Exam
Name___________________________________
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) A point estimate is equally likely to be higher or lower than the population mean if the sampling is 1)
done using a statistical sampling procedure.
2) A point estimate is an unbiased estimator of the true population value. However, error is associated 2)
with this estimate.
3) A point estimate for a population mean lies exactly halfway between the outer and lower limits of 3)
its confidence interval estimate.
4) The higher the level of confidence, the wider the confidence interval must be. 4)
5) In a situation where we know the population standard deviation but wish to estimate the 5)
population mean using a 90 percent confidence interval, the critical value is z 1.645.
6) The margin of error is one half the width of the confidence interval. 6)
7) Recently, a marketing research company reported that based on a random sample of 300 7)
households the mean number of trips to a major shopping mall per month per household is 4.12
trips. This value is referred to as a parameter and is subject to sampling error.
8) When developing a confidence interval estimate, the confidence level is calculated based on the 8)
size of the sample and the population standard deviation.
9) One way to reduce the margin of error in a confidence interval estimate is to lower the level of 9)
confidence.
10) If we are interested in estimating the population mean based on a sample from a population for 10)
which we know neither the mean nor the standard deviation, the critical value will be a t value
from the t distribution.
11) When calculating a confidence interval, the reason for using the t distribution rather than the 11)
normal distribution for the critical value is that the population standard deviation is unknown.
12) The bottlers of a new fruit juice daily select a random sample of 12 bottles of the drink to estimate 12)
the mean quantity of juice in the bottles filled that day. On one such day, the following results were
observed: x 12.03; s 0.12. Based on this information, the upper limit for a 95 percent confidence
interval estimate is approximately 12.106 ounces.
13) The bottlers of a new fruit juice daily select a random sample of 12 bottles of the drink to estimate 13)
the mean quantity of juice in the bottles filled that day. On one such day, the following results were
observed: x 12.03; s 0.12. Based on this information, the margin of error associated with a 90
percent confidence interval estimate for the population mean is 1.7959 ounces.
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14) In estimating a population mean, a large sample size is generally preferable to a small sample size 14)
because the margin of error is generally smaller.
15) The national sales manager for a textbook publishing company wishes to estimate the mean 15)
number of books sold per college. She wishes to have her estimate be within 30 copies and wants
a 95 percent confidence interval estimate. If a pilot sample of 30 schools gave a sample standard
deviation equal to 60 books, the required total sample size is less than the pilot sample already
taken.
16) In an effort to estimate the mean length of stay for motel guests at a major national motel chain, the 16)
decision makers asked for a 95 percent confidence, and a margin of error of 0.25 days. Further, it
was known that the population standard deviation is 0.50 days. Given this, the required sample
size to estimate the mean length of stay is about 16 customers.
17) The manager in charge of concessions at an NFL football stadium is interested in estimating the 17)
mean dollars that are spent per person attending the games. A pilot sample of n 50 people has
revealed a sample mean and standard deviation of $12.35 and $2.35 respectively. He wishes to
estimate the population mean within $0.20 of the true mean and wishes to have a confidence level
of 95 percent. Given this, he needs to sample an additional 481 people.
18) In estimating a population proportion, the factors that are needed to determine the required sample 18)
size are the confidence level, the margin of error and some idea of what the population proportion
is.
19) The procurement manager for a large company wishes to estimate the proportion of parts from a 19)
supplier that are defective. She has selected a random sample of n 200 incoming parts and has
found 11 to be defective. Based on a 95 percent confidence level, the upper and lower limits for the
confidence interval estimate are approximately 0.0234 to 0.0866.
20) A publisher is interested in estimating the proportion of textbooks that students resell at the end of 20)
the semester. He is interested in making this estimate using a confidence level of 95 percent and a
margin of error of 0.02. Based upon his prior experience, he believes that is somewhere around
0.60. Given this information, the required sample size is over 2,300 students.
21) When determining sample size for a proportion, the farther that p is from 0.5, the smaller the 21)
resulting sample size will be.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
22) Which of the following statements applies to a point estimate? 22)
A) The point estimate will tend to be accurate if the sample size exceeds 30 for non normal
populations.
B) The point estimate is needed to determine the required sample size when estimating the
population mean.
C) The point estimate is subject to sampling error and will almost always be different from the
population value.
D) The point estimate is a parameter.
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23) Sampling error occurs when: 23)
A) a random sample is used rather than a convenience sample.
B) a nonstatistical sample is used.
C) a confidence interval is used to estimate a population value rather than a point estimate.
D) the statistic computed from the sample is not equal to the parameter for the population.
24) The general format for a confidence interval is: 24)
A) point estimate (critical value)(standard deviation)
B) point estimate (critical value)(standard error).
C) margin of error (confidence coefficient) (standard error).
D) point estimate z (standard deviation).
25) In developing a confidence interval estimate for the population mean, which of the following is 25)
true?
