TestBank 78

Chapter 7
Continuous Probability Distributions

Multiple Choice
38. The mean of any uniform probability distribution is

A) (b - a)/2
B) (a + b)/2
C) ∑ x/η
D) n π
Answer: B
44. Which of the following is NOT true regarding the normal distribution?
A) Mean, median and mode are all equal
B) It has a single peak
C) It is symmetrical
D) The points of the curve meet the X-axis at z = –3 and z = 3
Answer: D
46. For a standard normal distribution, what is the probability that z is greater than 1.75?
A) 0.0401
B) 0.0459
C) 0.4599
D) 0.9599
Answer: A
47. What is the area under the normal curve between z = 0.0 and z = 1.79?
A) 0.4633
B) 0.0367
C) 0.9599
D) 0.0401
Answer: A
48. What is the area under the normal curve between z = –1.0 and z = –2.0?
A) 0.0228
B) 0.3413
C) 0.1359
D) 0.4772
Answer: C
49. What is the area under the normal curve between z = 0.0 and z = 2.0?
A) 1.0000
B) 0.7408
C) 0.1359
D) 0.4772
Answer: D
50. The mean amount spent by a family of four on food per month is $500 with a standard deviation of
$75. Assuming that the food costs are normally distributed, what is the probability that a family spends
less than $410 per month?
104 Test Bank, Chapter 7

A) 0.2158
B) 0.8750
C) 0.0362
D) 0.1151
Answer: D
52. What is the proportion of the total area under the normal curve within plus and minus two standard
deviations of the mean?
A) 68%
B) 99.7%
C) 34%
D) 95%
Answer: D
53. The mean score of a college entrance test is 500; the standard deviation is 75. The scores are
normally distributed. What percent of the students scored below 320?
A) About 50.82%
B) About 34.13%
C) About 7.86%
D) About 0.82%
Answer: D
54. The mean of a normally distributed group of weekly incomes of a large group of executives is $1,000
and the standard deviation is $100. What is the z-score for an income of $1,100?
A) 1.00
B) 2.00
C) 1.683
D) -0.90
Answer: A
55. A new extended-life light bulb has an average service life of 750 hours, with a standard deviation of
50 hours. If the service life of these light bulbs approximates a normal distribution, about what percent of
the distribution will be between 600 hours and 900 hours?
A) 95%
B) 68%
C) 34%
D) 99.7%
Answer: D
56. A study of a company's practice regarding the payment of invoices revealed that an invoice was paid
an average of 20 days after it was received. The standard deviation equaled five days. Assuming that the
distribution is normal, what percent of the invoices were paid within 15 days of receipt?
A) 15.87%
B) 37.91%
C) 34.13%
D) 86.74%
Answer: A
57. An accelerated life test on a large number of type-D alkaline batteries revealed that the mean life for
a particular use before they failed is 19.0 hours. The distribution of the lives approximated a normal
Statistical Techniques in Business & Economics, Lind/Marchal/Wathen, 13/e 105

distribution. The standard deviation of the distribution was 1.2 hours. About 95.44 percent of the
batteries failed between what two values?
A) 8.9 and 18.9
B) 12.2 and 14.2
C) 14.1 and 22.1
D) 16.6 and 21.4
Answer: D
58. The mean of a normal distribution is 400 pounds. The standard deviation is 10 pounds. What is the
area between 415 pounds and the mean of 400 pounds?
A) 0.5000
B) 0.1932
C) 0.4332
D) 0.3413
Answer: C
60. Which of the following is true in a normal distribution?

A) Mean equals the mode and the median
B) Mode equals the median
C) Mean divides the distribution into two equal parts
D) All of the above are correct
Answer: D
61. Tables of normal distribution probabilities are found in many statistics books. These probabilities are
calculated from a normal distribution with
A) a mean of 1 and a standard deviation of 1
B) a mean of 100 and a standard deviation of 15
C) a mean of 0 and a standard deviation of 15
D) a mean of 0 and a standard deviation of 1
Answer: D
62. Two normal distributions are compared. One has a mean of 10 and a standard deviation of 10. The
second normal distribution has a mean of 10 and a standard deviation of 2. Which of the following is
true?
A) the locations of the distributions are different
B) the distributions are from two different families
C) the dispersions of the distributions are different
D) the dispersions of the distributions are the same
Answer: C
64. The total area of a normal probability distribution is

A) between –3.0 and 3.0
B) 1.00
C) dependent on a value of 'z'.
D) approximated by the binomial distribution.
Answer: B
67. The weekly mean income of a group of executives is $1000 and the standard deviation of this group
is $100. The distribution is normal. What percent of the executives have an income of $925 or less?
A) About 15%
B) About 85%

