Sample Question For Business Statistics

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ANOVA

1. In a one-way ANOVA, if the computed F statistic exceeds the critical F value we may
a) reject H0 since there is evidence all the means differ.
b) reject H0 since there is evidence of a treatment effect.
c) not reject H0 since there is no evidence of a difference.
d) not reject H0 because a mistake has been made.

ANSWER:
b
2. Which of the following components in an ANOVA table are not additive?
a) Sum of squares.
b) Degrees of freedom.
c) Mean squares.
d) It is not possible to tell.

ANSWER:
c
3. A completely randomized design
a) has only one factor with several treatment groups.
b) can have more than one factor, each with several treatment groups.
c) has one factor and one block.
d) has one factor and one block and multiple values.

ANSWER:
a
TYPE: MC DIFFICULTY: Moderate
KEYWORDS: completely randomized design

KEYWORDS: one-way analysis of variance, F test for factor

4. In a one-way ANOVA, the null hypothesis is always


a) there is no treatment effect.
b) there is some treatment effect.
c) all the population means are different.
d) some of the population means are different.
ANSWER:
a
5. In a one-way ANOVA
a) an interaction term is present.
b) an interaction effect can be tested.
c) there is no interaction term.
d) the interaction term has (c – 1)(n – 1) degrees of freedom.

ANSWER:
c
6. Interaction in an experimental design can be tested in
a) a completely randomized model.
b) a randomized block model.
c) a two-factor model.
d) all ANOVA models.

ANSWER:
c

TABLE 11-1

Psychologists have found that people are generally reluctant to transmit bad news to their peers. This
phenomenon has been termed the “MUM effect.” To investigate the cause of the MUM effect, 40
undergraduates at Duke University participated in an experiment. Each subject was asked to
administer an IQ test to another student and then provide the test taker with his or her percentile
score. Unknown to the subject, the test taker was a bogus student who was working with the
researchers. The experimenters manipulated two factors: subject visibility and success of test taker,
each at two levels. Subject visibility was either visible or not visible to the test taker. Success of the
test taker was either top 20% or bottom 20%. Ten subjects were randomly assigned to each of the 2
x 2 = 4 experimental conditions, then the time (in seconds) between the end of the test and the
delivery of the percentile score from the subject to the test taker was measured. (This variable is
called the latency to feedback.) The data were subjected to appropriate analyses with the following
results.

Source df SS MS F PR > F

Subject visibility 1 1380.24 1380.24 4.26 0.043


Test taker success 1 1325.16 1325.16 4.09 0.050
Interaction 1 3385.80 3385.80 10.45 0.002
Error 36 11,664.00324.00
Total 39 17,755.20

7. Referring to Table 11-1, what type of experimental design was employed in this study?
a) Completely randomized design with 4 treatments
b) Randomized block design with four treatments and 10 blocks
c) 2 x 2 factorial design with 10 observations
d) None of the above

ANSWER:
c

8. Referring to Table 11-1, at the 0.01 level, what conclusions can you draw from the analysis?
a) At the 0.01 level, subject visibility and test taker success are significant predictors of
latency feedback.
b) At the 0.01 level, the model is not useful for predicting latency to feedback.
c) At the 0.01 level, there is evidence to indicate that subject visibility and test taker success
interact.
d) At the 0.01 level, there is no evidence of interaction between subject visibility and test
taker success.

ANSWER:
c
9. An airline wants to select a computer software package for its reservation system. Four software
packages (1, 2, 3, and 4) are commercially available. The airline will choose the package that
bumps as few passengers, on the average, as possible during a month. An experiment is set up in
which each package is used to make reservations for 5 randomly selected weeks. (A total of 20
weeks was included in the experiment.) The number of passengers bumped each week is given
below. How should the data be analyzed?
Package 1: 12, 14, 9, 11, 16
Package 2: 2, 4, 7, 3, 1
Package 3: 10, 9, 6, 10, 12
Package 4: 7, 6, 6, 15, 12

a) F test for differences in variances.


b) One-way ANOVA F test.
c) t test for the differences in means.
d) t test for the mean difference.

