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Week 4 Assignment Solution

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Week 4 Assignment Solution

Uploaded by

Rama Bhushan
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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Week 4: Inferential Statistics and Hypothesis Testing: R Implementation

Question 1-4
A departmental store collects the data pertaining to amount spent in shopping for 100
customers each week. Based on their historical experience of this weekly survey, they believe
that population standard deviation is approximately σ=$20. Data also suggests that the
population follows normal distribution. The latest sample has a mean 𝑥̅ = $82. Answer the
following questions. Some of the questions do not mention the exact answer value but the
interval. Choose the interval in which the correct value lies.
1) Compute the magnitude of critical value z value for 95% confidence.
a) 1.90-1.95
b) 1.95-2.00
c) 2.00-2.50
d) 2.50-3.00
e) 3.00-3.50

Hint: significance level (𝛼)=5%, For left tail z= qnorm(𝛼 /2)= -1.96, for right tail z=qnorm(1-
𝛼 /2) =1.96, magnitude =1.96. For excel pls use NORMSINV(5%/2) for left tail and
NORMSINV(1-5%/2)for right tail

Question 2: Compute the standard error of the sampling distribution for 95% confidence
a) 1.5-1.7
b) 1.7-1.9
c) 1.9-2.1
d) 2.1-2.3
e) 2.3-2.5

Hint: significance level (𝛼)=5%, σ=$20, n=100, Standard Error (SE)=


σ/sqrt(n)=20/sqrt(100)=2;

Question 3: Compute the margin of error (MOE) for 95% confidence using the information in
the previous questions 1-2.
a) 1-2
b) 2-3
c) 3-4
d) 4-5
e) 5-6
Hint: MOE= z*SE= 1.96*2=3.92

Question 4: Compute 95% confidence interval using the information in the previous
questions 1-3.
a) 70.08-89.52
b) 78.08-89.52
c) 78.08-85.92
d) 78.80-82.59
e) 70.08-82.95
Hint: Lower Limit of the Conf. interval LL= 𝑥̅ − 𝑀𝑂𝐸 = 82 -3.92 =78.08, and Upper limit
=𝑥̅ + 𝑀𝑂𝐸=82+3.92=85.92

Question 5-10
A coffee brand claims to fill a certain coffee packet with µ=3 pounds of coffee. You as a
consumer want to test whether it is less than 3 pounds and therefore the claim is accurate or
not. You pick a sample of n=36 packets with a mean weight of x=2.92 pounds. Assume that
population is normally distributed with standard deviation σ=0.18. Some of the questions do
not mention the exact answer value but the interval. Choose the interval in which the correct
value lies.
5: Formulate the null (H0) and alternate (Ha) hypotheses.

a) H0: µ ≥ 3 and Ha: µ<3


b) H0: µ ≤ 3 and Ha: µ>3
c) H0: µ = 3 and Ha: µ≠3
d) H0: µ ≥ 3 and Ha: µ>3
e) H0: µ ≤ 3 and Ha: µ<3

Hint: Since, this is from the consumer’s perspective, who would like to prove that u<3 with
sufficient evidence. Hence she will set-up her null as H0: µ ≥ 3 and Ha: µ<3

Question 6: Compute the standard error (SE, %) of the sampling distribution .


a) 0%-2%
b) 2%-4%
c) 4%-6%
d) 6%-8%

Hint: SE= σ/sqrt(n)=0.18/sqrt(36)=0.03 or 3%.


Question 7: Compute the sample z statistic
a) -3.00 to -2.50
b) -2.50 to -2.00
c) -2.00 to -1.50
d) -1.50 to -1.00

Hint: Sample z= (x-µ)/SE=(2.92-3)/0.03=-2.67


Question 8: Compute the p-value of the sample using the sample z value in the previous
question (7)
a) 0.10-0.20
b) 0.05-0.10
c) 0.05-0.01
d) 0.01-0.001

Hint: p-value = pnorm(z)= pnorm(-2.67)=0.0038 or NORMSDIST(-2.67) in excel

Question 9: Consider a significance level =5%, compute the critical z value


a) -3.00 to -2.50
b) -2.50 to -2.00
c) -2.00 to -1.50
d) -1.50 to -1.00

Hint: critical z value= qnorm(p)= qnorm(0.05)=-1.645 or NORMSINV(0.05) in excel

Question 10: Based on the information in previous questions (5-9) what is the decision rule at
5% level of significance.
a) Reject null, accept alternate
b) Fail to reject null, reject alternate
c) Accept null, reject alternate
d) None of the all
Hint: There can be two approaches. (1) The sample z (-2.67) is greater than the critical z (-
1.645) in terms of magnitude that leads to rejection of null and acceptance of alternate. (2)
sample p-value (0.38%) is smaller than significance level of 5%

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