Test Bank for Essentials of Modern Business

Statistics, 5th Edition: David R. Anderson

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Test Bank for Essentials of Modern Business Statistics, 5th Edition: David R. Anderson

CHAPTER 9—HYPOTHESIS TESTS

MULTIPLE CHOICE

1. More evidence against H0 is indicated by

a. lower levels of significance
b. smaller p-values
c. smaller critical values
d. lower probabilities of a Type II error
ANS: B PTS: 1

2. Two approaches to drawing a conclusion in a hypothesis test are

a. p-value and critical value
b. one-tailed and two-tailed
c. Type I and Type II
d. null and alternative
ANS: A PTS: 1

3. As a general guideline, the research hypothesis should be stated as the

a. null hypothesis
b. alternative hypothesis
c. tentative assumption
d. hypothesis the researcher wants to disprove
ANS: B PTS: 1

4. A Type I error is committed when

a. a true alternative hypothesis is not accepted
b. a true null hypothesis is rejected
c. the critical value is greater than the value of the test statistic
d. sample data contradict the null hypothesis
ANS: B PTS: 1

5. Which of the following hypotheses applies to a situation where action must be taken both when H0
cannot be rejected and when H0 can be rejected?
a.
b.
c.
d.

ANS: C PTS: 1

6. The practice of concluding “do not reject H0” is preferred over “accept H0” when we
a. are conducting a one-tailed test
b. are testing the validity of a claim
c. have an insufficient sample size
d. have not controlled for the Type II error
ANS: D PTS: 1

7. If the cost of a Type I error is high, a smaller value should be chosen for the

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 a. critical value
b. confidence coefficient
c. level of significance
d. test statistic
ANS: C PTS: 1

8. When the rejection region is in the lower tail of the sampling distribution, the p-value is the area under
the curve
a. less than or equal to the critical value
b. less than or equal to the test statistic
c. greater than or equal to the critical value
d. greater than or equal to the test statistic
ANS: B PTS: 1

9. In tests about a population proportion, p0 represents the

a. hypothesized population proportion
b. observed sample proportion
c. observed p-value
d. probability of

ANS: A PTS: 1

10. Which of the following is an improper form of the null and alternative hypotheses?
a. and
b. and
c. and
d. and

ANS: C PTS: 1

11. For a two-tailed hypothesis test about , we can use any of the following approaches except
a. compare the confidence interval estimate of  to the hypothesized value of 
b. compare the p-value to the value of 
c. compare the value of the test statistic to the critical value
d. compare the level of significance to the confidence coefficient
ANS: D PTS: 1

12. An example of statistical inference is

a. a population mean
b. descriptive statistics
c. calculating the size of a sample
d. hypothesis testing
ANS: D PTS: 1

13. In hypothesis testing, the hypothesis tentatively assumed to be true is

a. the alternative hypothesis
b. the null hypothesis
c. either the null or the alternative
d. None of the other answers are correct.
ANS: B PTS: 1
14. In hypothesis testing, the alternative hypothesis is
a. the hypothesis tentatively assumed true in the hypothesis-testing procedure
b. the hypothesis concluded to be true if the null hypothesis is rejected
c. the maximum probability of a Type I error
d. All of the answers are correct.
ANS: B PTS: 1

15. Your investment executive claims that the average yearly rate of return on the stocks she recommends
is at least 10.0%. You plan on taking a sample to test her claim. The correct set of hypotheses is
a. H0:   10.0% Ha:   10.0%
b. H0:   10.0% Ha:   10.0%
c. H0:   10.0% Ha:   10.0%
d. H0:   10.0% Ha:   10.0%
ANS: D PTS: 1

16. A meteorologist stated that the average temperature during July in Chattanooga was 80 degrees. A
sample of 32 Julys was taken. The correct set of hypotheses is
a. H0:   80 Ha:   80
b. H0:   80 Ha:  > 80
c. H0:   80 Ha:  = 80
d. None of the other answers are correct.
ANS: D PTS: 1

17. A student believes that the average grade on the final examination in statistics is at least 85. She plans
on taking a sample to test her belief. The correct set of hypotheses is
a. H0:   85 Ha:   85
b. H0:   85 Ha:   85
c. H0:   85 Ha:   85
d. None of the other answers are correct.
ANS: C PTS: 1

18. The average life expectancy of tires produced by the Whitney Tire Company has been 40,000 miles.
Management believes that due to a new production process, the life expectancy of its tires has
increased. In order to test the validity of this belief, the correct set of hypotheses is
a. H0:   40,000 Ha:   40,000
b. H0:   40,000 Ha:   40,000
c. H0:   40,000 Ha:   40,000
d. H0:   40,000 Ha:   40,000
ANS: B PTS: 1

19. A soft drink filling machine, when in perfect adjustment, fills the bottles with 12 ounces of soft drink.
Any overfilling or underfilling results in the shutdown and readjustment of the machine. To determine
whether or not the machine is properly adjusted, the correct set of hypotheses is
a. H0:  < 12 Ha:   12
b. H0:   12 Ha:   12
c. H0:   12 Ha:  = 12
d. H0:  = 12 Ha:   12
ANS: D PTS: 1
20. The manager of an automobile dealership is considering a new bonus plan in order to increase sales.
Currently, the mean sales rate per salesperson is five automobiles per month. The correct set of
hypotheses for testing the effect of the bonus plan is
a. H0:   5 Ha:   5
b. H0:   5 Ha:   5
c. H0:   5 Ha:   5
d. H0:   5 Ha:   5
ANS: B PTS: 1

21. In hypothesis testing if the null hypothesis is rejected,

a. no conclusions can be drawn from the test
b. the alternative hypothesis must also be rejected
c. the data must have been accumulated incorrectly
d. None of the other answers are correct.
ANS: D PTS: 1

22. If a hypothesis test leads to the rejection of the null hypothesis, a

a. Type II error must have been committed
b. Type II error may have been committed
c. Type I error must have been committed
d. Type I error may have been committed
ANS: D PTS: 1