ANSWER:
b

10. Referring to Table 11-1, in the context of this study, interpret the statement: “Subject visibility
and test taker success interact.”
a) The difference between the mean feedback time for visible and nonvisible subjects
depends on the success of the test taker.
b) The difference between the mean feedback time for test takers scoring in the top 20% and
bottom 20% depends on the visibility of the subject.
c) The relationship between feedback time and subject visibility depends on the success of
the test taker.
d) All of the above are correct interpretations.

ANSWER:
d

CHI-SQUARE TES
1. When testing for independence in a contingency table with 3 rows and 4 columns, there are
________ degrees of freedom.
a) 5
b) 6
c) 7
d) 12

ANSWER:
b

2. If we use the  method of analysis to test for the differences among 4 proportions, the degrees
2

of freedom are equal to:


a) 3
b) 4
c) 5
d) 1

ANSWER:
a

3. If we wish to determine whether there is evidence that the proportion of items of interest is the
same in group 1 as in group 2, the appropriate test to use is
a) the Z test.
b) the  test.
2

c) Both a) and b).


d) Neither of a) nor b).

ANSWER:
c
4. In testing a hypothesis using the  test, the theoretical frequencies are based on the
2

a) null hypothesis.
b) alternative hypothesis.
c) normal distribution.
d) None of the above.

ANSWER:
a
TABLE 12-1

A study published in the American Journal of Public Health was conducted to determine whether the
use of seat belts in motor vehicles depends on ethnic status in San Diego County. A sample of 792
children treated for injuries sustained from motor vehicle accidents was obtained, and each child was
classified according to (1) ethnic status (Hispanic or non-Hispanic) and (2) seat belt usage (worn or
not worn) during the accident. The number of children in each category is given in the table below.

Hispanic Non-Hispanic

Seat belts worn 31 148


Seat belts not worn 283 330

5. Referring to Table 12-1, which test would be used to properly analyze the data in this
experiment?
a)  2 test for independence
b)  test for differences among more than two proportions
2

c) Wilcoxon rank sum test for independent populations


d) Wilcoxon signed ranks test for two related populations

ANSWER:
a
6. Referring to Table 12-1, the calculated test statistic is
a) -0.9991
b) -0.1368
c) 48.1849
d) 72.8063

ANSWER:
c

7. Referring to Table 12-1, at 5% level of significance, the critical value of the test statistic is
a) 3.8415
b) 5.9914
c) 9.4877
d) 13.2767

ANSWER:
a

8. Referring to Table 12-1, at 5% level of significance, there is sufficient evidence to conclude that
a) use of seat belts in motor vehicles is related to ethnic status in San Diego County.
b) use of seat belts in motor vehicles depends on ethnic status in San Diego County.
c) use of seat belts in motor vehicles is associated with ethnic status in San Diego County.
d) All of the above.

ANSWER:
D

REGRESSION

1. In a multiple regression problem involving two independent variables, if b1 is computed to be


+2.0, it means that
a) the relationship between X1 and Y is significant.
b) the estimated average of Y increases by 2 units for each increase of 1 unit of X1, holding
X2 constant.
c) the estimated average of Y increases by 2 units for each increase of 1 unit of X1, without
regard to X2.
d) the estimated average of Y is 2 when X1 equals zero.

ANSWER:
b
2. The coefficient of multiple determination r2Y.12
a) measures the variation around the predicted regression equation.
b) measures the proportion of variation in Y that is explained by X1 and X2.
c) measures the proportion of variation in Y that is explained by X1 holding X2 constant.
d) will have the same sign as b1.

ANSWER:
b
3. In a multiple regression model, the value of the coefficient of multiple determination
a) has to fall between -1 and +1.
b) has to fall between 0 and +1.
c) has to fall between -1 and 0.
d) can fall between any pair of real numbers.

ANSWER:
b

4. In a multiple regression model, which of the following is correct regarding the value of the
2
adjusted r ?
a) It can be negative.
b) It has to be positive.
c) It has to be larger than the coefficient of multiple determination.
d) It can be larger than 1.

