B.

A Economics (H)

Intermediate Statistics for Economics

Semester –II

Questions for Assignment I

1. Suppose that a random sample of 50 bottles of a particular brand of cough syrup is selected
and the alcohol content of each bottle is determined. Let m denote the average alcohol content
for the population of all bottles of the brand under study. Suppose that the resulting 95%
confidence interval is (7.8, 9.4).
a. Would a 90% confidence interval calculated from this same sample have been narrower or
wider than the given interval? Explain your reasoning.
b. Consider the following statement: There is a 95% chance that m is between 7.8 and 9.4. Is
this statement correct? Why or why not?
c. Consider the following statement: We can be highly confident that 95% of all bottles of this
type of cough syrup have an alcohol content that is between 7.8 and 9.4. Is this
statement correct? Why or why not?
d. Consider the following statement: If the process of selecting a sample of size 50 and then
computing corresponding 95% interval is repeated 100 times, 95 of the resulting intervals
will include m. Is this statement correct? Why or why not?

2. Determine the t critical value for a two-sided confidence interval in each of the following
situations:
a. Confidence level 95%, df 10
b. Confidence level 95%, df 15
c. Confidence level 99%, df 15
d. Confidence level 99%, n 5
e. Confidence level 98%, df 24
f. Confidence level 99%, n 38
3. A sample of 20 students who had recently taken elementary statistics yielded the following
information on the brand of calculator owned (T Texas Instruments, H Hewlet Packard, C Casio,
S Sharp):
TTHTCTTSCH
SSTHCTTT HT
a. Estimate the true proportion of all such students who own Texas Instruments calculator.
b. Of the 10 students who owned a TI calculator, 4 has graphing calculators. Estimate the
proportion of students who do not own a TI graphing calculator.

4. A diagnostic test for a certain disease is applied to n individuals known to not have the disease.
Let X the number among the n test results that are positive (indicating presence of the disease, so
X is the number of false positives) and p the probability that a disease-free individual’s tesresult is
positive (i.e., p is the true proportion of test results from disease-free individuals that are positive).
Assume that only X is available rather than the actual sequence of test results.
a. Derive the maximum likelihood estimator of p. If n 20 and x 3, what is the estimate?
b. Is the estimator of part (a) unbiased?
c. If n 20 and x 3, what is the mle of the probability (1 p)5 that none of the next five tests done
on disease-free individuals are positive?

5. The shear strength of each of ten test spot welds is determined, yielding the following data (psi):
392 376 401 367 389 362 409 415 358 375
a. Assuming that shear strength is normally distributed, estimate the true average shear strength
and standard deviation of shear strength using the method of maximum likelihood.
b. Again assuming a normal distribution, estimate the strength value below which 95% of all
welds will have their strengths. [Hint: What is the 95th percentile in terms of and m s? Now use
the invariance principle.

6. Consider the following sample of observations on coating thickness for low-viscosity paint
(“Achieving a Target Value for a Manufacturing Process: A Case Study,” J. of Quality
Technology, 1992: 22–26):
.83 .88 .88 1.04 1.09 1.12 1.29 1.31
1.48 1.49 1.59 1.62 1.65 1.71 1.76 1.83
Assume that the distribution of coating thickness is normal (a normal probability plot strongly
supports this assumption).
a. Calculate a point estimate of the mean value of coating thickness, and state which estimator you
used.
b. Calculate a point estimate of the median of the coating thickness distribution, and state which
estimator you used.
c. Calculate a point estimate of the value that separates the largest 10% of all values in the
thickness distribution from the remaining 90%, and state which estimator you used. [Hint Express
what you are trying to estimate in terms of m and s.]
d. Estimate P(X 1.5), i.e., the proportion of all thickness values less than 1.5. [Hint: If you knew
the values of and s, you could calculate this probability. These values are not available, but they
can be estimated.]
e. What is the estimated standard error of the estimator that you used in part (b)?

Question for Assignment II

1. Explain various Parametric and Non- Parametric test using in statistics. Highlight the
importance of these tests and also describe the implication and interpretation if these tests?