Given Name: Family Name:

Student Number: Signature:

University of Guelph
Department of Economics and Finance
College of Business and Economics

ECON* 2740 (Economic Statistics)

Instructor: Maynard

Midterm
VERSION CODE: B
Fall, 2015

Duration: 120 minutes

Aids Allowed: One two-sided handwritten 4 by 6 inch index card formula sheet. Only
simple calculators without programming and scientific functions allowed as determined
by the exam proctors. No other electronic devises permitted.
Answer all questions.
• Multiple choice questions should be answered on the Computer Answer Sheet. All other ques-
tions must include all work on the exam. No credit without work.
• Identify yourself (name and student number) on the Computer Answer Sheet by filling in
the circles.
• Sign your exam, initial each page, and keep your student ID out on the desk in front of you.
• Use only an HB or soft pencil to completely darken the appropriate choice on the answer sheet.
• With the sole exception of simple, non-programable, non-scientific calculators, use of electronic
devices is not permitted. Determination of which calculators are permitted is at the sole
discretion of the exam proctors. Please turn off your cell-phone and all other electronic devices,
placing these together with any personal items at the front of the room.
• You cannot leave the room during the exam without explicit permission from the proctor.
• The total marks are provided on the back of your exam. Your grade on the exam will be based
on the percentage of correct marks.
• Hand in your entire exam together with your computer sheet at the end of the exam.
Do not hesitate to raise your hand if you have a question.

Good Luck!
c
⃝Alex Maynard, 2015, all rights reserved
 page 2

Long Answer

Please include all your work on the exam. No credit will be given for answers without work,
even when the final answer is correct.

1. The following sample of data on education and years of schooling were recorded, where annual
income is measured in thousands of dollars and education is measured in years of schooling.

respondent Income Education

1 51 8
2 15 5
3 62 16
4 68 6
5 77 16

NOTE: For the answers to Question 1 below you may round to two digits of accuracy, such as
rounding 1.5478 to 1.55.

(a) [5] Provide the median income and education

(b) [5] Find the sample mean of both income and education. Denote them clearly and circle
your answers.

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(c) [5] Find the sample standard deviation of both income and education. Denote them clearly
and circle your answers.

(d) [5] Find the covariance of income and education. Circle your answer.

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(e) [4] calculate a statistic that tells you how much of the variation in income can be explained
(or accounted for) by variation in education?

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2. A (small) random sample of Canadian voters were polled ahead of last Monday’s election to
determine both their party preferences and the issues they felt most important to them. To
keep this purely fictional opinion poll manageable for the sake of students taking the midterm
exam, only three major parties and three major issues were discussed. No political judgement
of any kind is intended with respect to the parties, issues, or fictional poll results.
The data were coded as follows. For political party: 1 = Conservative, 2= Liberal, 3 = NDP.
For Issues: 1 = Economic Policy 2 = Environment and Resources, and 3 = Immigration and
Foreign Policy
The results from the survey were recorded as follows:
Voter Party Issue
1 1 1
2 3 2
3 1 3
4 2 1
5 3 3
6 2 2
7 1 1
8 2 2
9 3 2

(a) [4] Fill in the table below to show the frequency and relative frequency of the issues that
voters in this sample consider their top priority.

Issue Frequency Relative Frequency

Economic Policy
Environment and Resources
Immigration and Foreign Policy

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(b) [3] Provide a bar chart showing the frequency from Question 2a and a pie chart showing
the relative frequency from Question 2a. Be sure to label clearly. The figures do not have
to be drawn exactly to scale and you do not need to be an artist.

(c) [4] Provide a cross classification table of frequencies with party affiliation in the rows by
filling in the table below

Economic Environment Immigration &

Policy Reserouces Foreign Policy
Conservative
Liberal
NDP

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(d) [4] Fill in the table below to provide the relative frequency with which a voter supporting
each of three parties lists a given issue as their top priority. For example, we should be
able to look up the relative frequency with which a liberal voter lists the economy as their
top priority.