C) About 50%
D) About 23%
Answer: D
68. The weight of cans of fruit is normally distributed with a mean of 1,000 grams and a standard
deviation of 50 grams. What percent of the cans weigh 860 grams or less?
A) 0.0100
B) 0.8400
C) 0.0026
D) 0.0001
Answer: C
69. What is the distribution with a mean of 0 and a standard deviation of 1 called?
A) Frequency distribution
B) z-score
C) Standard normal distribution
D) Binomial probability distribution
Answer: C
73. A large manufacturing firm tests job applicants who recently graduated from college. The test scores
are normally distributed with a mean of 500 and a standard deviation of 50. Management is considering
placing a new hire in an upper level management position if the person scores in the upper 6 percent of
the distribution. What is the lowest score a college graduate must earn to qualify for a responsible
position?
A) 50
B) 625
C) 460
D) 578
75. The annual commissions per salesperson employed by a manufacturer of light machinery averaged
$40,000 with a standard deviation of $5,000. What percent of the sales persons earn between $32,000 and
$42,000?
A) 60.06%
B) 39.94%
C) 34.13%
D) 81.66%
Answer: A
76. The mean of a normal probability distribution is 500 and the standard deviation is 10. About 95
percent of the observations lie between what two values?
A) 475 and 525
B) 480 and 520
C) 400 and 600
D) 350 and 650
Answer: B
77. A cola-dispensing machine is set to dispense a mean of 2.02 liters into a container labeled 2 liters.
Actual quantities dispensed vary and the amounts are normally distributed with a standard deviation of
0.015 liters. What is the probability a container will have less than 2 liters?
A) 0.0918

B) 0.3413
C) 0.1926
D) 0.8741
Answer: A
78. The employees of Cartwright Manufacturing are awarded efficiency ratings. The distribution of the
ratings approximates a normal distribution. The mean is 400, the standard deviation 50. What is the area
under the normal curve between 400 and 482?
A) 0.5000
B) 0.4495
C) 0.3413
D) 0.4750
Answer: B
86. What is the formula to convert any normal distribution to the standard normal distribution?
_______________________
Answer:
z = (X - µ) / σ
88. What proportion of the area under a normal curve is to the right of a z-score of zero? _________
Answer: 50% or 0.50
89. The mean of a normal probability distribution is 60 and the standard deviation is 5. What percent of
observations are between 50 and 70? _______ %
Answer: 95.44
90. What does a z value of –2.00 indicate about the corresponding X value? _______________________
Answer: less than or to the left of the mean, or the X value is 2 standard deviations less than the mean
Difficulty: Medium
92. What proportion of the area under a normal curve is to the right of z = –1.21? ________
Answer: 0.8461
93. What proportion of the area under a normal curve is to the left of z = 0.50? ________
Answer: 0.6914
94. What proportion of the area under a normal curve is to the left of z = –2.10? _________
Answer: 0.0179
95. A statistics student receives a grade of 85 on a statistics midterm. If the corresponding z-score equals
+1.5 and the standard deviation equals 7, what is the average grade on this exam? _______
Answer: 74.5

Use the following to answer questions 116-121:
A sample of 500 evening students revealed that their annual incomes from employment in industry during
the day were normally distributed with a mean income of $30,000 and a standard deviation of $3,000.
116. How many students earned more than $30,000? _______

Answer: 250
117. How many students earned between $27,000 and $33,000? ______
Answer: 341
Answer: 239
Answer: 500
120. How many students earned less than $22,500? _______

Answer: 3
121. How many students earned more than $36,000? _______

Answer: 11

The weight of a bag of corn chips is normally distributed with a mean of 22 ounces and a standard
deviation of ½ ounces.
122. What is the probability that a bag of corn chips is less than 20 ounces? _____
Answer: 0.0
123. What is the probability that a bag of corn chips weighs more than 21 ounces? _____
Answer: 0.9772
124. What is the probability that a bag of corn chips is weighs more than 23 ounces? _____
Answer: 0.0228
125. What is the probability that a bag of corn chips weighs less than 24 ounces? _____
Answer: 1.0
126. What is the probability that a bag of corn chips weighs between 20.75 and 23.25 ounces? _____
Answer: 0.9876
127. What is the probability that a bag of corn chips weighs 22.25 ounces? _____
Answer: 0.0
128. What is the probability that a bag of corn chips weighs between 21.75 and 22.25 ounces? _____
Answer: 0.3830

Two business major students, in two different sections of economics, were comparing test scores. The
following gives the students scores, class mean, and standard deviation for each section.
Section Score µ σ
1 84 75 7
2 75 60 8
129. Which student scored better compared to the rest of the section? _______________
Answer: student from section 2
130. What is the z-score of the student from section 1? _____________

Answer: 1.28
131. What is the z-score of the student from section 2? _____________

Answer: 1.87
Multiple Choices

The average score of 100 students taking a statistics final was 70 with a standard deviation of 7.
132. Assuming a normal distribution, approximately how many scored 90 or higher?

A) 0.4979
B) 0.0021
C) 0.9979
D) 2.86
Answer: B
133. Assuming a normal distribution, approximately how many scored less than 60?
A) 0.2271
B) 0.3729
C) 0.8929
D) – 1.14
E) None of the above
Answer: E
134. Assuming a normal distribution, approximately how many scored greater than 65?
A) 0.2611
B) 0.2389
C) 0.7611
D) –0.714
Answer: C

Bottomline Ink, a forms management company, fills 100 orders a day with a 2% error rate in the
completed orders. Assume this to be a binomial distribution.

135. What is the mean for this distribution?
A) 0.02
B) 1.4
C) 2
D) There is no mean for this type of distribution.
Answer: C
136. What is the standard deviation for this distribution?