23. The error of rejecting a true null hypothesis is

a. a Type I error
b. a Type II error
c. can be either a or b, depending on the situation
d. committed when not enough information is available
ANS: A PTS: 1

24. In hypothesis testing if the null hypothesis has been rejected when the alternative hypothesis has been
true,
a. a Type I error has been committed
b. a Type II error has been committed
c. either a Type I or Type II error has been committed
d. the correct decision has been made
ANS: D PTS: 1

25. A Type II error is committed when

a. a true alternative hypothesis is mistakenly rejected
b. a true null hypothesis is mistakenly rejected
c. the sample size has been too small
d. not enough information has been available
ANS: A PTS: 1

26. The probability of making a Type I error is denoted by

a. 
b. 
 c. 1 − 
d. 1 − 
ANS: A PTS: 1

27. The level of significance is the

a. maximum allowable probability of Type II error
b. maximum allowable probability of Type I error
c. same as the confidence coefficient
d. same as the p-value
ANS: B PTS: 1

28. The level of significance in hypothesis testing is the probability of

a. accepting a true null hypothesis
b. accepting a false null hypothesis
c. rejecting a true null hypothesis
d. could be any of the above, depending on the situation
ANS: C PTS: 1

29. In the hypothesis testing procedure,  is

a. the level of significance
b. the critical value
c. the confidence level
d. 1 − level of significance
ANS: A PTS: 1

30. The level of significance can be any

a. negative value
b. value
c. value larger than 0.1
d. None of the answers is correct.
ANS: D PTS: 1

31. In hypothesis testing, the critical value is

a. a number that establishes the boundary of the rejection region
b. the probability of a Type I error
c. the probability of a Type II error
d. the same as the p-value
ANS: A PTS: 1

32. A one-tailed test is a

a. hypothesis test in which rejection region is in both tails of the sampling distribution
b. hypothesis test in which rejection region is in one tail of the sampling distribution
c. hypothesis test in which rejection region is only in the lower tail of the sampling
distribution
d. hypothesis test in which rejection region is only in the upper tail of the sampling
distribution
ANS: B PTS: 1

33. A two-tailed test is a

 a. hypothesis test in which rejection region is in both tails of the sampling distribution
b. hypothesis test in which rejection region is in one tail of the sampling distribution
c. hypothesis test in which rejection region is only in the lower tail of the sampling
distribution
d. hypothesis test in which rejection region is only in the upper tail of the sampling
distribution
ANS: A PTS: 1

34. Read the z statistics from the normal distribution table and circle the correct answer. A two-tailed test
at a .0694 level of significance; z =
a. -1.96 and 1.96
b. -1.48 and 1.48
c. -1.09 and 1.09
d. -0.86 and 0.86
ANS: B PTS: 1

35. Read the z statistic from the normal distribution table and circle the correct answer. A one-tailed test
(lower tail) at a .063 level of significance; z =
a. -1.86
b. -1.53
c. -1.96
d. -1.645
ANS: B PTS: 1

36. Read the z statistic from the normal distribution table and circle the correct answer. A one-tailed test
(upper tail) at a .123 level of significance; z =
a. 1.54
b. 1.96
c. 1.645
d. 1.16
ANS: D PTS: 1

37. When the hypotheses H0:   100 and Ha:   100 are being tested at a level of significance of , the
null hypothesis will be rejected if the test statistic z is
a. > z
b. > -z
c. < -z
d. < 100
ANS: C PTS: 1

38. In order to test the hypotheses H0:   100 and Ha:   100 at an  level of significance, the null
hypothesis will be rejected if the test statistic z is
a.  z
b.  z
c.  -z
d.  100
ANS: A PTS: 1
39. For a one-tailed test (upper tail) with a sample size of 900, the null hypothesis will be rejected at the
.05 level of significance if the test statistic is
a. less than or equal to -1.645
b. greater than or equal to 1.645
c. less than 1.645
d. less than -1.96
ANS: B PTS: 1

40. For a two-tailed test with a sample size of 40, the null hypothesis will not be rejected at a 5% level of
significance if the test statistic is
a. between -1.96 and 1.96, exclusively
b. greater than 1.96
c. less than 1.645
d. greater than -1.645
ANS: A PTS: 1

41. If a hypothesis is rejected at a 5% level of significance, it

a. will always be rejected at the 1% level
b. will always be accepted at the 1% level
c. will never be tested at the 1% level
d. may be rejected or not rejected at the 1% level
ANS: D PTS: 1

42. If a hypothesis is not rejected at a 5% level of significance, it will

a. also not be rejected at the 1% level
b. always be rejected at the 1% level
c. sometimes be rejected at the 1% level
d. Not enough information is given to answer this question.
ANS: A PTS: 1

43. A p-value is the

a. probability, when the null hypothesis is true, of obtaining a sample result that is at least as
unlikely as what is observed
b. value of the test statistic
c. probability of a Type II error
d. probability corresponding to the critical value(s) in a hypothesis test
ANS: A PTS: 1

44. Which of the following does not need to be known in order to compute the p-value?
a. knowledge of whether the test is one-tailed or two-tailed
b. the value of the test statistic
c. the level of significance
d. All of these are needed.
ANS: C PTS: 1

45. When the p-value is used for hypothesis testing, the null hypothesis is rejected if
a. p-value  
b.   p-value
c. p-value  
 d. p-value = z
ANS: A PTS: 1

46. A two-tailed test is performed at a 5% level of significance. The p-value is determined to be 0.09. The
null hypothesis
a. must be rejected
b. should not be rejected
c. may or may not be rejected, depending on the sample size
d. has been designed incorrectly
ANS: B PTS: 1

47. Excel's __________ function can be used to calculate a p-value for a hypothesis test.
a. RAND
b. NORM.S.DIST
c. NORM.S.INV
d. Not enough information is given to answer this question.
ANS: B PTS: 1

