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Berenson, Basic Business Statistics 5e

Chapter 9: Fundamentals of hypothesis testing: One-sample


tests
LO 9.1

1. True or False: The statement of the null hypothesis always contains an equality.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

2. True or False: For a given level of significance, if the sample size is increased, the power of the test will
increase.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

3. True or False: For a given level of significance, if the sample size is increased, the probability of committing a
Type I error will increase.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

4. True or False: For a given level of significance, if the sample size is increased, the probability of committing a
Type II error will increase.
A. True
B. False
Difficulty: Moderate

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic
Business Statistics 5e
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

5. True or False: For a given sample size, the probability of committing a Type II error will increase when the
probability of committing a Type I error is reduced.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

6. True or False: Suppose, in testing a hypothesis about a proportion, the p-value is computed to be 0.043. The
null hypothesis should be rejected if the chosen level of significance is 0.05.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

7. True or False: Suppose, in testing a hypothesis about a proportion, the p-value is computed to be 0.034. The
null hypothesis should be rejected if the chosen level of significance is 0.01.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

8. True or False: The test statistic measures how close the computed sample statistic has come to the
hypothesised population parameter.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

9. True or False: A region of non-rejection is sometimes called the critical region.


A. True
B. False
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

10. Which of the following would be an appropriate null hypothesis?


A. The mean of a sample is equal to 55.
B. The mean of a population is greater than 55.
C. The mean of a population is equal to 55.
D. Only A and C are appropriate.
Difficulty: Basic

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 2
Business Statistics 5e
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: C

11. Which of the following would be an appropriate null hypothesis?


A. The population proportion is less than 0.65.
B. The sample proportion is no less than 0.65.
C. The sample proportion is less than 0.65.
D. The population proportion is no less than 0.65.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

12. Which of the following would be an appropriate alternative hypothesis?


A. The mean of a sample is greater than 55.
B. The mean of a population is greater than 55.
C. The mean of a sample is equal to 55.
D. The mean of a population is equal to 55.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

13. Which of the following would be an appropriate alternative hypothesis?


A. The population proportion is less than 0.65.
B. The sample proportion is less than 0.65.
C. The sample proportion is no less than 0.65.
D. The population proportion is no less than 0.65.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

14. A Type II error is committed when


A. we reject a null hypothesis that is true.
B. we reject a null hypothesis that is false.
C. we don't reject a null hypothesis that is true.
D. we don't reject a null hypothesis that is false.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

15. A Type I error is committed when


A. we reject a null hypothesis that is false.
B. we don't reject a null hypothesis that is true.
C. we don't reject a null hypothesis that is false.
D. we reject a null hypothesis that is true.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 3
Business Statistics 5e
16. The power of a test is measured by its capability of
A. not rejecting a null hypothesis that is false.
B. rejecting a null hypothesis that is true.
C. rejecting a null hypothesis that is false.
D. not rejecting a null hypothesis that is true.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: C

17. If the p-value is less than α in a two-tailed test,


A. the null hypothesis should not be rejected.
B. a one-tailed test should be used.
C. no conclusion should be reached.
D. the null hypothesis should be rejected.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

18. If a test of hypothesis has a Type I error probability (α) of 0.01, it means that
A. if the null hypothesis is false, you reject it 1% of the time.
B. if the null hypothesis is true, you reject it 1% of the time.
C. if the null hypothesis is false, you don't reject it 1% of the time.
D. if the null hypothesis is true, you don't reject it 1% of the time.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

19. If the Type I error (α) for a given test is to be decreased, then for a fixed sample size n
A. the power of the test will increase.
B. the Type II error (β) will increase.
C. the Type II error (β) will also decrease.
D. a one-tailed test must be utilised.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

20. For a given sample size n, if the level of significance (α) is decreased, the power of the test
A. will decrease.
B. will increase.
C. will remain the same.
D. cannot be determined.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

21. For a given level of significance (α), if the sample size n is increased, the probability of a Type II error (β)
A. will increase.
B. will decrease.
C. will remain the same.