A) The larger the sample standard deviation, the wider will be the interval estimate, all other
things being equal.
B) The confidence interval developed from a smaller sample size will have a larger margin of
error than one obtained using a larger sample size, all other things being equal.
C) If the population standard deviation is unknown, the appropriate critical value should be
obtained from the t distribution.
D) All of the above are true.
26) In an effort to estimate the mean dollars spent per visit by customers of a food store, the manager 26)
has selected a random sample of 100 cash register receipts. The mean of these was $45.67 with a
sample standard deviation equal to $12.30. Assuming that he wants to develop a 90 percent
confidence interval estimate, the upper limit of the confidence interval estimate is:
A) about $47.69 B) about $2.02
C) approximately $65.90 D) None of the above
27) The margin of error is: 27)
A) the critical value multiplied by the standard error of the sampling distribution.
B) the largest possible sampling error at a specified level of confidence.
C) Both A and B
D) the difference between the point estimate and the parameter.
28) Which of the following statements is true with respect to the t distribution? 28)
A) The t distribution is more spread out than the standard normal distribution.
B) The t distribution is symmetrical.
C) The exact shape of the t distribution depends on the number of degrees of freedom.
D) All of the above are true.
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29) An educational organization in California is interested in estimating the mean number of minutes 29)
per day that children between the age of 6 and 18 spend watching television per day. A previous
study showed that the population standard deviation was 21.5 minutes. The organization selected a
random sample of n 200 children between the age of 6 and 18 and recorded the number of
minutes of TV that each person watched on a particular day. The mean time was 191.3 minutes. If
the leaders of the organization wish to develop an interval estimate with 98 percent confidence,
what would be the upper and lower limits of the interval estimate?
A) Approximately 187.76 minutes 194.84 minutes
B) Approximately 188.3 minutes 194.3 minutes
C) About 141.21 minutes 241.40 minutes
D) None of the above
30) An educational organization in California is interested in estimating the mean number of minutes 30)
per day that children between the age of 6 and 18 spend watching television per day. A previous
study showed that the population standard deviation was 21.5 minutes. The organization selected a
random sample of n 200 children between the age of 6 and 18 and recorded the number of
minutes of TV that each person watched on a particular day. The mean time was 191.3 minutes. If
the leaders of the organization wish to develop an interval estimate with 95 percent confidence,
what will the margin of error be?
A) Approximately 1.52 minutes B) Approximately 42.14 minutes
C) z 1.96 D) About 2.98 minutes
31) A study was recently conducted to estimate the mean cholesterol for adult males over the age of 55 years.
31)
The following random sample data were observed:
245 304 135 202 300
196 210 188 256 390
Given this information, what is the point estimate for the population mean?
A) 102
B) About 242.6
C) About 73.35
D) Can't be determined without knowing the confidence level.
32) A major tire manufacturer wishes to estimate the mean tread life in miles for one of its tires. It 32)
wishes to develop a confidence interval estimate that would have a maximum sampling error of
500 miles with 90 percent confidence. A pilot sample of n 50 tires showed a sample standard
deviation equal to 4,000 miles. Based on this information, the required sample size is:
A) 246. B) 124. C) 174. D) 196.
33) In order to reduce the cost of a study, a marketing manager wants to reduce the sample size for a 33)
study of customer response to a recent advertising campaign. What can she do that would lead to a
reduction in sample size?
A) Reduce the level of confidence
B) Allow a higher margin of error
C) Somehow reduce the variation in the population
D) All of the above
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34) A cell phone service provider has selected a random sample of 20 of its customers in an effort to 34)
estimate the mean number of minutes used per day. The results of the sample included a sample
mean of 34.5 minutes and a sample standard deviation equal to 11.5 minutes. Based on this
information, and using a 95 percent confidence level:
A) the critical value is z 1.645
B) the critical value is z 1.96
C) the critical value is t 2.093
D) The critical value can't be determined without knowing the margin of error.
35) A random sample of 121 automobiles traveling on an interstate showed an average speed of 65 35)
mph. From past information, it is known that the standard deviation of the population is 22 mph.
The 95 percent confidence interval for µ is determined as (61.08, 68.92). If we are to reduce the
sample size to 100 (other factors remain unchanged), the 95 percent confidence interval for µ
would:
A) become narrower. B) become wider.
C) be the same. D) be impossible to determine.
36) A random sample of 340 people in Chicago showed that 66 listened to WJKT 1450, a radio station 36)
in South Chicago Heights. Based on this sample information, what is the point estimate for the
proportion of people in Chicago that listen to WJKT 1450?
A) 1450 B) 66 C) About 0.194 D) 340
37) The chamber of commerce in a beach resort town wants to estimate the proportion of visitors who 37)
are repeat visitors. From previous experience they believe the portion is in the vicinity of 0.5 and
they want to estimate the proportion to within 0.03 percentage points with 95 percent confidence.
