STAT212_093_A Page 1 of 4

KING FAHD UNIVERSITY OF PETROLEUM & MINERALS

DEPARTMENT OF MATHEMATICS & STATISTICS
DHAHRAN, SAUDI ARABIA

STAT 212: BUSINESS STATISTICS II

Major Exam 1
10:30 pm –11:30 pm

Name: ID#: Serial:

Question No Full Points Points Obtained

1 10

2 20

3 10

Total 40
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Q1. (10 pts) Multiple Choice

1. If we are performing a two-tailed test of whether  = 100, the probability of detecting

a shift of the mean to 105 will be ________ the probability of detecting a shift of the
mean to 110.
a) less than
b) greater than
c) equal to
d) not comparable to

2. The number of degrees of freedom associated with the t test, when the data are
gathered from a matched pairs experiment with 15 pairs, is:
a) 30 b) 15 c) 28 d) 14

3. A major videocassette rental chain is considering opening a new store in an area that
currently does not have any such stores. The chain will open if there is evidence that
more than 5,000 of the 20,000 households in the area are equipped with videocassette
recorders (VCRs). It conducts a telephone poll of 300 randomly selected households in
the area and finds that 96 have VCRs. The p-value associated with the test statistic in
this problem is approximately equal to:

a) 0.0100
b) 0.0051
c) 0.0026
d) 0.0013

4. Suppose we wish to test H0:   47 versus H1:  > 47. What will result if we
conclude that the mean is greater than 47 when its true value is really 52?

a) We have made a Type I error.

b) We have made a Type II error.
c) We have made a correct decision
d) None of the above are correct.

5. We have created a 95% confidence interval for  with the result (10, 15). What
decision will we make if we test H0 :  16 versus H1 :   16 at  = 0.10?

a) Reject H0 in favor of H1.

b) Accept H0 in favor of H1.
c) Fail to reject H0 in favor of H1.
d) We cannot tell what our decision will be from the information given.
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Q2. (8+12=20 pts) A manufacturer uses two different trucking companies to ship its merchandise.
The manufacturer suspects that one company is charging more than the other and wants to test it. A
random sample of the amounts charged for one truckload shipment from Chicago to Detroit on
various days is collected for each trucking company. The data (I dollars) is given below.
∑X= 28855 , ∑X2=75994975 , ∑Y= 21080 , ∑Y2=50613100
X=Comp1 2570 2480 2870 2975 2660 2380 2590 2550 2485 2585 2710
Y=Comp2 2055 2940 2850 2475 1940 2100 2655 1950 2115
a. Test the assumption of equal variance.

The hypotheses are: H0: s A2  s B2 HA: s A2 �s B2

Decision Rule:
Reject H0 if Fcal >F,8,10
The test statistic:

S22
Fcal  2  5.110542007
S1
Critical values:   0.05
F(8,10,0.025)= 3.8549

conclusion:
Since Fcal > 3.071658 we do reject the null hypothesis.
Based on the samples information, we conclude that the two population variances are not equal.

b. Assuming that the two populations are normally distributed with equal variance, test the
null hypothesis that the two companies’ average charges are equal.

The hypotheses are: H0: 1  2 HA: 1 �2

Decision Rule:
Reject H0 if |Tcal | > t/2,18
sp 
( n1 ) s12 + ( n 2 -1) s 22 
( 11 -1) 174.087232 + ( 9 -1) 393.55043442
The test statistic: n1 + n 2 - 2 11 + 9 - 2
 292.6999973

x1 - x2 - 0 2623.181818 - 2342.222222
Tcal    2.135618875
1 1 1 1
Sp + (292.6999973) +
n1 n2 11 9
Critical values:   0.05 t(18,0.025) 2.101
t(18,0.975) -2.101
conclusion:
Since |Tcal |> 2.101 we reject the null hypothesis.
Based on the samples information, we conclude that the two companies’ average charges are not equal.
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Q3. (10 pts) A maker of toothpaste is interested in testing whether the proportion of adults (over age
18) who use their toothpaste and have no cavities within a six-month period is any different than the
proportion of children (18 and under) who use the toothpaste and have no cavities within a six-month
period. To test this, they have selected a sample of adults and a sample of children randomly from the
population of those customers who use their toothpaste. The following results were observed.
Adults Children
Sample Size 100 200
Number with 0 cavities 83 165
Based on these sample data and using a significance level of 0.05, what conclusion should be reached.

Ho :1   2
(1 pt) The hypotheses are: .
H a :1   2
(1 pts) Decision Rule:
Reject H0 if |Zcal|>Zα/2

( p1 - p2 ) - 0
z
(5 pts) The test statistic: 1 1
p (1 - p )( + )
n1 n 2
x1 + x 2 83 + 165
where p    .8267 and
n1 + n2 100 + 200

x1 83 x 165
p1    .83 and p 2  2   .8250 .
n1 100 n2 200
( p1 - p 2 ) - 0 (.83 - .8250) - 0
z    .1079
test statistic is 1 1 1 1
p (1 - p )( + ) (.8267)(.1733)( + )
n1 n2 100 200

(2 pts) Critical value(s): ±1.96

(1pts) Conclusion: do not reject the null hypothesis and conclude that based on the sample data, there is no basis for
concluding that the proportion of adults with no cavities is any different than the proportion of children with no cavities.