Applied Business Statistics

Exam I Key

1. Compute the population variance of the data: 16,18,23,21,17,16,24,23,9,17,11,16,22,10,15,14.

20.5

2. Container 1 has 8 items, 3 of which are defective. Container 2 has 5 items, 2 of which are defective. If one
item is drawn from each container:
What is the probability that the item from container one is defective and the item from container 2 is not
defective?

.225

3. At a college, 70 percent of the students are women and 50 percent of the students receive a grade of C. 25
percent of the students are neither female nor C students. Use this contingency table.

If the student is male, what is the probability he is a C student?

.1667
4. If events A and B are mutually exclusive, calculate P(A|B).

Zero

5. Joe is considering pursuing an MBA degree. He has applied to two different universities. The acceptance rate
for applicants with similar qualifications is 25% for University A and 40% for University B. What is the
probability that Joe will not be accepted at either university?

0.45
(.75)(.60)=0.45

6. A pharmaceutical company has determined that if a new cholesterol-reducing drug is manufactured

(introduced to the market), the following probability distribution will describe this drug's contribution to the

company's profits during the next six months.

The company management has decided to market this product if the expected contribution to profit for the next
six months is more than $90,000. Based on the information given above, should the company begin
manufacturing the new drug?

No (79,000<90,000)

7. The weight of a product is normally distributed with a mean of four ounces and a variance of .25 "squared
ounces." The company wants to classify the unit as a scrap in a maximum of 1% of the units if the weight is
below a desired value. Determine the desired weight such that no more than 1% of the units are below it.

2.835
8. The weight of a product is normally distributed with a standard deviation of .5 ounces. What should the
average weight be if the production manager wants no more than 5% of the products to weigh more than 5.1
ounces?

4.278

9. Suppose that the waiting time for a license plate renewal at a local office of a state motor vehicle department
has been found to be normally distributed with a mean of 30 minutes and a standard deviation of 8 minutes.
What is the probability that a randomly selected individual will have a waiting time between 15 and 45 minutes

.9398

.9699-.0301=.9398

10. Three candidates run for different offices in different counties. Each has a one in three chance of being
elected in his/her county. What is the probability that at least one of them will be elected?

.7037