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 4
Business Statistics 5e
D. cannot be determined.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

22. It is possible to directly compare the results of a confidence interval estimate to the results obtained by
testing a null hypothesis if
A. a one-tailed test for μ is used.
B. a two-tailed test for μ is used.
C. Both of the previous statements are true.
D. None of the previous statements are true.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

23. If you know that the level of significance (α) of a test is 5%, you can tell that the probability of committing a
Type II error (β) is
A. 95%.
B. 97.5%.
C. 2.5%.
D. unknown.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

24. If you know that the probability of committing a Type II error (β) is 5%, you can tell that the power of the
test is
A. 95%.
B. 97.5%.
C. 2.5%.
D. unknown.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

25. The power of a statistical test is


A. the probability of not rejecting H0 when it is false.
B. the probability of rejecting H0 when it is false.
C. the probability of not rejecting H0 when it is true.
D. the probability of rejecting H0 when it is true.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

26. The symbol for the power of a statistical test is


A. α.
B. 1 – α.
C. β.

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 5
Business Statistics 5e
D. 1 – β.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

27. The symbol for the probability of committing a Type I error of a statistical test is
A. α.
B. 1 - α.
C. β.
D. 1 - β.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

28. The symbol for the level of significance of a statistical test is


A. α.
B. 1 - α.
C. β.
D. 1 - β.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

29. The symbol for the probability of committing a Type II error of a statistical test is
A. α.
B. 1 - α.
C. β.
D. 1 - β.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: C

30. The symbol for the confidence coefficient of a statistical test is


A. α.
B. 1 - α.
C. β.
D. 1 - β.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

31. Which of the following statements is NOT true about the level of significance in a hypothesis test?
A. The significance level is also called the α level.
B. The level of significance is the maximum risk we are willing to accept in making a Type I error.
C. The larger the level of significance, the more likely you are to reject the null hypothesis.
D. The significance level is another name for Type II error.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 6
Business Statistics 5e
Answer: D

32. If, as a result of a hypothesis test, you reject the null hypothesis when it is false, then you have committed
A. a Type II error.
B. an acceptance error.
C. a Type I error.
D. no error.
Difficulty: Moderate
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

33. A [Blank] is a numerical quantity computed from the data of a sample and is used in reaching a decision on
whether or not to reject the null hypothesis.
A. significance level
B. parameter
C. critical value
D. test statistic
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

Instruction 9-1

A student claims that she can correctly identify whether a person is studying a business or science major by
the way the person dresses. Suppose in actuality that if someone is studying a business major, she can
correctly identify that person as a business student 87% of the time. When a person is studying a science
major, the student will incorrectly identify that person as a business student 16% of the time. Presented with
one person and asked to identify the area of study of this person (who is studying either a business or science
major), she considers this to be a hypothesis test with the null hypothesis being that the person is a business
student and the alternative that the person is a science student.

34. Referring to Instruction 9-1, what would be a Type I error?


A. Saying that the person is a business student when in fact the person is a business student.
B. Saying that the person is a science student when in fact the person is a business student.
C. Saying that the person is a science student when in fact the person is a science student.
D. Saying that the person is a business student when in fact the person is a science student.
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: B

35. Referring to Instruction 9-1, what would be a Type II error?


A. Saying that the person is a science student when in fact the person is a business student.
B. Saying that the person is a science student when in fact the person is a science student.
C. Saying that the person is a business student when in fact the person is a business student.
D. Saying that the person is a business student when in fact the person is a science student.
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

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Business Statistics 5e
36. Referring to Instruction 9-1, what is the "actual level of significance" of the test?
A. 0.13
B. 0.16
C. 0.84
D. 0.87
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: A

37. Referring to Instruction 9-1, what is the "actual confidence coefficient"?


A. 0.13
B. 0.16
C. 0.84
D. 0.87
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: D

38. Referring to Instruction 9-1, what is the value of α?


A. 0.13
B. 0.16
C. 0.84
D. 0.87
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Analytical Thinking
Answer: A

39. Referring to Instruction 9-1, what is the value of β?


A. 0.13
B. 0.16
C. 0.84
D. 0.87
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Analytical Thinking
Answer: B

40. Referring to Instruction 9-1, what is the power of the test?


A. 0.13
B. 0.16
C. 0.84
D. 0.87
Difficulty: Complex
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Analytical Thinking
Answer: C