48. When using Excel to calculate a p-value for an upper-tail hypothesis test, the following must be used
a. RAND
b. 1 − NORM.S.DIST
c. NORM.S.DIST
d. Not enough information is given to answer this question.
ANS: B PTS: 1

49. When using Excel to calculate a p-value for a lower-tail hypothesis test, the following must be used
a. RAND
b. 1 − NORM.S.DIST
c. NORM.S.DIST
d. Not enough information is given to answer this question.
ANS: C PTS: 1

50. For a sample size of 30, changing from using the standard normal distribution to using the t
distribution in a hypothesis test,
a. will result in the rejection region being smaller
b. will result in the rejection region being larger
c. would have no effect on the rejection region
d. Not enough information is given to answer this question.
ANS: A PTS: 1

51. Read the t statistic from the table of t distributions and circle the correct answer. A two-tailed test, a
sample of 20 at a .20 level of significance; t =
a. 1.328
b. 2.539
c. 1.325
d. 2.528
ANS: A PTS: 1
52. Read the t statistic from the table of t distributions and circle the correct answer. A one-tailed test
(upper tail), a sample size of 18 at a .05 level of significance t =
a. 2.12
b. 1.734
c. -1.740
d. 1.740
ANS: D PTS: 1

53. Read the t statistic from the table of t distributions and circle the correct answer. A one-tailed test
(lower tail), a sample size of 10 at a .10 level of significance; t =
a. 1.383
b. -1.372
c. -1.383
d. -2.821
ANS: C PTS: 1

54. Excel's __________ function can be used to calculate a p-value for a hypothesis test when  is
unknown.
a. RAND
b. T.DIST
c. NORM.S.DIST
d. Not enough information is given to answer this question.
ANS: B PTS: 1

55. The school's newspaper reported that the proportion of students majoring in business is at least 30%.
You plan on taking a sample to test the newspaper's claim. The correct set of hypotheses is
a. H0: p < 0.30 Ha: p  0.30
b. H0: p  0.30 Ha: p > 0.30
c. H0: p  0.30 Ha: p < 0.30
d. H0: p > 0.30 Ha: p  0.30
ANS: C PTS: 1

56. In the past, 75% of the tourists who visited Chattanooga went to see Rock City. The management of
Rock City recently undertook an extensive promotional campaign. They are interested in determining
whether the promotional campaign actually increased the proportion of tourists visiting Rock City. The
correct set of hypotheses is
a. H0: p > 0.75 Ha: p  0.75
b. H0: p < 0.75 Ha: p  0.75
c. H0: p  0.75 Ha: p < 0.75
d. H0: p  0.75 Ha: p > 0.75
ANS: D PTS: 1

57. The academic planner of a university thinks that at least 35% of the entire student body attends
summer school. The correct set of hypotheses to test his belief is
a. H0: p > 0.35 Ha: p  0.35
b. H0: p  0.35 Ha: p > 0.35
c. H0: p  0.35 Ha: p < 0.35
d. H0: p > 0.35 Ha: p  0.35
ANS: C PTS: 1
58. Which Excel function would not be appropriate to use when conducting a hypothesis test for a
population proportion?
a. NORM.S.DIST
b. COUNTIF
c. STDEV
d. All are appropriate.
ANS: C PTS: 1

Exhibit 9-1

n = 36 H0:   20
= 24.6 Ha:   20
 = 12

59. Refer to Exhibit 9-1. The test statistic equals

a. 2.3
b. 0.38
c. -2.3
d. -0.38
ANS: A PTS: 1

60. Refer to Exhibit 9-1. The p-value is

a. 0.5107
b. 0.0214
c. 0.0107
d. 2.1
ANS: C PTS: 1

61. Refer to Exhibit 9-1. If the test is done at a .05 level of significance, the null hypothesis should
a. not be rejected
b. be rejected
c. Not enough information is given to answer this question.
d. None of the other answers are correct.
ANS: B PTS: 1

Exhibit 9-2
The manager of a grocery store has taken a random sample of 100 customers. The average length of
time it took the customers in the sample to check out was 3.1 minutes. The population standard
deviation is known to be 0.5 minutes. We want to test to determine whether or not the mean waiting
time of all customers is significantly more than 3 minutes.

62. Refer to Exhibit 9-2. The test statistic is

a. 1.96
b. 1.64
c. 2.00
d. 0.056
ANS: C PTS: 1

63. Refer to Exhibit 9-2. The p-value is

 a. 0.025
b. 0.0456
c. 0.05
d. 0.0228
ANS: D PTS: 1

64. Refer to Exhibit 9-2. At a .05 level of significance, it can be concluded that the mean of the population
is
a. significantly greater than 3
b. not significantly greater than 3
c. significantly less than 3
d. significantly greater then 3.18
ANS: A PTS: 1

Exhibit 9-3

n = 49 H0:  = 50
= 54.8 Ha:   50
 = 28

65. Refer to Exhibit 9-3. The test statistic equals

a. 0.1714
b. 0.3849
c. -1.2
d. 1.2
ANS: D PTS: 1

66. Refer to Exhibit 9-3. The p-value is equal to

a. 0.1151
b. 0.3849
c. 0.2698
d. 0.2302
ANS: D PTS: 1

67. Refer to Exhibit 9-3. If the test is done at a 5% level of significance, the null hypothesis should
a. not be rejected
b. be rejected
c. Not enough information given to answer this question.
d. None of the other answers are correct.
ANS: A PTS: 1

Exhibit 9-4
A random sample of 16 students selected from the student body of a large university had an average
age of 25 years. We want to determine if the average age of all the students at the university is
significantly different from 24. Assume the distribution of the population of ages is normal with a
standard deviation of 2 years.

68. Refer to Exhibit 9-4. The test statistic is

a. 1.96
b. 2.00
 c. 1.645
d. 0.05
ANS: B PTS: 1

69. Refer to Exhibit 9-4. At a .05 level of significance, it can be concluded that the mean age is
a. not significantly different from 24
b. significantly different from 24
c. significantly less than 24
d. significantly less than 25
ANS: A PTS: 1

Exhibit 9-5

n = 16 H0:   80
= 75.607 Ha:   80
 = 8.246

Assume population is normally distributed.