A) 0.02
B) 4
C) 2
D) There is no standard deviation for this type of distribution.
Answer: B
137. What is the probability that there will be more than 5 order errors in a given day?
A) 0.1894
B) 0.4838
C) 0.9838
D) 2.1428
Answer: A
138. The probability of less than 1 order error in a given day is

A) 0.7143.
B) 0.3520
C) 0.2611.
D) 2.7611.
Answer: B
Fill-in-the-Blank
141. How is the expected value of a normal distribution computed?

Answer: Σ X/ N
142. How is the standard deviation of a normal distribution computed?

(X − µ)
2
Answer: N
144. For a binomial distribution with both n π and n π ( 1 – π ) greater than 5, what can we conclude
about the characteristics of the distribution?
Answer: the distribution is approximately normal with a mean of n π and a standard deviation of
nπ ( 1 – π )

Statistical Techniques in Business and Economics, 17e (Lind)
Chapter 8 Sampling Methods and the Central Limit Theorem
1) Sampling a population is often necessary because the cost of studying all the items in the
population is prohibitive.
Answer: TRUE
Explanation: Taking a sample from a population will be far less costly than trying to do a census
of the entire population.
Difficulty: 1 Easy
Topic: Sampling Methods
Learning Objective: 08-01 Explain why populations are sampled and describe four methods to
sample a population.
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
2) It is often not feasible to study the entire population because it is impossible to observe all the
items in the population.
Answer: TRUE
Explanation: If a population is essentially infinite, it is physically impossible to do a census. If
you wish to check for water contamination in a lake, you take one or more samples from the lake,
but it would not be possible to check all water molecules in the lake.
Difficulty: 1 Easy
Bloom's: Understand
3) When deciding to collect sample information rather than collecting information from the
population, the amount of time required to collect the information is unimportant.
Answer: FALSE
Explanation: If a population is large, it may take a very long time to collect the information. To
reduce the amount of time to collect the information, a sample of the population may be preferred.
Difficulty: 1 Easy
Bloom's: Understand
1
Copyright © 2018 McGraw-Hill
4) When doing research, knowing the population mean and other population parameters is
essential.
Answer: FALSE
Explanation: Often, the population mean and other population parameters are not known or
available. Consequently, sample information that represents the population is used in research
projects.
Difficulty: 2 Medium
Bloom's: Understand
AACSB: Reflective Thinking
5) In stratified random sampling, a population is divided into strata using naturally occurring
geographic or other boundaries. Then, strata are randomly selected and a random sample is
collected from each strata.
Answer: FALSE
Explanation: In stratified sampling, the population is first divided into strata, and random
samples are taken from each stratum. These strata represent portions of the population with
identifiable characteristics, such as size or particular demographics. Dividing a population into
naturally occurring geographic or other boundaries is known as cluster sampling.
Difficulty: 1 Easy
Bloom's: Understand
6) In cluster sampling, a population is divided into subgroups called clusters, and a sample is
randomly selected from each cluster.
Answer: FALSE
Explanation: In cluster sampling, a random sample of the clusters is first taken, and then random
samples are selected from each of the clusters. In this type of sampling, not all the clusters are
used.
Difficulty: 1 Easy
Bloom's: Understand
2
7) The items or individuals of the population are arranged in a file drawer alphabetically by date
received. A random starting point is selected and then every kth member of the population is
selected for the sample. This sampling method is called systematic random sampling.
Answer: TRUE
Explanation: In systematic random sampling, the starting point is random and the selection of
samples is done systematically (by every kth member) after that.
Difficulty: 1 Easy
Bloom's: Remember
8) When using stratified random sampling, the sampling error will be zero.
Answer: FALSE
Explanation: In all types of sampling, sampling error, the difference between the population
value and the sample statistic, will occur.
Difficulty: 1 Easy
Topic: Sampling Error
Learning Objective: 08-02 Define sampling error.
Bloom's: Understand
9) If the size of a sample equals the size of the population, we would not expect any error in
estimating the population parameter.
Answer: TRUE
Explanation: Sampling error occurs when one takes a sample from the population. If you do a
census where all members of the population are included, there can be no sampling error.
Bloom's: Apply
3
10) We can expect some difference between sample statistics and the corresponding population
parameters. This difference is called the sampling error.
Answer: TRUE
Explanation: Sampling error is the difference between the sample statistic and the population
parameter.
Difficulty: 1 Easy
Bloom's: Understand
11) If 40 samples of size 21 were selected from a population of 22,493, we would expect the mean
of the sample means and the population mean to be close but not exactly equal.
Answer: TRUE
Explanation: The mean of the sample means is exactly equal to the population mean when all
possible samples of a given size are taken from that population. For a population of 22,493, far
more than 40 possible samples of size 21 could be taken from the population, so while the mean of
the sample means would be close to the population mean, it would not be exactly equal to the
population mean due to sampling error.
Difficulty: 1 Easy
Bloom's: Understand
12) A sampling distribution of the means is a probability distribution consisting of all possible
sample means of a given sample size selected from a population.
Answer: TRUE
Explanation: Sampling distributions show all possible sample means of a given size and the
number of times each sample mean occurs for all possible samples taken from a population. This
information is used to determine the probability of each possible sample mean occurring.
Difficulty: 1 Easy
Topic: Sampling Distribution of the Sample Mean
Learning Objective: 08-03 Demonstrate the construction of a sampling distribution of the sample
mean.
Bloom's: Understand
4
13) If the sampling distribution of the sample means approximates a normal distribution, then the
population must be normally distributed.
Answer: FALSE
Explanation: We cannot make any statements about the population distribution based on the
sampling distribution of the sample means. However, the reverse is true: If the population is
normal, then the distribution of the sample means will also be normal. If the population does not
follow the normal distribution, the distribution of sample means will approach normal as the
number of samples is increased.
mean.
Bloom's: Understand
14) The mean of all possible sample means is equal to the population mean.
Answer: TRUE
Explanation: If all possible samples of a given size are taken from a population, and the mean of
those sample means is calculated, it will be equal to the population mean.
mean.
Bloom's: Understand
15) In the sampling distribution of the sample means, the standard error of the mean will vary
according to the size of the sample. As the sample size, n, gets larger, the variability of the
sampling distribution of the means gets larger.
Answer: FALSE
Explanation: As the size of the standard error of the mean, σ/ , increases, the variability of the
sampling distribution will decrease.
mean.
Bloom's: Understand
5
16) The central limit theorem states that for a sufficiently large sample, the sampling distribution
of the means of all possible samples of size n generated from the population will be approximately
normally distributed with the mean of the sampling distribution equal to σ2 and the variance equal
to σ2/n.
Answer: FALSE
Explanation: The mean of the sample means will closely approximate the population mean, μ.
