Course Title: Probability and Business Statistics II

Assignment #1
Sampling and Sampling Distributions

In each exercise, you should define the population, parameter(s) and variable of interest.

MCQs

1. Which of the following statements is NOT CORRECT?

(a) In a proper random sampling, every element of the population has a known (and often
equal) chance of being selected.
(b) The precision of a sample mean or sample proportion depends only upon the sample
size (and not the population size) in a proper random sample.
(c) Convenience sampling often leads to biases in estimates because the sample is often not
representative of the population.
(d) If a sample of 1,000,000 families is randomly selected from all of Canada (with about
8,000,000 families) and the average family income is computed, then the true value of
the family income for all families in Canada is known.
(e) The sampling distribution of the sample mean describes how the sample mean will vary
among repeated samples.

2. The Central Limit Theorem states that:

(a) if n is large then the distribution of the sample can be approximated closely by a normal
curve
(b) if n is large, and if the population is normal, then the variance of the sample mean must
be small.
(c) if n is large, then the sampling distribution of the sample mean can be approximated
closely by a normal curve
(d) if n is large, and if the population is normal, then the sampling distribution of the sample
mean can be approximated closely by a normal curve
(e) if n is large, then the variance of the sample must be small.

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 3. As the sample size gets larger, the standard error of the sampling distribution of the sample mean
gets larger as well.
(a) True.
(b) False.

4. The sampling distribution of refers to:

(a) the distribution of the various sample sizes which might be used in a given study
(b) the distribution of the different possible values of the sample mean together with their
respective probabilities of occurrence
(c) the distribution of the values of the items in the population
(d) the distribution of the values of the items actually selected in a given sample
(e) none of the above
(c) The probability that the true value of the population parameter falls between the bounds
of an already computed confidence interval is roughly 95%.
(d) If we consider all possible randomly selected samples of the same size from a
population, the 95% is the percentage of those samples for which the confidence interval includes
the population parameter.

5. The daily revenue at a university snack bar has been recorded for the past five years. Records indicate
that the mean daily revenue is $1500 and the standard deviation is $500. The distribution is skewed to the
right due to several high volume days (football game days). Suppose that 100 days are randomly selected
and the average daily revenue computed. Which of the following describes the sampling distribution of
the sample mean?
(a) normally distributed with a mean of $1500 and a standard deviation of $500
(b) normally distributed with a mean of $1500 and a standard deviation of $50
(c) normally distributed with a mean of $150 and a standard deviation of $50
(d) skewed to the right with a mean of $1500 and a standard deviation of $500

6. The time required to assemble an electronic component is normally distributed with a mean of 12 minutes
and a standard deviation of 1.5 min. Find the probability that the time required to assemble all nine
components (i.e. the total assembly time) is greater than 117 minutes.
(a) .2514
(b) .2486
(c) .4772
(d) .0228
(e) .0013

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 7. In a random sample of 1000 students, π= 0.80 (or 80%) were in favor of longer hours at the school library.
The standard error of p (the sample proportion) is
(a) 0.160
(b) 0.013
(c) 0.640
(d) 0.800

Exercise #1

The company decides to conduct an e-mail survey. A company wants to select a sample of 10 full-time workers
from a population of 800 full-time employees in order to collect information on expenditures concerning a
company-sponsored dental plan. How do you select a simple random sample?

Exercise #2

A city’s telephone book lists 100,000 people. If the telephone book is the frame for a study, how large would the
sample size be if systematic sampling were done on every 200th person?

Exercise #3

If every 11th item is systematically sampled to produce a sample size of 75 items, approximately how large is the
population?

Exercise #4

Suppose the age distribution in a city is as follows:

Under 18 22%
18–25 18%
26–50 36%
51–65 10%
Over 65 14%
A researcher is conducting proportionate stratified random sampling with a sample size of 250. Approximately
how many people should he sample from each stratum?

Exercise #5

Calculate the following probabilities using the standardized normal distribution Table

a. P(Z<1)

b. P(0<Z<1.25)
c. P(-1<Z<1)
d. P(Z>1.58)
e. P(Z>-2.35)

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Exercise #6

The assembly line that produces an electronic component of a missile system has historically resulted in a 2%
defective rate. A random sample of 800 components is drawn.
1. What is the probability that the defective rate is greater than 4%?
2. Suppose that in a random sample of 800 components the defective rate is 4%. What does that suggest
about the defective rate on the assembly line?
Exercise #7

A university bookstore claims that 50% of its customers are satisfied with the service and prices.
1. If this claim is true, what is the probability that in a random sample of 600 customers less than 45% are
satisfied?
2. Suppose that in a random sample of 600 customers, 270 express satisfaction with the bookstore. What
does this tell you about the bookstore's claim?

Exercise #8

The number of pizzas consumed per month by university students is normally distributed with a mean of 10 and a
standard deviation of 3.
1. What proportion of students consume more than 12 pizzas per month?
2. What is the probability that in a random sample of 25 students more than 275 pizzas are consumed?
Exercise #9

The baggage limit for an airplane is set at 100 pounds per passenger. Thus, for an airplane with 200 passenger
seats there would be a limit of 20,000 pounds. The weight of the baggage of an individual passenger is a random
variable with a mean of 95 pounds and a standard deviation of 35 pounds.

If we randomly select a random sample of size 50 in a particular flight and compute the passengers’ baggage
mean, what is the probability that sample mean will exceed the 100-pound limit?
Exercise #10

In an effort to cut costs and improve profits, many U.S. companies have been turning to outsourcing. In fact,
according to Purchasing magazine, 54% of companies surveyed outsourced some part of their manufacturing
process in the past two to three years. Suppose 565 of these companies are contacted.
1. What is the probability that 339 or more companies outsourced some part of their manufacturing process
in the past two to three years?
2. What is the probability that 288 or more companies outsourced some part of their manufacturing process
in the past two to three years?

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Exercise #11

The manufacturer of cans of Solomon that are supposed to have a net weight of 6 ounces tells you that the net
weight is actually a normal random variable with a mean of 6.05 ounces and a standard deviation of 0.18 ounces.
Suppose that you draw a random sample of 36 cans.

1. Find the probability that the mean weight of the sample is less than 5.97 ounces.
2. Suppose your random sample of 36 cans of solomon produced a mean weight that is less than 5.97 ounces.
Comment on the statement made by the manufacturer.

Exercise #12

An automatic machine in a manufacturing process is operating properly if the lengths of an important

subcomponent are normally distributed with mean = 117 cm and standard deviation = 5.2 cm.
1. Find the probability that one selected subcomponent is longer than 120 cm.
2. Find the probability that if four subcomponents are randomly selected, their mean length exceeds 120 cm.
3. Find the probability that if four subcomponents are randomly selected, all four have lengths that exceed
120 cm.

Exercise #13

A commercial for a manufacturer of household appliances claims that 3% of all its products require a service call
in the first year. A consumer protection association wants to check the claim by surveying 400 households that
recently purchased one of the company’s appliances.

1. What is the probability that more than 5% require a service call within the first year?

2. What would you say about the commercial’s honesty if in a random sample of 400 households 5% report
at least one service call?