THE UNIVERSITY OF THE WEST INDIES

EXAMINATIONS OF AUGUST 2020

Code and Name of Course: ECON 1005 – INTRODUCTION TO STATISTICS Paper:

Date and Time: Duration: 2 Days

INSTRUCTIONS TO CANDIDATES: This paper has 8 pages and 30 questions.

Candidates are required to answer ALL Questions.

Candidates must select only One Answer for Each Question.

All answers must be submitted using the Final Examination Answer Sheet template.

The Final Examination Answer Sheet template must be submitted as an MS Excel document only.
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ANSWER ALL QUESTIONS
Questions 1 – 16 are based on the following information:
A research company was hired to collect data on the yearly advertising expenditure ($000’s) for a random
sample of fast food chains taken from 3 Caribbean countries; Trinidad and Tobago, Jamaica and Barbados.
A random sample of properties was hence taken from each of these countries. The data collected was
entered on a Minitab spreadsheet for analysis. Exhibit I below was subsequently generated.
Exhibit I

Country N Mean Median Tri. Mean Std. Dev S.E. Mean

Trinidad and Tobago 81 35.6 32.1 30.4 15.7 5.23

Jamaica 49 22.9 20.1 15.7 * 1.36

Barbados 16 18.7 18.9 18.5 7.3 1.83

1. The value of * is:

(a) 66.6
(b) 9.5
(c) 1.8
(d) 0.2

2. The biased point estimator for the average yearly advertising expenditure of all Jamaican fast food
chains is:
(a) Sample Standard Deviation
(b) Trimmed Mean
(c) Sample Mean
(d) Sample Median

3. The unbiased point estimate for the average yearly advertising expenditure ($000’s) of all
Barbadian fast food chains is:
(a) 𝜇̂ = 18.5
(b) 𝜇̂ = 18.9
(c) 𝜇̂ = 18.7
(d) Sample Mean

4. The unbiased point estimate for the variance of the yearly advertising expenditure ($000’s) of all
Trinidadian fast food chains is:
(a) 𝜎̂2 = 5.23
(b) 𝜎̂2 = 15.7
̂2 = 246.5
(c) 𝜎
̂2 = 35.6
(d) 𝜎

5. Assuming normality, the probability that a Jamaican fast food chain chosen at random will have a
yearly advertising expenditure between $15,000 and $20,000 is:
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(a) 0.3783
(b) 0.175
(c) 0.825
(d) 0

6. Assuming normality, the 90% confidence interval for the average yearly advertising expenditure of
all Barbadian fast food chains is:
(a) $15,490 < 𝜇 < $21,910
(b) $16,246 < 𝜇 < $21,154
(c) $15,690 < 𝜇 < $21,710
(d) $5,900 < 𝜇 < $31,500

7. One of the members of the research team is required to test at the 7% level of significance, if the
average yearly advertising expenditure of all Trinidadian fast food chains falls below $26,200. The
alternative hypothesis of this test will be:
(a) 𝜇 = $26,200
(b) 𝜇 ≠ $26,200
(c) 𝜇 > $26,200
(d) 𝜇 < $26,200

8. One of the members of the research team is required to test at the 7% level of significance, if the
average yearly advertising expenditure of all Trinidadian fast food chains falls below $26,200. The
value of the test statistic is given by:
(a) 𝑍𝑐𝑎𝑙𝑐 = 0.6
(b) 𝑍𝑐𝑎𝑙𝑐 = 2.47
(c) 𝑍𝑐𝑎𝑙𝑐 = 8597.4
(d) 𝑍𝑐𝑎𝑙𝑐 = 1.8

9. One of the members of the research team is required to test at the 7% level of significance, if the
average yearly advertising expenditure of all Trinidadian fast food chains falls below $26,200. The
p-value of the test statistic is given by:
(a) p-value = 0.0359
(b) p-value = 0.2743
(c) p-value = 0.9641
(d) p-value = 0.7257

10. One of the members of the research team is required to test at the 7% level of significance, if the
average yearly advertising expenditure of all Trinidadian fast food chains falls below $26,200. The
conclusion of this test is that:
(a) the average yearly advertising expenditure of all Trinidadian fast food chains does not fall
below $26,200.
(b) the average yearly advertising expenditure of all Trinidadian fast food chains falls below
$26,200.
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(c) the average yearly advertising expenditure of all Trinidadian fast food chains equals $26,200.
(d) the average yearly advertising expenditure of all Trinidadian fast food chains is above $26,200.

