Business Statistics
Part 1
Question 1
A sample of 81 account balances of a credit company showed an average balance of $1,200 with a standard deviation of $126.
- Formulate the hypotheses that can be used to determine whether the mean of all account balances is significantly different from $1,150.
- Compute the test statistic.
- Using the p-value approach, what is your conclusion? Let α = .05.
Question 2
During the recent primary elections, the democratic presidential candidate showed the following pre-election voter support in Alabama and Mississippi.
- We want to determine whether or not the proportions of voters favoring the Democratic candidate were the same in both states. Provide the hypotheses.
- Compute the test statistic.
- Determine the p-value; and at 95% confidence, test the above hypotheses.
Question 3
In order to estimate the difference between the yearly incomes of marketing managers in the East and West of the United States, the following information was gathered.
- Develop an interval estimate for the difference between the average yearly incomes of the marketing managers in the East and West. Use α = 0.05.
- At 95% confidence, use the p-value approach and test to determine if the average yearly income of marketing managers in the East is significantly different from the West.
Part 2
Question 1
Assume you have noted the following prices for paperback books and the number of pages that each book contains.
Develop a least-squares estimated regression line.
- Compute the coefficient of determination and explain its meaning.
- Compute the correlation coefficient between the price and the number of pages. Test to see if x and y are related. Use α = 0.10.
Question 2
The following data represent a company’s yearly sales volume and its advertising expenditure over a period of 8 years.
- Develop a scatter diagram of sales versus advertising and explain what it shows regarding the relationship between sales and advertising.
- Use the method of least squares to compute an estimated regression line between sales and advertising.
- If the company’s advertising expenditure is $400,000, what are the predicted sales? Give the answer in dollars.
- What does the slope of the estimated regression line indicate?