The variance of the sampling distribution is σ2/n.
Topic: The Central Limit Theorem
Learning Objective: 08-04 Recite the central limit theorem and define the mean and standard
error of the sampling distribution of the sample mean.
Bloom's: Understand
17) The central limit theorem states that if the sample size, n, is sufficiently large, the sampling
distribution of the means will be approximately normal, even when the population is skewed or
uniform.
Answer: TRUE
Explanation: The central limit theorem shows that as the sample size increases, the sampling
distribution of the sample mean will converge toward a normal distribution, even if the population
itself is not normal.
Bloom's: Understand
18) Based on the central limit theorem, the sample mean can be used as a good estimator of the
population mean, assuming that the size of the sample is sufficiently large.
Answer: FALSE
Explanation: The results of the central limit theorem refer to the distribution of the sample
means. It states that if the population is normal, the distribution of the sample means is also
normal. If the population is not normal, then the distribution of the sample means will approach
normal as we increase the sample size, n.
Difficulty: 1 Easy
Bloom's: Understand
6
19) For the sampling distribution of sample means, standard error will decrease as sample size
increases.
Answer: TRUE
Explanation: As you increase sample size, the standard error of the mean decreases.
Difficulty: 3 Hard
Bloom's: Analyze
20) The standard error of the mean is also called the sampling error.
Answer: FALSE
Explanation: Sampling error is the difference between a sample statistic and a population
parameter, such as - μ.
Difficulty: 1 Easy
Topic: Standard Error of the Mean
Bloom's: Remember
21) The standard error of the mean measures the dispersion of the sampling distribution of the
sample mean.
Answer: TRUE
Explanation: The standard error of the sampling mean, or σ/ , measures the variability or
dispersion of the sampling distribution of the sample mean.
Difficulty: 1 Easy
Bloom's: Remember
7
22) The standard error of the mean is directly related to the sample size.
Answer: FALSE
Explanation: The standard error of the mean, σ/ , is indirectly or inversely related to the
sample size.
Bloom's: Understand
23) When computing probabilities for the sampling distribution of the sample mean, the z-statistic
is computed as z = .
Answer: FALSE
Explanation: The denominator is the standard error of the mean (σ/ ) not the standard
deviation (σ), so z =
Topic: Using the Sampling Distribution of the Sample Mean
Learning Objective: 08-05 Apply the central limit theorem to calculate probabilities.
Bloom's: Understand
24) The central limit theorem allows us to use a z-statistic to compute probabilities for the
sampling distribution of the sample mean.
Answer: TRUE
Explanation: The sampling distribution of the sampling mean will be normally distributed if the
samples are taken from a normally distributed population or if the samples are taken from a
population whose shape is not known or not normal, but the sample size is sufficiently large. If
these conditions exist, then we can use the standard normal distribution to calculate probabilities.
Bloom's: Understand
8
25) To study the population of consumer perceptions of new technology, sampling of the
population is preferred over surveying the population because ________.
A) sampling is more accurate
B) we can compute z-scores
C) it is quicker
D) sampling methods are simple
Answer: C
Explanation: It will be quicker to collect information with a sample instead of from the entire
population.
Difficulty: 1 Easy
Bloom's: Understand
26) When testing the safety of cars using crash tests, a sample of one or two cars is used because
________.
A) sampling is more accurate
B) cars are destroyed
C) it is quicker
D) the population is very large
Answer: B
Explanation: A very small sample would be used because the crash test will destroy the car.
Difficulty: 1 Easy
Bloom's: Understand
9
27) A marketing firm is studying consumer preferences for winter fashions in four different
months. From a population of women 18 to 21 years of age, a random sample of 100 women was
selected in January. Another random sample of 100 women was selected in March. Another
random sample of 100 women was selected in June. Another random sample of 100 women was
selected in September. What is the sample size?
A) 4
B) 100
C) 400
D) 1
Answer: B
Explanation: There are four samples of 100 each, so the sample size is 100.
Bloom's: Understand
28) A marketing firm is studying consumer preferences for winter fashions in four different
months. From a population of women 18 to 21 years of age, a random sample of 100 women was
selected in January. Another random sample of 100 women was selected in March. Another
random sample of 100 women was selected in June. Another random sample of 100 women was
selected in September. What is the number of samples?
A) 4
B) 100
C) 400
D) 1
Answer: A
Explanation: There are four samples of 100 each, so the number of samples is four.
Bloom's: Understand
10
29) When all the items in a population have an equal chance of being selected for a sample, the
process is called ________.
A) simple random sampling
B) z-score
C) sampling error
D) nonprobability sampling
Answer: A
Explanation: In a simple random sample, each member of the population has the same chance of
being selected for the sample.
Difficulty: 1 Easy
Bloom's: Understand
30) What is the difference between a sample mean and the population mean called?
A) Standard error of the mean
B) Sampling error
C) Interval estimate
D) Point estimate
Answer: B
Explanation: The sampling error is the difference between the population mean and the sample
mean, - μ.
Difficulty: 1 Easy
Bloom's: Understand
11
31) Suppose we select every fifth invoice in a file. What type of sampling is this?
A) Random
B) Cluster
C) Stratified
D) Systematic
Answer: D
Explanation: In a systematic sample, we pick a random starting point and then select every kth
observation. For example, in a file of invoices, we would select a random invoice, and then select
every fifth invoice.
Difficulty: 1 Easy
Bloom's: Remember
32) All possible samples of size n are selected from a population, and the mean of each sample is
determined. What is the mean of the sample means?
A) It is the population mean.
B) It is larger than the population mean.
C) It is smaller than the population mean.
D) It cannot be estimated in advance.
Answer: A
Explanation: The mean of all sample means is exactly equal to the population mean.
mean.
Bloom's: Understand
12
33) When dividing a population into subgroups so that a random sample from each subgroup can
be collected, what type of sampling is used?
A) Simple random sampling
B) Systematic sampling
C) Stratified random sampling
D) Cluster sampling
Answer: C
Explanation: In stratified sampling, we divide the population into strata and then randomly select
samples from each stratum.
Difficulty: 1 Easy
Bloom's: Understand
34) The true sampling error is usually not known because ________.
A) µ is unknown
B) µ is a random variable
C) σ2 is unknown
D) The sample mean cannot be computed.
Answer: A
Explanation: Sampling error, - μ, is the difference between a sample mean and the population
mean. Usually we do not know the population mean, so we cannot determine the sampling error.
Difficulty: 1 Easy
Bloom's: Understand
13
35) The size of the sampling error is ________.
A) directly related to the sample size—in other words, the larger the sample size, the larger the
sampling error
B) directly related to the population mean—in other words, the larger the mean, the larger the
sampling error
C) inversely related to the sample size—in other words, the larger the sample size, the smaller the
sampling error
D) inversely related to the population standard deviation—in other words, the smaller the standard
deviation, the larger the sampling error
Answer: C
Explanation: The sampling error will be smaller with a larger sample size.
Difficulty: 3 Hard
Bloom's: Analyze
36) The mean of all the sample means is ________.

