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Statpart1.docx

1. ABC Printing Firm rented new computer and color laser printer for three years.

The service rent offers unlimited repairs for a fee of \$100 a year plus a \$25 service charge for each repair needed. The company’s research indicates that during a given year 86% of these computers need no repairs, 9% need to be repaired once, 4% twice, 1% three times, and none required more than three repairs.

a) Find the expected number of repairs for this kind of computer per year.

b) Find the standard deviation of the number of repairs per year.

c) What are the mean and standard deviation of the company’s annual expense with the service contract for the computer?

2. A company want to determine the impact of advertising on its profits. Result of a regression over company profits and the amount of money the company spent on advertising produced an R2 = .72. Which of these statements is true?

I. This model can correctly predict the profit for 72% of companies.

II. 72% of the variance in company profit can be accounted for by the response variable.

III. 72% of the variance in company profit can be accounted for by the explanatory variables.

IV. On average, companies spend about 72% of their profits on advertising.

A. None

B. I only

C. II only

D. III only

E. II and III

3. Farmers Insurance records indicate that 10% of its policyholders file claims involving theft or robbery of personal property from their homes. Suppose a random sample of 350 policyholders is selected. The probability that the sample proportion of policyholders filing claims involving theft or robbery from their homes is less than 7% is

A. 0.0918

B. 0.1333

C. 0.0306

D. 0.0517

E. 0.7892

4. One environmental research determined that about 33% of Americans polled said that they would likely purchase reusable cloth bags for groceries in order to reduce plastic waste. Suppose 45 shoppers are interviewed a local supermarket:

a. Describe the sampling distribution for the sample proportion by checking the Normality of the model and determining its mean and standard deviation.

b. What is the probability that no more than 28% of shoppers say that they are likely to purchase reusable cloth bags for groceries?

c. What is the probability that between 28% and 38% of shoppers say that they are likely to purchase reusable cloth bags for groceries?

5. A given business used to make its statistical estimation by using a 95% confidence interval. But now it determined that its next confidence interval to have a smaller margin of error without losing any confidence. To do this, it can:

I. change the z value to a smaller number.

II. take a larger sample.

III. take a smaller sample.

A. I only

B. II only

C. III only

D. I and II

E. I and III

6. One of the listed ones below is not an assumption and/or condition required for constructing a confidence interval for the mean?

A. Randomization condition

B. Nearly Normal condition

C. Success/Failure condition

D. 10% condition

E. Independence assumption

7. Pharmaceutical drug researchers determined that body absorption rates are important considerations when manufacturing a generic version of a brand-name drug. Dr. Johnson read that the absorption rate for a cancer new generic drug (G) is the same as its brand-name counterpart(B). He has a researcher colleague to run a small experiment to test H0:G B 0 against the alternative HA: G B .

Which of the following would be a Type I error?

A. Deciding that the absorption rates are the same, when in fact they are.

B. Deciding that the absorption rates are different, when in fact they are.

C. Deciding that the absorption rates are the same, when in fact they are not.

D. Deciding that the absorption rates are different, when in fact they are not.

E. The researcher cannot make a Type I error, since he has run an experiment.

8. During recession of 2007-09, many businesses tried to downscale their employees by providing early retirement incentives to older employees. One department of labor study indicated that of 780 companies found that 205 engage in such downsizing practices. The 99% confidence interval for the proportion of the firms that scale down their workforces by offering early retirement incentives is:

A. .19 to .35

B. .65 to .81

C. .22 to 0.30

D. .69 to .77

E. .23 to .32