11. A statistician wants to test at the 9% level of significance that the average yearly advertising
expenditure of all Trinidadian fast food chains is equal to the average yearly advertising
expenditure of all Jamaican fast food chains. The value of the test statistic is given by:
(a) 𝑍𝑐𝑎𝑙𝑐 = 1.69
(b) 𝑍𝑐𝑎𝑙𝑐 = 5.75
(c) 𝑍𝑐𝑎𝑙𝑐 = 1.93
(d) 𝑍𝑐𝑎𝑙𝑐 = 32.56

12. A statistician wants to test at the 9% level of significance that the average yearly advertising
expenditure of all Trinidadian fast food chains is equal to the average yearly advertising
expenditure of all Jamaican fast food chains. The critical values of this test are:
(a) 𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 = ±1.34
(b) 𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 = ±1.695
(c) 𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 = 1.34
(d) 𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 = 1.695

13. A statistician wants to test at the 9% level of significance that the average yearly advertising
expenditure of all Trinidadian fast food chains is equal to the average yearly advertising
expenditure of all Jamaican fast food chains. The conclusion of this test is that:
(a) the average yearly advertising expenditure of all Trinidadian fast food chains is not equal to the
average yearly advertising expenditure of all Jamaican fast food chains.
(b) the average yearly advertising expenditure of all Trinidadian fast food chains is equal to the
average yearly advertising expenditure of all Jamaican fast food chains.
(c) the average yearly advertising expenditure of all Trinidadian fast food chains is greater than the
average yearly advertising expenditure of all Jamaican fast food chains.
(d) the average yearly advertising expenditure of all Trinidadian fast food chains is less than the
average yearly advertising expenditure of all Jamaican fast food chains.

14. The research company randomly selects 3 Jamaican fast food chains and 2 Barbadian fast food
chains as a combined sample for further research. Assuming that the yearly advertising expenditure
of the fast food chains in each country are normally and independently distributed, then the
expected yearly advertising expenditure of the entire sample will be equal to:
(a) $41,600
(b) $41.6
(c) $106,100
(d) $106.1

15. The research company randomly selects 3 Jamaican fast food chains and 2 Barbadian fast food
chains as a combined sample for further research. Assuming that the yearly advertising expenditure
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of the fast food chains in each country are normally and independently distributed, then the
standard deviation of the yearly advertising expenditure of the entire sample will be equal to:
(a) $1025.41
(b) $32,022
(c) $114,700
(d) $57,700

16. Historical birth rate data for Grenada has shown that on average 2 children are born per 25 seconds
in the country. The probability then that at least 3 children are born in the next 25 seconds in the
country is:
(a) 0.1804
(b) 0.8196
(c) 0.6767
(d) 0.3233

17. Historical birth rate data for Grenada has shown that on average 2 children are born per 25 seconds
in the country. The probability then that exactly 6 children are born in the next minute in the
country is:
(a) 0.0002
(b) 0.012
(c) 0.1398
(d) 0.1462

18. The WHO has estimated that about 10% of the world’s population has immunity to a certain
disease. They have also found that amongst those that have immunity, 60% of them are males. If 8
persons are being tested for the disease today at a certain clinic, then the probability that at most 3
of them have immunity to the disease is:
(a) 0.0051
(b) 0.9949
(c) 0.033
(d) 0.1738

19. The WHO has estimated that about 10% of the world’s population has immunity to a certain
disease. They have also found that amongst those that have immunity, 60% of them are males. If 8
persons are being tested for the disease today at a certain clinic, then the probability that none of
them are women with immunity to the disease is:
(a) 0.0168
(b) 0.2786
(c) 0.6096
(d) 0.7214
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Questions 20 – 24 are based on the following information:
A random sample of Trinidadian citizens from different income brackets were asked to give their opinion
on the government’s handling of the Covid19 pandemic. Each citizen included in the study was asked if
they Agree, Disagree or had No Opinion on the government’s performance with respect to the pandemic.
The data so gathered was analyzed by a statistician and the results she obtained using MINITAB are shown
below. The numbers at the top of each cell represent the actual number of persons indicating that choice.
The numbers below represent the expected number of persons to make that choice.