70. Refer to Exhibit 9-5. The test statistic equals

a. -2.131
b. -0.53
c. 0.53
d. 2.131
ANS: A PTS: 1

71. Refer to Exhibit 9-5. The p-value is equal to

a. -0.0166
b. 0.0166
c. 0.0332
d. 0.9834
ANS: B PTS: 1

72. Refer to Exhibit 9-5. If the test is done at a 2% level of significance, the null hypothesis should
a. not be rejected
b. be rejected
c. Not enough information is given to answer this question.
d. None of the other answers are correct.
ANS: A PTS: 1

Exhibit 9-6
A random sample of 100 people was taken. Eighty of the people in the sample favored Candidate A.
We are interested in determining whether or not the proportion of the population in favor of Candidate
A is significantly more than 75%.

73. Refer to Exhibit 9-6. The test statistic is

a. 0.80
b. 0.05
c. 1.25
d. 2.00
 ANS: C PTS: 1

74. Refer to Exhibit 9-6. The p-value is

a. 0.2112
b. 0.05
c. 0.025
d. 0.0156
ANS: D PTS: 1

75. Refer to Exhibit 9-6. At a .05 level of significance, it can be concluded that the proportion of the
population in favor of candidate A is
a. significantly greater than 75%
b. not significantly greater than 75%
c. significantly greater than 80%
d. not significantly greater than 80%
ANS: A PTS: 1

76. For a two-tailed hypothesis test about a population mean, the null hypothesis can be rejected if the
confidence interval
a. is symmetric
b. is non-symmetric
c. includes 0
d. does not include 0
ANS: D PTS: 1

77. In a two-tailed hypothesis test, the null hypothesis should be rejected if the p-value is
a. less than or equal to 
b. less than or equal to 2
c. greater than or equal to 
d. greater than or equal to 2
ANS: A PTS: 1

78. If a hypothesis test has a Type I error probability of .05, that means
a. if the null hypothesis is false, it will not be rejected 5% of the time
b. if the null hypothesis is false, it will be rejected 5% of the time
c. if the null hypothesis is true, it will not be rejected 5% of the time
d. if the null hypothesis is true, it will be rejected 5% of the time
ANS: D PTS: 1

79. For a two-tailed hypothesis test with a test statistic value of z = 2.05, the p-value is
a. .0101
b. .0202
c. .0404
d. .4899
ANS: C PTS: 1

80. The rejection region for a one-tailed hypothesis test

a. has an area of 1 - 
b. has an area equal to the confidence coefficient
 c. is in the tail that supports the null hypothesis
d. is in the tail that supports the alternative hypothesis
ANS: D PTS: 1

81. The smaller the p-value,

a. the greater the evidence against H0
b. the greater the chance of committing a Type II error
c. the greater the chance of committing a Type I error
d. the less likely you are to reject H0
ANS: A PTS: 1

PROBLEM

1. A researcher is testing a new painkiller that claims to relieve pain in less than 15 minutes, on average.
a. State the hypotheses associated with the researcher's test.
b. Describe a Type I error for this situation.
c. Describe a Type II error for this situation.

ANS:
a. H0:   15
Ha:   15
b. A Type I error for this situation would be to incorrectly conclude that the average pain relief
time is less than 15 minutes.
c. A Type II error for this situation would be to fail to conclude that the average relief time is
less than 15 minutes when the average relief time actually is less than 15 minutes.

PTS: 1

2. At a certain manufacturing plant, a machine produced ball bearings that should have a diameter of 0.50
mm. If the machine produces ball bearings that are either too small or too large, the ball bearings must
be scrapped. Every hour, a quality control manager takes a random sample of 30 ball bearings to test to
see if the process is "out of control" (i.e. to test to see if the average diameter differs from 0.50 mm).
a. State the hypotheses associated with the manager's test.
b. Describe a Type I error for this situation.
c. Describe a Type II error for this situation.

ANS:
a. H0:  = 0.50
Ha:   0.50
b. A Type I error for this situation would be to incorrectly conclude that the process is out of
control.
c. A Type II error for this situation would be to fail to conclude that an out of control process is
out of control.

PTS: 1

3. A fast food restaurant is considering a promotion that will offer customers to purchase a toy featuring a
cartoon movie character. If more than 20% of the customers purchase the toy, the promotion will be
profitable. A sample of 50 restaurants is used to test the promotion.
a. State the hypotheses associated with the restaurant's test.
b. Describe a Type I error for this situation.
 c. Describe a Type II error for this situation.

ANS:
a. H0: p  0.20
Ha: p  0.20
b. A Type I error for this situation would be to incorrectly conclude that the promotion would
be profitable.
c. A Type II error for this situation would be to conclude that the promotion would not be
profitable when more than 20% of customers would purchase the toy.

PTS: 1

4. The average gasoline price of one of the major oil companies has been $1.00 per gallon. Because of
shortages in production of crude oil, it is believed that there has been a significant increase in the
average price. In order to test this belief, we randomly selected a sample of 36 of the company's gas
stations and determined that the average price for the stations in the sample was $1.10. Assume that
the standard deviation of the population () is $0.12.
a. State the null and the alternative hypotheses.
b. Test the claim at  = .05.
c. What is the p-value associated with the above sample results?

ANS:
a. H0:   1
Ha:   1
b. z = 5; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that there has
been an increase in the average price
c. almost zero

PTS: 1

5. "D" size batteries produced by MNM Corporation have had a life expectancy of 87 hours. Because of
an improved production process, the company believes that there has been an increase in the life
expectancy of its "D" size batteries. A sample of 36 batteries showed an average life of 88.5 hours.
Assume from past information that it is known that the standard deviation of the population is 9 hours.
a. Use a 0.01 level of significance, and test to determine if there has been an increase in the life
expectancy of the "D" size batteries.
b. What is the p-value associated with the sample results? What is your conclusion, based on the
p-value?