41. If a researcher rejects a true null hypothesis, she has made a [Blank] error.
Difficulty: Basic

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 8
Business Statistics 5e
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: Type I

42. If a researcher accepts a true null hypothesis, she has made a [Blank] decision.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: correct

43. If a researcher rejects a false null hypothesis, she has made a [Blank] decision.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: correct

44. If a researcher accepts a false null hypothesis, she has made a [Blank] error.
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: Type II

45. The value that separates a rejection region from a non-rejection region is called the [Blank].
Difficulty: Basic
Learning Outcome: 9.1 Identify the basic principles of hypothesis testing.
AACSB: Application of Knowledge
Answer: critical value

LO 9.2

46. True or False: The larger is the p-value, the more likely one is to reject the null hypothesis.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

47. True or False: The smaller is the p-value, the stronger is the evidence against the null hypothesis.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

48. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 20 versus the alternative hypothesis that the mean of the population differs
from 20, the null hypothesis could be rejected at a level of significance of 0.05.

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 9
Business Statistics 5e
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

49. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 18 versus the alternative hypothesis that the mean of the population differs
from 18, the null hypothesis could be rejected at a level of significance of 0.05.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

50. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 20 versus the alternative hypothesis that the mean of the population differs
from 20, the null hypothesis could be rejected at a level of significance of 0.10.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

51. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 20 versus the alternative hypothesis that the mean of the population differs
from 20, the null hypothesis could be rejected at a level of significance of 0.02.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

52. True or False: A sample is used to obtain a 95% confidence interval for the mean of a population. The
confidence interval goes from 15 to 19. If the same sample had been used to test the null hypothesis that the
mean of the population is equal to 20 versus the alternative hypothesis that the mean of the population differs
from 20, the null hypothesis could be accepted at a level of significance of 0.01.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge

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Business Statistics 5e
Answer: B

53. If an economist wishes to determine whether there is evidence that average family income in a community
equals $50,000
A. a two-tailed test should be utilised.
B. either a one-tailed or two-tailed test could be used with equivalent results.
C. a one-tailed test should be utilised.
D. None of the above.
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

54. An entrepreneur is considering the purchase of a coin-operated laundry. The current owner claims that
over the past five years, the average daily revenue was $675 with a standard deviation of $75. A sample of 30
days reveals a daily average revenue of $625. If you were to test the null hypothesis that the daily average
revenue was $675 and decide not to reject the null hypothesis, what can you conclude?
A. There is enough evidence to conclude that the daily average revenue was $675.
B. There is not enough evidence to conclude that the daily average revenue was $675.
C. There is not enough evidence to conclude that the daily average revenue was not $675.
D. There is enough evidence to conclude that the daily average revenue was not $675.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

Instruction 9-2

Microsoft® Excel was used on a set of data involving the number of parasites found in a random sample of 46
Blue Tiger butterflies captured in Kakadu National Park. A biologist wants to know if the mean number of
parasites per butterfly is greater than 20. She will make her decision using a test with a level of significance of
0.10. The following information was extracted from the Microsoft® Excel output for the sample of 46
butterflies:

n = 46; Arithmetic Mean = 28.00; Standard Deviation = 25.92; Standard Error = 3.82;
Null Hypothesis: H0: μ ≤ 20.000; α = 0.10; df = 45; T Test Statistic = 2.09;
One-Tailed Test Upper Critical Value = 1.3006; p-value = 0.021; Decision = Reject.