Economic Environment Immigration &

Policy Reserouces Foreign Policy
Conservative
Liberal
NDP

(e) [4] Fill in the table below to provide the relative frequency with which a voter listing each
of the three issues as their top priority supports a given party. For example, it should
tell you the relative frequency with which a voter listing the economy as her top priority
supports the liberal party.

Economic Environment Immigration &

Policy Reserouces Foreign Policy
Conservative
Liberal
NDP

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Multiple Choice

Please record all answers on your computer answer sheet using an HB or soft pencil. Be sure to erase
fully.

1. [3] For free point(s), enter the correct version code on your computer answer sheet and mark
the version code on all pages of the test. (Warning: If this information is not correctly entered,
the scantron could miss grade your exam)

Hint: Your version of the exam is version: B

(a) My version of the exam is version A

(b) My version of the exam is version B
(c) My version of the exam is version C
(d) My version of the exam is version D

2. [3] All of the following are indications that the histogram is not bell shaped, EXCEPT

(a) The histogram is bimodal

(b) the histogram is unimodal
(c) The histogram is positively skewed
(d) The histogram is negatively skewed

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3. [3] One thousand grade 8 students will take an end-of-year exam. Any student who does not
obtain at least a 30 on the exam will be required to repeat grade 8 again next year. Any student
who obtains above 90 will skip grade 9 and proceed directly to grade 10. All other students
will be enrolled in grade 9. Suppose that the mean on the exam is 60, the standard deviation
is 10, but the distribution is not symmetric. Which is the most precise statement: Of these
one thousand students,

(a) at least 750 will enroll in grade 9.

(b) at least 888 will enroll in grade 9.
(c) at least 950 will enroll in grade 9
(d) at least 997 will enroll in grade 9

4. [3] Referring to the Question 2 of the long answer section, your friend is skeptical that such
a small sample size can give us a reliable indication of voter intentions for the population at
large. Which best describes all of your friend’s concern(s) as stated above? [Note you do not
need to complete the long answer question to answer this problem]

(a) This is not a true random sample

(b) The sample may not reflect the population due to non-sampling error
(c) The sample may not reflect the population due to sampling error
(d) Both 4b and 4a.

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5. [3] Referring to the Question 2 of the long answer section, suppose that the response rate for
your survey was only thirty percent. Your aunt believes, for reasons unexplained, that voters
supporting the liberal party will be less likely to respond to the survey than voters supporting
the other two parties. For this reason she is skeptical that your sample was collected in a way
that gives us a reliable indication of voter intentions for the population at large. Which best
describes all of your aunt’s concern(s) as stated above? [Note you do not need to complete the
long answer question to answer this problem]

(a) This is not a true random sample

(b) The sample may not reflect the population due to non-sampling error
(c) The sample may not reflect the population due to sampling error
(d) Both 5b and 5a.

6. [3] Which of the following is the most accurate statement. Please read each statement carefully.

(a) The significance level is an indication of how likely the conclusions drawn from the sample
statistics can be accurately applied to the population parameters.
(b) The confidence level is an indication of how likely the conclusions drawn from the sample
parameters can be accurately applied to the population statistics.
(c) The significance level is an indication of how likely the conclusions drawn from the popu-
lation parameters can be accurately applied to the sample statistics.
(d) The confidence level is an indication of how likely the conclusions drawn from the sample
statistics can be accurately applied to the population parameters.

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7. [3] Data set 1 contains a hundred observations with values ranging from -40 to 270. Data set
2 contains three hundred observations with values ranging from 23 to 86. The mean for Data
set 1 is far above its median. The mean of Data set 2 is equal to its median. We wish to
provide a histogram for both data sets. Which data set should be divided into a larger number
of classes in order to construct the histogram according to method of selecting the number of
classes discussed in lecture.