ANS:
a. H0:   87
Ha:   87 z = 1; therefore do not reject H0, there is not sufficient evidence at  = .01 to
conclude that there has been an increase in the life expectancy in the "D" size batteries
b. p-value = 0.1587; therefore, do not reject H0 (same conclusion as part a)

PTS: 1

6. At a local university, a sample of 49 evening students was selected in order to determine whether the
average age of the evening students is significantly different from 21. The average age of the students
in the sample was 23 years. The population standard deviation is known to be 3.5 years. Determine
whether or not the average age of the evening students is significantly different from 21. Use a 0.1
level of significance.
 ANS:
H0:  = 21
Ha:   21 z = 4; therefore, reject H0, there is sufficient evidence at  = .1 to conclude that the
average age of the evening students is significantly different from 21

PTS: 1

7. In order to determine the average price of hotel rooms in Atlanta, a sample of 64 hotels was selected. It
was determined that the average price of the rooms in the sample was $112. The population standard
deviation is known to be $16. Use a 0.05 level of significance and determine whether or not the
average room price is significantly different from $108.50.

ANS:
H0:  = 108.50
Ha:   108.50 z = 1.75; therefore, do not reject H0, there is not sufficient evidence at  = .05 to
conclude that the average room price is significantly different from $108.50.

PTS: 1

8. A sample of 81 account balances of a credit company showed an average balance of $1,200. The
population standard deviation is $126. You want to determine if the mean of all account balances is
significantly different from $1,150. Use a .05 level of significance.

ANS:
H0:  = 1150
Ha:   1150 z = 3.57; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that
the mean of all account balances is significantly different from $1,150.

PTS: 1

9. A lathe is set to cut bars of steel into lengths of 6 centimeters. The lathe is considered to be in perfect
adjustment if the average length of the bars it cuts is 6 centimeters. A sample of 121 bars is selected
randomly and measured. It is determined that the average length of the bars in the sample is 6.08
centimeters. The population standard deviation is 0.44 centimeters. Determine whether or not the lathe
is in perfect adjustment. Use a .05 level of significance.

ANS:
H0:  = 6
Ha:   6 z = 2; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that the lathe
is not in perfect adjustment.

PTS: 1

10. Bastien, Inc. has been manufacturing small automobiles that have averaged 50 miles per gallon of
gasoline in highway driving. The company has developed a more efficient engine for its small cars and
now advertises that its new small cars average more than 50 miles per gallon in highway driving. An
independent testing service road-tested 36 of the automobiles. The sample showed an average of 51.5
miles per gallon. The population standard deviation is 6 miles per gallon.
a. With a 0.05 level of significance, test to determine whether or not the manufacturer's
advertising campaign is legitimate.
b. What is the p-value associated with the sample results?
 ANS:
a. H0:   50
Ha:   50 z = 1.5, therefore, do not reject H0, there is not sufficient evidence at  = .05 to
conclude that the new cars average more than 50 miles per gallon.
b. 0.0668

PTS: 1

11. A carpet company advertises that it will deliver your carpet within 15 days of purchase. A sample of
49 past customers is taken. The average delivery time in the sample was 16.2 days. Assume the
population standard deviation is known to be 5.6 days.
a. State the null and alternative hypotheses.
b. Using a critical value, test the null hypothesis at the 5% level of significance.
c. Using a p-value, test the hypothesis at the 5% level of significance.
d. What type of error may have been committed for this hypothesis test?

ANS:
a. H0:   15
Ha:   15
b. Do not reject H0, 1.5  1.645, there is not sufficient evidence at  = .05 to conclude that the
average delivery time is more than what is advertised
c. Do not reject H0, 0.0668  0.05 (same conclusion as part b)
d. A Type II error may have been committed since we did not reject H0

PTS: 1

12. A student believes that the average grade on the statistics final examination is 87. A sample of 36 final
examinations is taken. The average grade in the sample is 83.96. The population variance is 144.
a. State the null and alternative hypotheses.
b. Using a critical value, test the hypothesis at the 5% level of significance.
c. Using a p-value, test the hypothesis at the 5% level of significance.
d. Using a confidence interval, test the hypothesis at the 5% level of significance.
e. Compute the probability of a Type II error if the average grade on the final is 85.

ANS:
a. H0:  = 87
Ha:   87
b. Do no reject H0, -1.96  -1.52  1.96, there is not sufficient evidence at  = .05 to conclude
that the average statistics final exam grade differs from 87
c. Do not reject H0, 0.1286  0.05 (same conclusion as part b)
d. 80.04 to 87.88; do not reject H0 (same conclusion as part b)
e. 0.8315

PTS: 1

13. A carpet company advertises that it will deliver your carpet within 15 days of purchase. A sample of
49 past customers is taken. The average delivery time in the sample was 16.2 days. The population
standard deviation is 5.6 days.
a. State the null and alternative hypotheses.
b. Using a critical value, test the null hypothesis at the 5% level of significance.
c. Using a p-value, test the hypothesis at the 5% level of significance.
d. Compute the probability of a Type II error if the true average delivery time is 17 days after
 purchase.

ANS:
a. H0:   15
Ha:   15
b. Do not reject H0, 1.5  1.645
c. Do not reject H0, 0.0668  0.05
d. 0.1949

PTS: 1

14. The sponsors of televisions shows targeted at the market of 5 - 8 year olds want to test the hypothesis
that children watch television at most 20 hours per week. The population of viewing hours per week is
known to be normally distributed with a standard deviation of 6 hours. A market research firm
conducted a random sample of 30 children in this age group. The resulting data follows:

19.5 29.7 17.5 10.4 19.4 18.4

14.6 10.1 12.5 18.2 19.1 30.9
22.2 19.8 11.8 19.0 27.7 25.3
27.4 26.5 16.1 21.7 20.6 32.9
27.0 15.6 17.1 19.2 20.1 17.7

At a .10 level of significance, use Excel to test the sponsors' hypothesis.