A)
B) µ
C) σ
D) α
Answer: B
Explanation: The mean of all sample means is equal to the population mean.
mean.
Bloom's: Understand
14
37) For a given population, the mean of all the sample means , of sample size n, and the mean of
all (N) population observations (X) are ________.
A) equal to
B) not equal
C) equal to -μ
D) equal to the population mean µ
Answer: D
Explanation: The mean of the sample means is equal to the population mean.
mean.
Bloom's: Understand
38) Sampling error is defined as ________.

A) -μ
B) σ
C) σ/n
D) N − n
Answer: A
Explanation: The sampling error is the difference between the sample mean and the population
mean.
Bloom's: Understand
15
39) For a distribution of sample means constructed by sampling 5 items from a population of 15,
________.
A) the sample size is 15
B) there will be 3,003 possible sample means
C) the mean of the sample means will be 3
D) the standard error will be 1
Answer: B
Explanation: To determine the number of samples, we use the combination formula, where n is
the sample size and N is the population size.
NCn = 15C5 = = 3003
mean.
Bloom's: Understand
40) As the size of the sample increases, what happens to the shape of the distribution of sample
means?
A) It cannot be predicted in advance.
B) It approaches a normal distribution.
C) It is positively skewed.
D) It is negatively skewed.
Answer: B
Explanation: When we increase the size of the sample, the sampling distribution of sample means
approaches a normal distribution.
Bloom's: Understand
16
41) According to the central limit theorem, ________.
A) the population mean and the mean of all sample means are equal
B) increasing sample size decreases the dispersion of the sampling distribution
C) the sampling distribution of the sample means is approximately normally distributed
D) the sampling distribution of the sample means will be skewed
Answer: C
Explanation: The central limit theorem indicates two things. One, if the population follows a
normal distribution, then the sampling distribution is normally distributed. Two, if the population
does not follow a normal distribution, then the distribution of the sample means will approach a
normal distribution as n, the sample size, is increased.
Bloom's: Understand
42) According to the central limit theorem, ________.