55. Referring to Instruction 9-2, the power of the test is [Blank] if the mean number of parasites per butterfly
on Blue Tiger butterflies in Kakadu National Park is 18 using a 0.1 level of significance and assuming that the
population standard deviation is 25.92.
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0355

56. Referring to Instruction 9-2, the probability of committing a Type II error is [Blank] if the mean number of

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 11
Business Statistics 5e
parasites per butterfly on Blue Tiger butterflies in Kakadu National Park is 18 using a 0.1 level of significance
and assuming that the population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9645

57. Referring to Instruction 9-2, the power of the test is [Blank] if the mean number of parasites per butterfly
on Blue Tiger butterflies in Kakadu National Park is 30 using a 0.1 level of significance and assuming that the
population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9091

58. Referring to Instruction 9-2, the probability of committing a Type II error is [Blank] if the mean number of
parasites per butterfly on Blue Tiger butterflies in Kakadu National Park is 30 using a 0.1 level of significance
and assuming that the population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0909

59. Referring to Instruction 9-2, the power of the test is [Blank] if the mean number of parasites per butterfly
on Blue Tiger butterflies in Kakadu National Park is 18 using a 0.05 level of significance and assuming that the
population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0151

60. Referring to Instruction 9-2, the probability of committing a Type II error is [Blank] if the mean number of
parasites per butterfly on Blue Tiger butterflies in Kakadu National Park is 18 using a 0.05 level of significance
and assuming that the population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9849

61. Referring to Instruction 9-2, the power of the test is [Blank] if the mean number of parasites per butterfly
on Blue Tiger butterflies in Kakadu National Park is 30 using a 0.05 level of significance and assuming that the
population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.8344

62. Referring to Instruction 9-2, the probability of committing a Type II error is [Blank] if the mean number of

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 12
Business Statistics 5e
parasites per butterfly on Blue Tiger butterflies in Kakadu National Park is 30 using a 0.05 level of significance
and assuming that the population standard deviation is 25.92.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.1656

Instruction 9-3

An appliance manufacturer claims to have developed a compact microwave oven that consumes a mean of no
more than 250 W. From previous studies, it is believed that power consumption for microwave ovens is
normally distributed with a population standard deviation of 15 W. A consumer group has decided to try to
discover if the claim appears true. They take a sample of 20 microwave ovens and find that they consume a
mean of 257.3 W.

63. True or False: Referring to Instruction 9-3, for this test to be valid, it is necessary that the power
consumption for microwave ovens has a normal distribution.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

64. True or False: Referring to Instruction 9-3, the null hypothesis will be rejected at 5% level of significance.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

65. True or False: Referring to Instruction 9-3, the null hypothesis will be rejected at 1% level of significance.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

66. True or False: Referring to Instruction 9-3, the consumer group can conclude that there is enough evidence
to prove that the manufacturer's claim is not true when allowing for a 5% probability of committing a Type I
error.
A. True
B. False
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them

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Business Statistics 5e
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

67. Referring to Instruction 9-3, the population of interest is


A. the power consumption in the 20 microwave ovens.
B. the mean power consumption in the 20 microwave ovens.
C. the mean power consumption in all such microwave ovens.
D. the power consumption in all such microwave ovens.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: D

68. Referring to Instruction 9-3, the parameter of interest is


A. the mean power consumption of the 20 microwave ovens.
B. 257.3.
C. the mean power consumption of all such microwave ovens.
D. 250.
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

69. Referring to Instruction 9-3, the appropriate hypotheses to determine if the manufacturer's claim appears
reasonable are
A. H0: μ = 250 versus H1: μ ≠ 250.
B. H0: μ ≤ 250 versus H1: μ > 250.
C. H0: μ ≥ 250 versus H1: μ < 250.
D. H0: μ ≥ 257.3 versus H1: μ < 257.3.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

70. Referring to Instruction 9-3, for a test with a level of significance of 0.05, the critical value would be [Blank].
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: Z = 1.645

71. Referring to Instruction 9.3, the value of the test statistic is [Blank].
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 2.18

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Business Statistics 5e
72. Referring to Instruction 9-3, the p-value of the test is [Blank].
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0148 using Excel or 0.0146 using Instruction E.2

73. Referring to Instruction 9-3, what is the power of the test if the mean power consumption of all such
microwave ovens is in fact 257.3 W using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.7025

74. Referring to Instruction 9-3, what is the probability of making a Type II error if the mean power
consumption of all such microwave ovens is in fact 257.3 W using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.2975

75. Referring to Instruction 9-3, what is the power of the test if the mean power consumption of all such
microwave ovens is in fact 248 W using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0125

76. Referring to Instruction 9-3, what is the probability of making a Type II error if the mean power
consumption of all such microwave ovens is in fact 248 W using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9875