ANS:

A B C D Values for D
1 Hours Sample Size =COUNT(A2:A31) 30
2 19.5 Sample Mean =AVERAGE(A2:A31) 20.266667
3 14.6
4 22.2 Popul. Std. Dev. 6 6
5 27.4 Hypothesized Value 20 20
6 27.0
7 29.7 Standard Error =D4/SQRT(D1) 1.095445
8 10.1 Test Statistic z =(D2-D5)/D7 0.243432
9 19.8
10 26.5 p-value (Lower Tail) =NORM.S.DIST(D8,TRUE) 0.596165
11 15.6 p-value (Upper Tail) =1-D10 0.403835
12 17.5 p-value (Two Tail) =2*(MIN(D10,D11)) 0.807670
13 12.5

Do not reject H0, 0.403835 > .10, cannot conclude that children watch TV more than 20hrs/week at .10
level of significance.

PTS: 1

15. At a certain manufacturing plant, a machine produces ball bearings that should have a diameter of
0.500 mm. If the machine produces ball bearings that are either too small or too large, the ball bearings
must be scrapped. Every hour, a quality control manager takes a random sample of 36 ball bearings to
test to see if the process is "out of control" (i.e. to test to see if the average diameter differs from 0.500
mm). Assume that the process is maintaining the desired standard deviation of .06 mm. The results
from the latest sample follow:
 0.468 0.521 0.421 0.476 0.448 0.346
0.452 0.513 0.465 0.395 0.558 0.526
0.354 0.474 0.447 0.405 0.411 0.453
0.456 0.477 0.529 0.440 0.570 0.319
0.471 0.480 0.499 0.446 0.405 0.557
0.468 0.521 0.421 0.476 0.448 0.346

At a .01 level of significance, use Excel to test whether the process is "out of control."

ANS:

A B C D Values for D
1 Diameter Sample Size =COUNT(A2:A37) 36
2 0.468 Sample Mean =AVERAGE(A2:A37) 0.457278
3 0.452
4 0.354 Popul. Std. Dev. 0.06 0.06
5 0.456 Hypothesized Value 0.500 0.500
6 0.471
7 0.468 Standard Error =D4/SQRT(D1) 0.01
8 0.521 Test Statistic z =(D2-D5)/D7 -4.272223
9 0.513
10 0.474 p-value (Lower Tail) =NORM.S.DIST(D10,TRUE) 0.00001
11 0.477 p-value (Upper Tail) =1-NORM.S.DIST(D10,TRUE) 0.99999
12 0.480 p-value (TwoTail) =2*MIN(D12,D13) 0.00002
13 0.521

Reject H0, 0.00002 < .01, there is sufficient evidence at a = .01 to conclude that the process is out of
control.

PTS: 1

16. From a population of cans of coffee marked "12 ounces," a sample of 25 cans is selected and the
contents of each can are weighed. The sample revealed a mean of 11.8 ounces and a standard deviation
of 0.5 ounces. Test to see if the mean of the population is at least 12 ounces. (Assume the population is
normally distributed.) Use a .05 level of significance.

ANS:
H0:   12
Ha:   12 t = -2; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that the
population mean amount of coffee is less than 12 ounces

PTS: 1

17. In the past the average age of employees of a large corporation has been 40 years. Recently, the
company has been hiring older individuals. In order to determine whether there has been an increase in
the average age of all the employees, a sample of 25 employees was selected. The average age in the
sample was 45 years with a standard deviation of 5 years. Assume the distribution of the population is
normal. Let  = .05.
a. State the null and the alternative hypotheses.
b. Test to determine whether or not the mean age of all employees is significantly more than 40
years.
 ANS:
a. H0:   40
Ha:   40
b. t = 5; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that average age
of all employees of the large corporation has increased

PTS: 1

18. A soft drink filling machine, when in perfect adjustment, fills the bottles with 12 ounces of soft drink.
A random sample of 25 bottles is selected, and the contents are measured. The sample yielded a mean
content of 11.88 ounces, with a standard deviation of 0.24 ounces. With a 0.05 level of significance,
test to see if the machine is in perfect adjustment. Assume the distribution of the population is normal.

ANS:
H0:  = 12
Ha:   12 t = -2.5; therefore, reject H0, there is sufficient evidence at  = .05 to conclude that the
machine is not in perfect adjustment

PTS: 1

19. A sample of 16 cookies is taken to test the claim that each cookie contains at least 9 chocolate chips.
The average number of chocolate chips per cookie in the sample was 7.875 with a standard deviation
of 1. Assume the distribution of the population is normal.
a. State the null and alternative hypotheses.
b. Using a critical value, test the hypothesis at the 1% level of significance.
c. Using a p-value, test the hypothesis at the 1% level of significance.
d. Compute the probability of a Type II error if the true number of chocolate chips per cookie is 8.

ANS:
a. H0:   9
Ha:   9
b. Reject H0, -4.5  -2.602
c. Reject H0; the p-value is less than 0.005
d. A Type II error has not been committed since H0 was rejected.

PTS: 1

20. Nancy believes that the average running time of movies is equal to 140 minutes. A sample of 4 movies
was taken and the following running times were obtained. Assume the distribution of the population is
normally distributed.

150 150 180 170

a. State the null and alternative hypotheses.

b. Using a critical value, test the hypothesis at the 10% level of significance.
c. Using a p-value, test the hypothesis at the 10% level of significance.
d. Using a confidence interval, test the hypothesis at the 10% level of significance.
e. Could a Type II error have been committed in this hypothesis test?

ANS:
a. H0:  = 140
Ha:   140
 b. Reject H0, 3 > 2.353, there is sufficient evidence at  = .10 to conclude that the average
running time of movies differs from 140 minutes
c. The p-value is approximately equal to 0.06. Reject H0; 0.06 < 0.1 (same conclusion as part
b)
d. 144.85 to 180.15; Reject H0 (same conclusion as part b)
e. A Type II error could not have been committed since H0 was rejected.