ANSWER:
a

TABLE 14-3

An economist is interested to see how consumption for an economy (in $ billions) is influenced by
gross domestic product ($ billions) and aggregate price (consumer price index). The Microsoft Excel
output of this regression is partially reproduced below.

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.991
R Square 0.982
Adjusted R Square 0.976
Standard Error 0.299
Observations 10

ANOVA
df SS MS F Signif F
Regression 2 33.4163 16.7082 186.325 0.0001
Residual 7 0.6277 0.0897
Total 9 34.0440

Coeff StdError t Stat P-value


Intercept – 0.0861 0.5674 – 0.152 0.8837
GDP 0.7654 0.0574 13.340 0.0001
Price – 0.0006 0.0028 – 0.219 0.8330

5. Referring to Table 14-3, when the economist used a simple linear regression model with
consumption as the dependent variable and GDP as the independent variable, he obtained an r2
value of 0.971. What additional percentage of the total variation of consumption has been
explained by including aggregate prices in the multiple regression?
a) 98.2
b) 11.1
c) 2.8
d) 1.1

ANSWER:
d
6. Referring to Table 14-3, the p-value for GDP is
a) 0.05
b) 0.01
c) 0.001
d) None of the above.

ANSWER:
d

7. Referring to Table 14-3, the p-value for the aggregated price index is
a) 0.05
b) 0.01
c) 0.001
d) None of the above.

ANSWER:
d

8. Referring to Table 14-3, the p-value for the regression model as a whole is
a) 0.05
b) 0.01
c) 0.001
d) None of the above.

ANSWER:
d

9. Referring to Table 14-3, what is the predicted consumption level for an economy with GDP equal
to $4 billion and an aggregate price index of 150?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion
ANSWER:
b

10. Referring to Table 14-3, what is the estimated average consumption level for an economy with
GDP equal to $4 billion and an aggregate price index of 150?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion

ANSWER:
b

11. Referring to Table 14-3, what is the estimated average consumption level for an economy with
GDP equal to $2 billion and an aggregate price index of 90?
a) $1.39 billion
b) $2.89 billion
c) $4.75 billion
d) $9.45 billion

ANSWER:
a
12. Referring to Table 14-3, one economy in the sample had an aggregate consumption level of $3
billion, a GDP of $3.5 billion, and an aggregate price level of 125. What is the residual for this
data point?
a) $2.52 billion
b) $0.48 billion
c) – $1.33 billion
d) – $2.52 billion

ANSWER:
b

13. Referring to Table 14-3, one economy in the sample had an aggregate consumption level of $4
billion, a GDP of $6 billion, and an aggregate price level of 200. What is the residual for this data
point?
a) $4.39 billion
b) $0.39 billion
c) – $0.39 billion
d) – $1.33 billion

ANSWER:
c
14. Referring to Table 14-3, to test for the significance of the coefficient on aggregate price index, the
value of the relevant t-statistic is
a) 2.365
b) 0.143
c) – 0.219
d) – 1.960

ANSWER:
c
15. Referring to Table 14-3, to test for the significance of the coefficient on aggregate price index, the
p-value is
a) 0.0001
b) 0.8330
c) 0.8837
d) 0.9999

ANSWER:
b

16. Referring to Table 14-3, to test for the significance of the coefficient on gross domestic product,
the p-value is
a) 0.0001
b) 0.8330
c) 0.8837
d) 0.9999

ANSWER:
a

17. Referring to Table 14-3, to test whether aggregate price index has a negative impact on
consumption, the p-value is _______?
a) 0.0001
b) 0.4165
c) 0.8330
d) 0.8837
ANSWER:
b

18. Referring to Table 14-3, to test whether aggregate price index has a positive impact on
consumption, the p-value is
a) 0.0001
b) 0.4165
c) 0.5835
d) 0.8330

ANSWER:
c

19. Referring to Table 14-3, to test whether gross domestic product has a positive impact on
consumption, the p-value is
a) 0.00005
b) 0.0001
c) 0.9999
d) 0.99995

ANSWER:
a

LOGISTIC REGRESSION

Please refer your note (by yourself) in the lecture.

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