A) sample size is important when the population is not normally distributed
B) increasing the sample size decreases the dispersion of the sampling distribution
C) the sampling distribution of the sample means is uniform
D) the sampling distribution of the sample means will be skewed
Answer: A
Explanation: The sample size is important. As the sample size is increased, the sampling
distribution of sample means will approach a normal distribution.
Bloom's: Understand
17
43) Manufacturers were subdivided into groups by volume of sales. Those with more than $100
million in sales were classified as large; those from $50 to $100 million as medium size; and those
between $25 and $50 million, and so on. Samples were then selected from each of these groups.
What is this type of sampling called?
A) Simple random sampling
B) Stratified random sampling
C) Cluster sampling
D) Systematic sampling
Answer: B
Explanation: This is stratified sampling because the entire population of manufacturers is
grouped or stratified by sales volume.
Difficulty: 1 Easy
Bloom's: Understand
44) An experiment involves selecting a random sample of 256 middle managers for study. One
item of interest is their annual income. The sample mean is computed to be $35,420. If the
population standard deviation is $2,050, what is the standard error of the mean?
A) $128.125
B) $138.36
C) $2,050
D) $8.01
Answer: A
Explanation: The standard error of the mean is found by = σ/ = 2050/ = $128.125.
Bloom's: Apply
AACSB: Analytic
18
45) The wildlife department has been feeding a special food to rainbow trout fingerlings in a pond.
Based on a large number of observations, the distribution of trout weights is normally distributed
with a mean of 402.7 grams and a standard deviation of 8.8 grams. What is the probability that the
mean weight for a sample of 40 trout exceeds 405.5 grams?
A) 0.3782
B) 0.0222
C) 1.0
D) 0.5
Answer: B
Explanation: To determine the probability, we calculate a z-value so that we can determine the
probability. z = = = 2.01.. Using the "areas under the normal curve" table,
P(z ≥ 2.01) = 0.5000 − 0.4778 = 0.0222.

Bloom's: Apply
AACSB: Analytic
46) Suppose a research firm conducted a survey to determine the mean amount steady smokers
spend on cigarettes during a week. A sample of 100 steady smokers revealed that the sample mean
is $20. The population standard deviation is $5. What is the probability that a sample of 100 steady
smokers spend between $19 and $21?
A) 0.4772
B) 0.0228
C) 0.9544
D) 1.0000
Answer: C
Explanation: To determine the probability, we use a z-value so that we determine the
probability. z = = = -2.00, z = = = +2.00
Using the "areas under the normal curve" table, P(-2.00 ≤ z ≤ 2.0) = 2(0.4772) = 0.9544.
Bloom's: Apply
AACSB: Analytic
19
47) The weight of trucks traveling on a particular section of I-475 has a population mean of 15.8
tons and a population standard deviation of 4.2 tons. What is the probability a state highway
inspector could select a sample of 49 trucks and find the sample mean to be 14.3 tons or less?
A) 0.0062
B) 0.3632
C) 0.1368
D) 0.4938
Answer: A
Explanation: We use the formula z = = = -2.05.
Then, using the "areas under the normal curve" table,