PTS: 1

21. You are given the following information obtained from a random sample of 5 observations.

20 18 17 22 18

At a 10% level of significance, use Excel to determine whether or not the mean of the population from
which this sample was taken is significantly less than 21. (Assume the population is normally
distributed.)

ANS:

A B C D Value of D
1 x Sample Size =COUNT(A2:A6) 5
2 20 Sample Mean =AVERAGE(A2:A6) 19
3 18 Sample Std. Dev. =STDEV.S(A2:A6) 2
4 17
5 22 Hypoth. Value 21 21
6 18
7 Standard Error =D3/SQRT(D1) 0.8944272
8 Test Statistic t =(D2-D5)/D7 -2.236068
9 Degr. of Freedom =D1-1 4
10
11 p-value (Low. Tail) =T.DIST(D8,D9,TRUE) 0.04450
12 p-value (Up. Tail) =1-D11 0.95550
13 p-value (TwoTail) =2*MIN(D11,D12) 0.08901
14

Reject H0, .04450 <.10, there is sufficient evidence at  = .10 to conclude the population mean is
significantly less than 21.

PTS: 1

22. You are given the following information obtained from a random sample of 4 observations.

25 47 32 56

At a .05 level of significance, use Excel to determine whether or not the mean of the population from
which this sample was taken is significantly different from 48. (Assume the population is normally
distributed.)

ANS:

A B C D Values for D
1 x Sample Size =COUNT(A2:A5) 4
 2 25 Sample Mean =AVERAGE(A2:A5) 40
3 47 Sample Std. Dev. =STDEV.S(A2:A5) 14.07125
4 32
5 56 Hypothesized Value 48 48
6
7 Standard Error =D3/SQRT(D1) 7.03562
8 Test Statistic t =(D2-D5)/D7 -1.13707
9 Degrees of Freedom =D1-1 3
10
11 p-value (Lower Tail) =T.DIST(D8,D9,TRUE) 0.16906
12 p-value (Upper Tail) =1-D11 0.83094
13 p-value (Two Tail) =2*MIN(D11,D12) 0.33811
14

Do not reject H0, .33811 > .05, there is not sufficient evidence at  = .05 to conclude that the mean of
the population is significantly different from48.

PTS: 1

23. A group of young businesswomen wish to open a high fashion boutique in a vacant store, but only if
the average income of households in the area is more than $45,000. A random sample of 9 households
showed the following results.

$48,000 $44,000 $46,000

$43,000 $47,000 $46,000
$44,000 $42,000 $45,000

Use the statistical techniques in Excel to advise the group on whether or not they should locate the
boutique in this store. Use a .05 level of significance. (Assume the population is normally distributed.)

ANS:

A B C D Values for D
1 Income Sample Size =COUNT(A2:A10) 9
2 48000 Sample Mean =AVERAGE(A2:A10) 45000
3 44000 Sample Std. Dev. =STDEV.S(A2:A10) 1936.49167
4 46000
5 45000 Hypothesized Value 45000 45000
6 43000
7 47000 Standard Error =D3/SQRT(D1) 645.49722
8 46000 Test Statistic t =(D2-D5)/D7 0
9 42000 Degrees of Freedom =D1-1 8
10 44000
11 p-value (Lower Tail) =T.DIST(D8,D9,TRUE) 0.50000
12 p-value (Upper Tail) =1-D11 0.50000
13 p-value (TwoTail) =2*MIN(D11,D12) 1.00000
14

Do not reject H0 , 0.5 > .05, and advise the group not to locate the boutique at this store.

PTS: 1
24. In a television commercial, the manufacturer of a toothpaste claims that at least 4 out of 5 dentists
recommend its product. A consumer-protection group wants to test that claim. Identify the hypotheses.

ANS:
Ho: p  .8
Ha: p  .8

PTS: 1

25. A manufacturer is considering a new production method. The current method produces 94%
non-defective (good) parts. The new method will be implemented if it produces more non-defectives
than the current method. Identify the hypotheses.

ANS:
Ho: p  0.94
Ha: p  0.94

PTS: 1

26. Consider the following hypothesis test:

Ho: p = 0.5
Ha: p  0.5

A sample of 800 provided a sample proportion of 0.58.

a. Using  = 0.05, what is the rejection rule?
b. Determine the standard error of the proportion.
c. Compute the value of the test statistic z. What is your conclusion?
d. Determine the p-value.

ANS:
a. Reject H0 if z  -1.96 or if z  1.96
b. 0.01767
c. 4.53; reject H0, there is sufficient evidence at  = .05 to conclude that the population proportion
is significantly different from 0.5
d. zero

PTS: 1

27. A new soft drink is being market tested. A sample of 400 individuals participated in the taste test and
80 indicated they like the taste.
a. At a 5% significance level, test to determine if at least 22% of the population will like the new
soft drink.
b. Determine the p-value.

ANS:
a. H0: p  0.22
Ha: p  0.22 z = -0.97; therefore, do not reject H0, there is not sufficient evidence at  =
5% to conclude that fewer than 22% of the population like the new soft drink
b. 0.1587

PTS: 1
28. A student believes that no more than 20% (i.e.,  20%) of the students who finish a statistics course get
an A. A random sample of 100 students was taken. Twenty-four percent of the students in the sample
received A's.
a. State the null and alternative hypotheses.
b. Using a critical value, test the hypothesis at the 1% level of significance.
c. Using a p-value, test the hypothesis at the 1% level of significance.

ANS:
a. H0: p  0.2
Ha: p  0.2
b. Do not reject H0, 1 < 2.33, there is not sufficient evidence at  = 1% to conclude that more
than 20% of the students get an A.
c. Do not reject H0; 0.1587  0.01 (same conclusion as part b)

PTS: 1

29. For each shipment of parts a manufacturer wants to accept only those shipments with at most 10%
defective parts. A large shipment has just arrived. A quality control manager randomly selects 50 of
the parts from the shipment and finds that 6 parts are defective. Is this sufficient evidence to reject the
entire shipment? Use a .05 level of significance to conduct the appropriate hypothesis test.