Expected counts are printed below observed counts.

Low Middle High Total

Agree 49 64 80 193
(*) (55.97) (79.13)
Disagree 67 26 75 168
(50.4) (48.72) (68.88)
No Opinion 34 55 50 139
(41.7) (40.31) (56.99)
Total 150 145 205 500

Chi-sq = 1.37 + 1.15 + 0.01 +

5.47 + 10.6 + 0.54 +

1.42 + 5.35 + ** = 26.77

DF = 4, p-value = ??

20. For the 𝜒 2 test underlying the generation of the above table, 𝐻1 is opinion is independent of income
bracket:
(a) True
(b) False

21. The value ‘*’ is equal to:

(a) 57.9
(b) 101
(c) 1.37
(d) 388.6

22. The value ‘**’ is equal to:

(a) 0.86
(b) 0.98
(c) 6.99
(d) -0.12

23. The p-value of this 𝜒 2 test is equal to:

(a) p-value > 0.002
(b) p-value < 0.002
(c) p-value > 0.001
(d) p-value < 0.001
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24. The conclusion of this 𝜒 2 test is:

(a) Opinion is equal to income bracket
(b) No valid conclusion can be drawn
(c) Opinion is independent of income bracket
(d) Opinion is dependent on income bracket

Questions 25 - 30 are based on the following information:

A research team was put together by the IMF to study the relationship between Guyana’s investment levels
and 3 variables; interest rates, savings and GDP. A sample of annual data spanning the period 1995 to
2019 was taken with a view to testing the following multiple linear regression model:

𝐼𝑁𝑉 = 𝜶 + 𝜷𝐼𝑁𝑇 + 𝜸𝑆𝐴𝑉 + 𝜹𝐺𝐷𝑃

Where INV = total annual investments ($000’s), INT = annual interest rates, SAV = total annual savings
($000’s) and GDP = yearly GDP ($000’s). The sample was processed using MINITAB and the following
is an extract of the output obtained:

The regression equation is *****

Predictor Coef StDev t-ratio p

Constant 18791.49 6505.385 2.89

INT 3750.853 666.9154 5.62

SAV 0.201878 0.102100 1.98

GDP 0.104661 0.144864 0.72 *

S = 5.05 R-sq = 88.9% R-sq(adj) = 87.2%

Analysis of Variance
Source DF SS MS F p

Regression 3 36.63 12.21 ? ??

Error 21 46.2 2.2

Total 24

25. The value of ‘*’ is given by:

(a) p-value < 0.2
(b) p-value > 0.2
(c) p-value < 0.1
(d) p-value > 0.1

26. The conclusion for the test of significance for the coefficient 𝜸, at the 5% level of significance is:
(a) 𝜸 is not significant
(b) 𝜸 is significant
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(c) Significance cannot be determined

27. A researcher would like to test at the 10% level of significance if the coefficient 𝜷 is significantly
different from 4000. The conclusion of this test is:
(a) 𝜷 > 4000
(b) 𝜷 < 4000
(c) 𝜷 = 4000
(d) 𝜷 ≠ 4000

28. The p-value of the F Test is given by:

(a) p-value = 0.00
(b) p-value < 0.001
(c) 0.001 < p-value < 0.01
(d) 0.01 < p-value < 0.025

29. The conclusion of the F Test will be:

(a) The overall model is significant at all conventional significance levels
(b) The overall model is insignificant at all conventional significance levels
(c) The overall model is significant at the 5% level of significance only.
(d) The overall model is insignificant at the 5% level of significance only.

30. The following correlation matrix was developed from the data used above.

Exhibit II

INV INT SAV GDP

INV 1.0 0.24 0.9 -0.31

INT 0.24 1.0 0.16 0.29

SAV 0.9 0.16 1.0 -0.89

GDP -0.31 0.29 -0.89 1.0

For the above table identify and interpret the correlation between SAV and GDP:
(a) Correlation is 0.24 which is perfect correlation
(b) Correlation is 0.9 which is strong positive correlation
(c) Correlation is -0.89 which is strong negative correlation
(d) Correlation is 0 which is no correlation

END OF QUESTION PAPER