(a) Impossible to determine given the information provided

(b) Equal number for both data sets
(c) Data Set 1
(d) Data set 2

8. [3] In an effort to deter international tax evasion, the Canadian Revenue Agency has recently
increased reporting requirements with high non-compliance penalties for certain foreign prop-
erty holdings. An advocacy group for immigrants is concerned that recent immigrants, some
of whom may still hold property in their country of origin for non-tax reasons, could be dis-
proportionately affected by the new requirement. Let A denote the event that a randomly
selected Canadian taxpayer is a recent immigrant and let B denote the event that they own
foreign property. The advocacy group’s concern is best represented by which of the following
inequalities:

(a) P (A|B) > P (B|A)

(b) P (B|A) > P (B|AC )
(c) P (B|A) > P (A|B)
(d) P (A|B) > P (A|B C )

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9. [3] Referring to question 8. After substantial research, the advocacy group has determined the
following (fictional) table of joint probabilities.
B BC
A 0.05 0.05
AC 0.10 0.80

According to the table above the margin probability of holding foreign property is closest or
equal to:

(a) 0.5 0
(b) 0.15
(c) 0.10
(d) 0.05

10. [3] Referring to Questions 8 and 9, the probability that a randomly selected taxpayer is a recent
immigrant who owns foreign property is closest or equal to:

(a) 0.33
(b) 0.15
(c) 0.10
(d) 0.05

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11. [3] Referring to Questions 8 and 9, if a taxpayer is a recent immigrant, the probability that
they hold foreign property is closest or equal to:

(a) 0.50
(b) 0.33
(c) 0.15
(d) 0.05

12. [3] You roll a fair four-sided die twice, with sides numbered 1,2,3 & 4, shaking it well each time
before rolling. The probability that you roll two 4s is closest or equal to:

(a) 0.2500
(b) 0.1875
(c) 0.1250
(d) 0.0625

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13. [3] Referring to the information in Question 12, let A be the event that your first role is strictly
less than 4 and B be the event that your second role is strictly greater than 1. Then P (A or B)
is closest or equal to:

(a) 0.9375
(b) 0.8125
(c) 0.5625
(d) 0.5000

14. [3] Referring to the information in Question 12, Let A be the event that your first role is strictly
less than 4 and B be the event that your second role is strictly greater than 1. Then P (A|B)
is closest or equal to:

(a) 0.8000
(b) 0.7500
(c) 0.6666
(d) 0.5625

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15. [3] Referring to the information in Question 12, let X be the random variable taking the value
of the first role. The population mean of X is closest or equal to.

(a) 3.0
(b) 2.5
(c) 2.0
(d) 1.5

16. [3] Referring to the information in Question 12, let Y equal the sum of the two rolls. The
population mean of Y is closest or equal to.

(a) 5.5
(b) 5.0
(c) 4.5
(d) 4.0

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17. [3] In a double header, a teams probability of winning the first game is 0.55. If the teams loses
their first game, then their probability of winning the second game drops to 0.40, whereas if
they win the first game, then it rises to 0.70. There are no ties. The probability that the team
wins the second game is closest or equal to:

(a) 0.627
(b) 0.605
(c) 0.565
(d) 0.535

18. [3] Refer to the information in Question 17. The team has won the second game. The probability
that they lost the first game is closest or equal to:

(a) 0.2975
(b) 0.31858
(c) 0.33645
(d) 0.50222

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19. [3] In a best out of seven game competition, your team must win at least four games to win the
competition. Suppose that the probability of your teaming winning each game is 0.60 and that
the outcome (win or lose) of each game is independent of the outcome of every other game.
Given that your team has lost the first three games, the probability that your team will win
the next four is closest or equal to:

(a) 0.1296
(b) 0.0625
(c) 0.0576
(d) 0.0256

END OF EXAM

End of examination
Total pages: 17
Total marks: 100