ANS:
H0: p  0.10
Ha: p  0.10 Do not reject H0; .4714  1.645, there is not sufficient evidence at  = .05 to reject the
entire shipment

PTS: 1

30. A national poll reported that 58% of those with Internet access have made purchases online. To
investigate whether this percentage applies to its own state, a legislator commissions a study. A
random sample of 400 state residents who have Internet access is taken. Of those 400 respondents, 215
said that they have made purchases online. Does this sample provide sufficient evidence to conclude
that the state differs from the nation with respect to making purchases online? Use the p-value to
conduct the hypothesis test and use a .05 level of significance.

ANS:
H0: p = 0.58
Ha: p  0.58 Reject H0; p-value = .0446 < .05, there is sufficient evidence at  = .05 to conclude the
state differs from the nation with respect to making purchases online

PTS: 1

31. An official of a large national union claims that the fraction of women in the union is not significantly
different from one-half. Using the sample information reported below, carry out a test of this
statement. Use a .05 level of significance.

sample size 400

women 168
men 232

ANS:
H0: p = 0.5
 Ha: p  0.5 Reject H0; -3.2  -1.96, there is sufficient evidence at  = .05 to refute the union
official's claim

PTS: 1

32. A manufacturer claims that at least 40% of its customers use coupons. A study of 25 customers is
undertaken to test that claim. The results of the study follow.

yes no no yes yes

no yes no no yes
no no no no yes
no no no no yes
no no yes no yes

At a .05 level of significance, use Excel to test the manufacturer's claim.

ANS:

A B C D Values for D
1 Use Coupons? Sample Size =COUNTA(A2:A26) 25
2 yes Response of Interest Yes yes
3 no Count of Response =COUNTIF(A2:A26,D2) 9
4 no Sample Proportion =D3/D1 0.36
5 no
6 no Hypothesized Value 0.4 0.4
7 no
8 yes Standard Error =SQRT(D4*(1-D4)/D1) 0.096
9 no Test Statistic =(D4-D6)/D8 -0.41666667
10 no
11 no p-value (Lower Tail) =NORM.S.DIST(D9,TRUE) 0.338461157
12 no p-value (Upper Tail) =1-D11 0.661538843
13 no p-value (TwoTail) =2*MIN(D11,D12) 0.67692
14 no

Do not reject H0, .33846 > .05, there is not sufficient evidence at a = .05 to refute the manufacturer's
claim.

PTS: 1

33. Several years ago the proportion of Americans aged 18 - 24 who invested in the stock market was
0.20. A random sample of 25 Americans in this age group was recently taken. They were asked
whether or not they invested in the stock market. The results follow:

yes no no yes no
no yes no no yes
no no no no no
no no no yes no
no no yes no no

At a .05 level of significance, use Excel to determine whether or not the proportion of Americans 18 -
24 years old that invest in the stock market has changed.

ANS:
 A B C D Values for D
1 Invest? Sample Size =COUNTA(A2:A26) 25
2 Yes Response of Interest yes yes
3 No Count of Response =COUNTIF(A2:A26,D2) 6
4 no Sample Proportion =D3/D1 0.24
5 no
6 no Hypothesized Value 0.2 0.2
7 no
8 yes Standard Error =SQRT(D6*(1-D6)/D1) 0.08
9 no Test Statistic =(D4-D6)/D8 0.50
10 no
11 no p-value (Lower Tail) =NORM.S.DIST(D9,TRUE) 0.6914625
12 no p-value (Upper Tail) =1-D11 0.3085375
13 no p-value (TwoTail) =2*MIN(D11,D12) 0.6170750
14 no
15 no

Do not reject H0, .617 > .05, there is not sufficient evidence at a = .05 to conclude that the proportion
of 18 - 24 year old Americans who invest in stocks has changed.

PTS: 1

34. Identify the null and alternative hypotheses for the following problems.
a. The manager of a restaurant believes that it takes a customer no more than 25 minutes to eat
lunch.
b. Economists have stated that the marginal propensity to consume is at least 90¢ out of every
dollar.
c. It has been stated that 75 out of every 100 people who go to the movies on Saturday night buy
popcorn.

ANS:
a. H0:   25
Ha:  > 25
b. H0: p  0.9
Ha: p < 0.9
c. H0: p = 0.75
Ha: p  0.75

PTS: 1

35. Fast ‘n Clean operates 12 laundromats on the east side of the city. All of Fast ‘n Clean’s clothes
dryers have a label stating “20 minutes for $1.00.” You question the accuracy of the dryers’ clocks
and decide to conduct an observational study. You randomly select 36 dryers in several different Fast
‘n Clean locations, put $1.00 in each and time the drying cycle. The sample mean drying time is 20
minutes and 25 seconds. The manufacturer of the dryer states that the standard deviation for
20-minute drying cycles is 1 minute.
a. Using the sample data and  = .05, test the validity of the label on the dryers. Apply the p-value
and critical value approaches to conducting the two-tail hypothesis test.
b. Conduct the same two-tail hypothesis test, but this time use the confidence interval approach to
hypothesis testing.
Test Bank for Essentials of Modern Business Statistics, 5th Edition: David R. Anderson

ANS:
a. p-value = .0124 < .05, so reject H0:  = 20
z-score = 2.50 > 1.96, so reject H0:  = 20
b. confidence interval 20.09 to 20.74 does not include 20, so reject H0:  = 20

PTS: 1

36. The board of directors of a corporation has agreed to allow the human resources manager to move to
the next step in planning day care service for employees’ children if the manager can prove that at least
25% of the employees have interest in using the service. The HR manager polls 300 employees and
90 say they would seriously consider utilizing the service. At the  = .10 level of significance, is
there enough interest in the service to move to the next planning step?

ANS:
p-value = .0228 < .10, so reject H0: p = .25
z-score = 2.00 > 1.28, so reject H0: p = .25
yes, there is enough interest to move to the next step

PTS: 1

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