First Midterm

ECO 4000, Baruch College

Spring 2018
Instructions: There is a total of 20 questions. Mark all your answers clearly on the
scantron. No points will be given for work on the scratch paper or the exam paper. Make
sure you answer all questions.
A random sample of 25 trucks travel on the highway with an average speed of 65mph and
variance of 100mph. (Q1-Q3)
1. If you wanted to estimate a 99% confidence interval of the same mean, which distribution
would you use?
a. t-distribution
b. z-distribution
c. Normal distribution
d. F-distribution

2. The standard error of the mean is:

a. 1
b. 2
c. 0.25
d. None of the above

3. The confidence interval is:

a. [59.43, 70.57]
b. [59.41 ,70.59]
c. [59.45, 70.55]
d. [59.47, 70.53]

Suppose in a sample of 64 students the average grade in the statistics exam was 50, the
standard deviation was 16. After a couple of tutoring sessions, the instructor believes the
students’ true exam mean should be about 54. However he doubts that results, hence he
wants to conduct a statistical test to see if the true mean is different than 54: (Q4-Q6)
4. What is the correct H0 and HA of the problem above?
a. H0: μ=54 , HA: μ<54
b. H0 : μ =54 , HA: μ≠54
c. H0 : μ≠54 , HA: μ<54
d. H0: μ≠54 , HA: μ>54
5. The test statistic of the test above is:
a. -4
b. -3
c. -2
d. -1

6. What is the result of the hypothesis test above at alpha=5%?

a. Do not Reject the Null
b. Reject the Null
c. Not enough information to answer this question
d. None of the above

Below are the data on MPG for automatic and manual cars, and we are trying to test if the
MPG Manual is higher than MPG automatic: (Q7-Q13)

𝑆2 𝑆22
Hint: SE formula is 𝑆𝐸 = √𝑁1
1
+ 𝑁2

Hint: Use 25 degrees of freedom for this test

City, MPG Automatic City, MPG Manual

Mean: 16.12 Mean: 19.85
SD: 3.58 SD: 4.51
N1: 26 N2: 26

7. The null hypothesis for this test is:

a. H0: μmanual is double μautomatic
b. H0: μmanual greater than or equal to μautomatic
c. H0: μmanual less than or equal to μautomatic
d. H0: μmanual is different μautomatic

8. The alternative hypothesis for this test is:

a. H0: μmanual greater than μautomatic
b. H0: μmanual is different μautomatic
c. H0: μmanual is double μautomatic
d. H0: μmanual less than μautomatic

9. The sample test statistic for this data is:

a. t = -3.303
b. z = -3.256
c. t = 3.303
d. z = 3.256
10. What is the p-value of this test:
a. p-value between 0.005 and 0.001
b. p-value between 0.01 and 0.002
c. p-value between 0.01 and 0.005
d. p-value between 0.001 and 0.0005

11. What is the t-critical value associated with this test at α=1%:
a. t-critical = 2.479
b. t-critical =2.485
c. t-critical = 2.787
d. t-critical = 2.779

12. At α=1%, what would you conclude about this test:

a. Reject the null and conclude that manual cars have lower MPG than automatic cars
b. Reject the null and conclude that manual cars have higher MPG than automatic cars
c. Can’t decide from this test
d. Accept the null hypothesis

13. Does the p-value and t-critical approach give the same result of the test:
a. Yes, because theoretically they should give the same answer
b. No, because of small sample bias
c. Yes, because t-critical is equal to p-value
d. No, because of non-independent observations

𝑋−𝜇
14. Consider the transformation, 𝑦 = . Then the expected value and standard deviation of
𝜎
y are:
𝜇
a. 𝜎 and σ
b. Cannot be computed because Y is not a linear function of X
c. 1 and 1
d. 0 and 1

15. A large p-value implies:

a. A large Y-bar
b. A large t-statistic
c. Rejection of the null hypothesis
d. A small t-statistic
Consider the following contingency table. The next 5 questions are based on this table:
Rain (X=0) No Rain (X=1)
Long Commute (Y=0) 0.73 0.08
Short Commute (Y=1) 0.02 0.17

16. What is the length of the commute on average regardless if it rains or not:
a. 0.75
b. 0.73
c. 0.02
d. 0.19

17. What is the length of the commute on average given that it rains:
a. 0.027
b. 0.025
c. 0.019
d. 0.022

18. What is the probability of a long commute given that it rains:

a. 0.975
b. 0.973
c. 0.981
d. 0.978

19. What is the expected value of X?

a. 0.25
b. 0.75
c. 0.81
d. 0.19

20. What is the variance of X?

a. 0.154
b. 0.188
c. 0.180
d. 0.175
Solutions

1. A
2. B
3. B
4. B
5. C
6. B
7. C
8. A
9. C
10. A
11. B
12. B
13. A
14. D
15. D
16. D
17. A
18. B
19. A
20. B