Group Assignment No. 7 Inferential Statistics-Hypothesis Testing For Two Populations Max. Marks: 50
Group Assignment No. 7 Inferential Statistics-Hypothesis Testing For Two Populations Max. Marks: 50
Group Assignment No. 7 Inferential Statistics-Hypothesis Testing For Two Populations Max. Marks: 50
Max. Marks: 50
All the questions are compulsory. The weightage of each question has been mentioned next
to it.
Note:
3. Use the following format to name your files before submitting: Group<No.>.
Example, members of group no. 5 will name their files as: Group5. (No Spacing)
Q1. The Trade Show Bureau conducted a survey to determine why people go to trade shows.
The respondents were asked to rate a series of reasons on a scale from 1 to 5, with 1
representing little importance and 5 representing great importance. One of the reasons
suggested was general curiosity. The following responses for 50 people from the
computers/electronics industry and 50 people from the food/beverage industry were recorded
for general curiosity. Use these data and significance level of 0.01 to determine whether there
is a significant difference between people in these two industries on this question. Assume
the variance for the computer/electronics population is 1.0188 and the variance for the
Computers/Electronic Food/Beverages
1 2 1 3 2 3 3 2 4 3
0 3 3 2 1 4 5 2 4 3
3 3 1 2 2 3 2 3 2 3
3 2 2 2 2 4 3 3 3 3
1 2 3 2 1 2 4 2 3 3
1 1 3 3 2 2 4 4 4 4
2 1 4 1 4 3 5 3 3 2
2 3 0 1 0 2 0 2 2 5
3 3 2 2 3 4 3 3 2 3
2 1 0 2 3 4 3 3 3 2
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Q2. The Bureau of Labor Statistics shows that the average insurance cost to a company per
employee per hour is $1.84 for managers and $1.99 for professional specialty workers.
Suppose these figures were obtained from 14 managers and 15 professional specialty workers
and that their respective population standard deviations are $0.38 and $0.51. Assume that
a. Calculate a 98% confidence interval to estimate the difference in the mean hourly
company expenditures for insurance for these two groups. What is the value of the point
estimate?
b. Test to determine whether there is a significant difference in the hourly rates employers
pay for insurance between managers and professional specialty workers. Use a 2% level of
significance.
[2.5+2.5=5]
Q3 a. Suppose you want to determine whether the average values for populations 1 and
Sample 1 Sample 2
2 10 7 8 2 5 10 12 8 7 9 11
9 1 8 0 2 8 9 8 9 10 11 10
11 2 4 5 3 9 11 10 7 8 10 10
Test your conjecture, using a probability of committing a Type I error of .01. Assume the
population variances are the same and x is normally distributed in the populations.
b. Use these data to construct a 98% confidence interval for the difference in the two
population means.
[2.5+2.5=5]
Q4. Suppose a Realtor is interested in comparing the asking prices of midrange homes in
Peoria, Illinois, and Evansville, Indiana. The Realtor conducts a small telephone survey in the
two cities, asking the prices of midrange homes. A random sample of 21 listings in Peoria
with a standard deviation of $1,750. The Realtor assumes prices of midrange homes are
normally distributed and the variance in prices in the two cities is about the same.
a. What would he obtain for a 90% confidence interval for the difference in mean prices of
b. Test whether there is any difference in the mean prices of midrange homes of the two
[2.5+2.5=5]
Q5. Because of uncertainty in real estate markets, many homeowners are considering
remodeling and constructing additions rather than selling. Probably the most expensive room
in the house to remodel is the kitchen, with an average cost of about $23,400. In terms of
resale value, is remodeling the kitchen worth the cost? The following cost and resale figures
are published by Remodeling magazine for 11 cities. Use these data to construct a 99%
confidence interval for the difference between cost and added resale value of kitchen
Q6. The vice president of marketing brought to the attention of sales managers that most of
relationships in a disorganized, haphazard way. The sales managers brought the reps in for a
three-day seminar and training session on how to use an organizer to schedule visits and
recall pertinent information about each client more effectively. Sales reps were taught how to
schedule visits most efficiently to maximize their efforts. Sales managers were given data on
the number of site visits by sales reps on a randomly selected day both before and after the
seminar. Use the following data to test whether significantly more site visits were made after
the seminar. Use significance level of 0.05. Assume the differences in the number of site
[5]
Q7. Companies that recently developed new products were asked to rate which activities are
most difficult to accomplish with new products. Options included such activities as assessing
market potential, market testing, finalizing the design, developing a business plan, and the
like. A researcher wants to conduct a similar study to compare the results between two
industries: the computer hardware industry and the banking industry. He takes a random
sample of 56 computer firms and 89 banks. The researcher asks whether market testing is the
most difficult activity to accomplish in developing a new product. Some 48% of the sampled
computer companies and 56% of the sampled banks respond that it is the most difficult
activity. Use a level of significance of .20 to test whether there is a significant difference in
[5]
Q8. A large production facility uses two machines to produce a key part for its main product.
Inspectors have expressed concern about the quality of the finished product. Quality control
investigation has revealed that the key part made by the two machines is defective at times.
The inspectors randomly sampled 35 units of the key part from each machine. Of those
produced by machine A, five were defective. Seven of the 35 sampled parts from machine B
proportions of the populations of parts that are defective between machine A and machine B.
From the sample information, compute a 98% confidence interval for this difference.
[5]
Q9. How long are resale houses on the market? One survey by the Houston Association of
Realtors reported that in Houston, resale houses are on the market an average of 112 days. Of
course, the length of time varies by market. Suppose random samples of 13 houses in
Houston and 11 houses in Chicago that are for resale are traced. The data shown here
represent the number of days each house was on the market before being sold. Use the given
data and a 1% level of significance to determine whether the population variances for the
number of days until resale are different in Houston than in Chicago. Assume the numbers of
Houston Chicago
132 126 118 56
138 94 85 69
131 161 113 67
127 133 81 54
99 199 94 137
126 88 93
134
[5]
Q10. One recent study showed that the average annual amount spent by an East Coast
household on frankfurters was $23.84 compared with an average of $19.83 for West Coast
households. Suppose a random sample of 11 East Coast households showed that the standard
deviation of these purchases (frankfurters) was $7.52, whereas a random sample of 15 West
Coast households resulted in a standard deviation of $6.08. Do these samples provide enough
evidence to conclude that the variance of annual frankfurter purchases for East Coast
households is greater than the variance of annual frankfurter purchases for West Coast
households? Let alpha be .05. Assume amounts spent per year on frankfurters are normally
distributed. Suppose the data did show that the variance among East Coast households is
greater than that among West Coast households. What might this variance mean to decision
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