P(z ≤ − 2.5) = 0.5000 − 0.4938 = 0.0062.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
48) A statewide sample survey is to be conducted. First, the state is subdivided into counties.
Seven counties are selected at random, and further sampling is concentrated on these seven
counties. What type of sampling is this?
A) Simple random
B) Systematic random sampling
C) Cluster sampling
D) Stratified sampling
Answer: C
Explanation: This is an example of a cluster sampling. The clusters are naturally occurring
geographical counties.
Bloom's: Understand
20
49) Which of the following is the standard error of the mean?
A) σ
B) x/n
C) σ /
D) s
Answer: C
Explanation: To determine the standard error of the mean, we divide the population standard
deviation by the square root of the sample size.
Bloom's: Remember
50) Mileage tests were conducted on a randomly selected sample of 100 newly developed
automobile tires. The sample mean tread wear was 50,000 miles, with a population standard
deviation of 3,500 miles. What is the best estimate of the average tread life in miles for the entire
population of these tires?
A) 50,000
B) 3,500
C) 500
D) 35
Answer: A
Explanation: The best point estimate of the population mean is the sample mean. So, in this case,
the sample mean of 50,000 miles is the best point estimate of the unknown population mean.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
21
51) The mean of all possible sample means is equal to ________.
A) the population variance
B) σ /
C) the sample variance
D) the population mean
Answer: D
Explanation: The mean of the sample means is equal to the population mean.
Bloom's: Understand
52) Sampling error is the difference between a sample statistic and its corresponding ________.
A) sample mean
B) variance
C) population parameter
D) trend
Answer: C
Explanation: The difference between the sample mean and the population mean is called
sampling error, − μ.
Bloom's: Understand
53) For a population that is not normally distributed, the distribution of the sample means will
________.
A) be negatively skewed
B) approach a normal distribution
C) be positively skewed
D) take the same shape as the population
Answer: B
Explanation: As we increase the size of the samples, the distribution of sample means will move
toward the normal distribution, regardless of the shape of the population.
Bloom's: Understand
22
54) Bones Brothers & Associates prepare individual tax returns. Over prior years, Bones Brothers
has maintained careful records regarding the time to prepare a return. The mean time to prepare a
return is 90 minutes and the population standard deviation of this distribution is 14 minutes.
Suppose 100 returns from this year are selected and analyzed regarding the preparation time. What
assumptions do you need to make about the shape of the population distribution of all possible tax
preparation times to make inferences about the mean time to complete a tax form?
A) The population distribution is skewed to the right.
B) The population distribution is skewed to the left.
C) The population distribution is normal.
D) The shape of the population distribution does not matter.
Answer: D
Explanation: The shape of the population is not relevant. The distribution of the sample means
will converge to a normal distribution, regardless of the shape of the population distribution. This
convergence gets stronger as the sample size gets larger (here, n > 30).
Bloom's: Understand
return is 90 minutes, and the population standard deviation of this distribution is 14 minutes.
is the standard error of the mean?
A) 14 minutes
B) 140 minutes
C) 1.4 minutes
D) 90 minutes
Answer: C
Explanation: To determine the standard error of the mean, we use the formula
= σ/ = 14/ = 1.4
Bloom's: Apply
AACSB: Analytic
23
is the probability that the mean time for the sample of 100 returns for this year is greater than 92?
A) Approximately 0
B) 0.0832
C) 0.4168
D) 0.0764
Answer: D
Explanation: We use the formula z = = = +1.43. Then, using the "areas
under the normal curve" table, P(z ≥ 1.43) = 0.5000 − 0.4236 = 0.0764.
Bloom's: Apply
AACSB: Analytic
is the probability that the mean time for the sample of 100 returns is between 88 minutes and 92
minutes?
A) Approximately 1
B) 0.1664
C) 0.8336
D) 0.8472
Answer: D
Explanation: We use the formula z = = = -1.43 and z = =
= +1.43. Then, using the "areas under the normal curve" table,
P(−1.43 ≤ z ≤ 1.43) = 2(0.4236) = 0.8472.

Bloom's: Apply
AACSB: Analytic
24
58) The Office of Student Services at a large western state university maintains information on the
study habits of its full-time students. Their studies indicate that the mean amount of time
undergraduate students study per week is 20 hours. The hours studied follows the normal
distribution with a population standard deviation of six hours. Suppose we select a random sample
of 144 current students. What is the standard error of the mean?
A) 0.50
B) 6.00
C) 0.25
D) 2.00
Answer: A
Explanation:
To find the standard error of the mean, use the formula = σ/ = 6/ = 0.5
Bloom's: Apply
AACSB: Analytic
of 144 current students. What is the probability that the mean of this sample is between 19 hours
and 20 hours?
A) 2.00
B) 0.4772
C) −2.00
D) Cannot be calculated based on the given information.
Answer: B
Explanation:
We use the formula z = = = -2.00 and z = = = 0. Then,
using the "areas under the normal curve" table, P (−2.00 ≤ z ≤ 0) = 0.4772.
Difficulty: 1 Easy
Bloom's: Apply
AACSB: Analytic
25
of 144 current students. What is the probability that the mean of this sample is less than 19.25
hours?
A) 0.4332
B) 0.8664
C) 0.0668
D) 0.0181
Answer: C
Explanation: We use the formula z = = = -1.5. Then, using the "areas under
the normal curve" table, P(z ≤ -1.50) = 0.5000 − 0.4332 = 0.0668.

Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
of 144 current students. What is the probability that the mean of this sample is between 19.25
hours and 21.0 hours?
A) 0.9544
B) 0.0160
C) 0.0986
D) 0.9104
Answer: D
Explanation:
We use the formula z = = = -1.5 and z = = = +2.00.
Then, using the "areas under the normal curve" table,

P(-1.5 ≤ z ≤ 2.00) = 0.4332 + 0.4772 = 0.9104.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
26
62) The Intelligence Quotient (IQ) test scores for adults are normally distributed with a population
mean of 100 and a population standard deviation of 15. What is the probability we could select a
sample of 50 adults and find the mean of this sample is less than 95?
A) 0.0091
B) 0.9818
C) 0.4909
D) 0.9544
Answer: A
Explanation: We use the formula z = = = -2.36. Then, using the "areas under
the normal curve" table, P(≤ -2.36) = 0.5000 − 0.4909 = 0.0091.

Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
sample of 50 adults and find the mean of this sample is between 95 and 105?
A) 0.0182
B) 0.9818
C) 1.00
D) Very unlikely
Answer: B
Explanation:
We use the formula z = = = -2.36 and z = = = +2.36. Then,
using the "areas under the normal curve" table,

P(−2.36 ≤ z ≤ 2.36) = 2(0.4909) = 0.9818.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
27
sample of 50 adults and find that the mean of this sample exceeds 104?
A) 0.0294
B) 0.9412
C) Approximately 1
D) 0.9706
Answer: A
Explanation: We use the formula z = = = 1.89. Then, using the "areas under
the normal curve" table, P(z ≥ 1.89) = 0.5000 − 0.4706 = 0.0294.

Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
sample of 50 adults and find that the mean of this sample is between 98 and 103?
A) 0.3264
B) 0.9428
C) 0.4702
D) 0.7471
Answer: D
Explanation:
We use the formula z = = = -0.94, and z = = = 1.41. Then,
using the "areas under the normal curve" table,

P(- 0.94 ≤ z ≤ 1.41) = 0.3264 + 0.4207 = 0.7471.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
28
66) The tread life of tires mounted on light-duty trucks follows the normal probability distribution
with a population mean of 60,000 miles and a population standard deviation of 4,000 miles.
Suppose we select a sample of 40 tires and use a simulator to determine the tread life. What is the
standard error of the mean?
A) 632.46
B) 40
C) 4,000
D) Cannot be determined.
Answer: A
Explanation: To find the standard error of the mean, use the formula
= σ/ = 4000/ = 632.46.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
Suppose we select a sample of 40 tires and use a simulator to determine the tread life. What is the
likelihood of finding that the sample mean is between 59,050 and 60,950?
A) 0.4332
B) 0.8664
C) 1.00
D) Very likely
Answer: B
Explanation: We use the formula z = = = -1.50, and z = =
= +1.50. Then, using the "areas under the normal curve" table, P(−1.50 ≤ z ≤ 1.50)
= 2(0.4332) = 0.8664.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
29
Suppose you bought a set of four tires; what is the likelihood the mean tire life of these four tires is
more than 66,000 miles?
A) 0.0013
B) 0.9987
C) 0.4987
D) 0.9544
Answer: A
Explanation: We use the formula z = = = 3.00. Then, using the "areas
under the normal curve" table, P(z ≥ 3.00) = 0.5000 − 0.4987 = 0.0013.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
Suppose you bought a set of four tires, what is the likelihood the mean tire life of these four tires is
between 57,000 and 63,000 miles?
A) 0.4332
B) 0.8664
C) 1.00
D) Very likely
Answer: C
Explanation: We use the formula z = = = -1.50, and z = =
= +1.50. Then, using the "areas under the normal curve" table, P(−1.50 ≤ z ≤ 1.50)
= 2(0.4332) = 0.8664.
Difficulty: 3 Hard
Bloom's: Apply
AACSB: Analytic
30
70) How many different samples of size 4 can be selected from a population of size 8?
A) 8
B) 32
C) 70
D) 1680
Answer: C
Explanation: NCn = 8C4 = = 70
mean.
Bloom's: Apply
AACSB: Analytic
71) For a given population with a normal probability distribution, the sampling distribution of is
a normal probability distribution for ________.
A) small sample sizes only
B) any sample size
C) large sample sizes only
D) sample sizes greater than 30 only
Answer: B
Explanation: When the population is normally distributed, the sampling distribution of the
sample mean will also be normally distributed regardless of sample size.
mean.
Bloom's: Understand
31

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Chapter 7

Continuous Probability Distributions

38. The mean of any uniform probability distribution is

104 Test Bank, Chapter 7

Statistical Techniques in Business & Economics, Lind/Marchal/Wathen, 13/e 105

60. Which of the following is true in a normal distribution?

64. The total area of a normal probability distribution is

106 Test Bank, Chapter 7

Statistical Techniques in Business & Economics, Lind/Marchal/Wathen, 13/e 107

108 Test Bank, Chapter 7

116. How many students earned more than $30,000? _______

120. How many students earned less than $22,500? _______

121. How many students earned more than $36,000? _______

Use the following to answer questions 122-128:

Use the following to answer questions 129-131:

Statistical Techniques in Business & Economics, Lind/Marchal/Wathen, 13/e 109

130. What is the z-score of the student from section 1? _____________

131. What is the z-score of the student from section 2? _____________

Use the following to answer questions 132-134:

132. Assuming a normal distribution, approximately how many scored 90 or higher?

Use the following to answer questions 135-138:

110 Test Bank, Chapter 7

136. What is the standard deviation for this distribution?

138. The probability of less than 1 order error in a given day is

141. How is the expected value of a normal distribution computed?

142. How is the standard deviation of a normal distribution computed?

Statistical Techniques in Business & Economics, Lind/Marchal/Wathen, 13/e 111

36) The mean of all the sample means is ________.

38) Sampling error is defined as ________.

NCn = 15C5 = = 3003

42) According to the central limit theorem, ________.

P(z ≥ 2.01) = 0.5000 − 0.4778 = 0.0222.

Then, using the "areas under the normal curve" table,

P(−1.43 ≤ z ≤ 1.43) = 2(0.4236) = 0.8472.

the normal curve" table, P(z ≤ -1.50) = 0.5000 − 0.4332 = 0.0668.

Then, using the "areas under the normal curve" table,

the normal curve" table, P(≤ -2.36) = 0.5000 − 0.4909 = 0.0091.

using the "areas under the normal curve" table,

the normal curve" table, P(z ≥ 1.89) = 0.5000 − 0.4706 = 0.0294.

using the "areas under the normal curve" table,

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