The sample size they should use is:
A) n 545 B) n 95 C) n 1068 D) n 33
38) The chamber of commerce in a beach resort town wants to estimate the proportion of visitors who 38)
are repeat visitors. Suppose that they have estimated that they need a sample size of n 16,577
people to achieve a margin of error of .01 percentage points with 99 percent confidence, but this is
too large a sample size to be practical. How can they reduce the sample size?
A) Use a smaller margin or error B) Use a higher level of confidence
C) Use a lower level of confidence D) Conduct a census
39) Construct a 98% confidence interval estimate for the population mean given the following values: 39)
x 120 20 n 50
A) (117.46, 122.54) B) (113.67, 126.33) C) (113.13, 126.87) D) (113.41, 126.59)
40) Determine the 90% confidence interval estimate for the population mean of a normal distribution 40)
given n 100, 121, and x 1,200.
A) (1186.31, 1213.69) B) (1182.56, 1217.44)
C) (1180.10, 1219.90) D) (1191.12, 1208.88)
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41) Even before the record gas prices during the summer of 2008, an article written by Will Lester of 41)
the Associated Press reported on a poll in which 80% of those surveyed say that Americans who
currently own a SUV (sport utility vehicle) should switch to a more fuel efficient vehicle to ease
America's dependency on foreign oil. This study was conducted by the Pew Research Center for the
People & the Press. As a follow up to this report, a consumer group conducted a study of SUV owners
to estimate the mean mileage for their vehicles. A simple random sample of 91 SUV owners was selected,
and the owners were asked to report their highway mileage. The following results were summarized from
the sample data:
x 18.2 mpg
s 6.3 mpg
Based on these sample data, compute and interpret a 90% confidence interval estimate for the mean
highway mileage for SUVs.
A) (12.4, 24.0) B) (17.6, 18.8) C) (15.4, 21.0) D) (17.1, 19.3)
42) According to USA Today, customers are not settling for automobiles straight off the production 42)
lines. As an example, those who purchase a $355,000 Rolls Royce typically add $25,000 in accessories.
One of the affordable automobiles to receive additions is BMW's Mini Cooper. A sample of 179 recent Mini
purchasers yielded a sample mean of $5,000 above the $20,200 base sticker price. Suppose the cost of
accessories purchased for all Mini Coopers has a standard deviation of $1,500.
Determine the margin of error in estimating the average cost of accessories on Mini Coopers.
A) 231.14 B) 291.11 C) 214.41 D) 219.75
43) An advertising company wishes to estimate the mean household income for all single working 43)
professionals who own a foreign automobile. If the advertising company wants a 90% confidence
interval estimate with a margin of error of $2,500, what sample size is needed if the population
standard deviation is known to be $27,500?
A) 328 B) 251 C) 156 D) 415
44) Suppose a study estimated the population mean for a variable of interest using a 99% confidence 44)
interval. If the width of the estimated confidence interval (the difference between the upper limit
and the lower limit) is 600 and the sample size used in estimating the mean is 1,000, what is the
population standard deviation?
A) 3684.21 B) 5125.11 C) 26711.14 D) 2451.23
45) Compute the 90% confidence interval estimate for the population proportion, p, based on a sample 45)
size of 100 when the sample proportion, p is equal to 0.40.
A) (0.3930, 0.4070) B) (0.3886, 0.4114) C) (0.3194, 0.4806) D) 0.3880, 0.0412)
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46) As the automobile accident rate increases, insurers are forced to increase their premium rates. 46)
Companies such as Allstate have recently been running a campaign they hope will result in fewer
accidents by their policyholders. For each six month period that a customer goes without an
accident, Allstate will reduce the customer's premium rate by a certain percentage. Companies like
Allstate have reason to be concerned about driving habits, based on a survey conducted by Drive
for Life, a safety group sponsored by Volvo of North America, in which 1,100 drivers were
surveyed. Among those surveyed, 74% said that careless or aggressive driving was the biggest
threat on the road. One third of the respondents said that cell phone usage by other drivers was the
driving behavior that annoyed them the most.
Based on these data, assuming that the sample was a simple random sample, construct and interpret a 95%
confidence interval estimate for the true proportion in the population of all drivers who are annoyed by
cell phone users.
A) (0.316, 0.344) B) (0.313, 0.347) C) (0.306, 0.354) D) (0.302, 0.358)
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
47) A financial analyst is interested in estimating the proportion of publicly traded companies on the New York
Stock Exchange that have cash balances that are more than 10 percent of the total assets of the company. A
random sample of n 100 companies shows that 13 had cash balances of more than 10 percent of assets. Based
on this information, develop and interpret a 90 percent confidence interval estimate for the population
proportion.
48) A human resources manager wishes to estimate the proportion of employees in her large company who have
supplemental health insurance. What is the largest size sample she should select if she wants 95 percent
confidence and a margin of error of 0.01?
