Standard deviation=4.04
Standard error for the sample=4.04/√38
=0.655
By CLT X᷃-N(11.49,0.1063)
13−11.49
P(X᷃˃13)=P(𝑍˃ )
0.655
=P(Z˃2.31)
=1-P(Z˂2.31)
=1-0.9896
=0.0304
Chance that the average score would be 12 is 0.0304
5. A large mechanical service company wants to implement a new method of servicing
clients’ equipment which involves regular preventive maintenance. Currently, the
company responds to problems as they occur. A trial is carried out in which a random
sample of existing clients is offered this new preventive maintenance service. After nine
months the clients are surveyed, with 118 out 223 surveyed clients indicating they want
to remain with the new service.
a. Calculate a 90% confidence interval for the proportion of clients expected to prefer
this new service method. Provide meaningful interpretation of this interval
pˆ (1  pˆ )
pˆ  k SE  pˆ  k
n
118/223
=0.53 ±1.645SE=0.53 ±1.645√(0.53×0.47)/223
=0.53 ±0.0334
Therefore, 90%CI for the proportion of clients expected to prefer the new service
method=0.53 ±0.0334
b. The service manager reckons the survey indicates a clear customer preference for the
new method. Assess this view using the confidence interval calculated in a.
The confidence interval supports the service manager’s view. A confidence interval
of 0.53 ±0.0334 implies that majority of customers prefer the new method.
c. The company decides to adopt a new logo design if more than 65% of its customers
would approve of the change. It randomly surveys 260 customers. Will this sample
size ensure that the estimate of the approval rating for the new logo will be within
0.06 of the true proportion at a 95% confidence level? Justify your answer.
2
z
n    p 1  p 
e

260≥(1.96/0.06)^2×0.6×0.4

260≥256.15
From 260≥256.15, it can be seen that the sample size will ensure that the estimate of the
approval rating for the new logo will be within 0.06.