77. Referring to Instruction 9-3, what is the power of the test if the mean power consumption of all such
microwave ovens is in fact 257.3 W using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.8146

78. Referring to Instruction 9-3, what is the probability of making a Type II error if the mean power
consumption of all such microwave ovens is in fact 257.3 W using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.1854

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Business Statistics 5e
79. Referring to Instruction 9-3, what is the power of the test if the mean power consumption of all such
microwave ovens is in fact 248 W using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0302

80. Referring to Instruction 9-3, what is the probability of making a Type II error if the mean power
consumption of all such microwave ovens is in fact 248 W using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9698

Instruction 9-4

A drug company is considering marketing a new local anaesthetic. The effective time of the anaesthetic the
drug company is currently producing has a normal distribution with a mean of 7.4 minutes with a standard
deviation of 1.2 minutes. The chemistry of the new anaesthetic is such that the effective time should be
normal with the same standard deviation, but the mean effective time may be lower. If it is lower, the drug
company will market the new anaesthetic; otherwise, it will continue to produce the older drug. A sample of
size 36 results in a sample mean of 7.1. A hypothesis test will be done to help make the decision.

81. True or False: Referring to Instruction 9-4, the null hypothesis will be rejected with a level of significance of
0.10.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

82. True or False: Referring to Instruction 9-4, if the level of significance had been chosen as 0.05, the null
hypothesis would be rejected.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

83. True or False: Referring to Instruction 9-4, if the level of significance had been chosen as 0.05, the company
would market the new anaesthetic.
A. True
B. False
Difficulty: Moderate

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Business Statistics 5e
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

84. Referring to Instruction 9-4, the appropriate hypotheses are


A. H0: μ ≤ 7.4 versus H1: μ > 7.4.
B. H0: μ = 7.4 versus H1: μ ≠ 7.4.
C. H0: μ ≥ 7.4 versus H1: μ < 7.4.
D. H0: μ > 7.4 versus H1: μ ≤ 7.4.
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

85. Referring to Instruction 9-4, for a test with a level of significance of 0.10, the critical value would be [Blank].
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: -1.28

86. Referring to Instruction 9-4, the value of the test statistic is [Blank].
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: -1.50

87. Referring to Instruction 9-4, the p-value of the test is [Blank].


Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0668

88. Referring to Instruction 9-4, what is the power of the test if the mean effective time of the anaesthetic is 7.0
using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.6388

89. Referring to Instruction 9-4, what is the probability of making a Type II error if the mean effective time of
the anaesthetic is 7.0 using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.3612

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90. Referring to Instruction 9-4, what is the power of the test if the mean effective time of the anaesthetic is 7.5
using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0160

91. Referring to Instruction 9-4, what is the probability of making a Type II error if the mean effective time of
the anaesthetic is 7.5 using a 0.05 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9840

92. Referring to Instruction 9-4, what is the power of the test if the mean effective time of the anaesthetic is 7.0
using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.7638

93. Referring to Instruction 9-4, what is the probability of making a Type II error if the mean effective time of
the anaesthetic is 7.0 using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.2362

94. Referring to Instruction 9-4, what is the power of the test if the mean effective time of the anaesthetic is 7.5
using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0374

95. Referring to Instruction 9-4, what is the probability of making a Type II error if the mean effective time of
the anaesthetic is 7.5 using a 0.10 level of significance?
Difficulty: Complex
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.9626

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Business Statistics 5e
Instruction 9-5

A bank tests the null hypothesis that the mean age of the bank's mortgage holders is less than or equal to 45
years, versus an alternative that the mean age is greater than 45 years. They take a sample and calculate a p-
value of 0.0202.

96. True or False: Referring to Instruction 9-5, the null hypothesis would be rejected at a significance level of α
= 0.05.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

97. True or False: Referring to Instruction 9-5, the null hypothesis would be rejected at a significance level of α
= 0.01.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

98. True or False: Referring to Instruction 9-5, the bank can conclude that the average age is greater than 45 at
a significance level of α = 0.01.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

99. Referring to Instruction 9-5, if the same sample was used to test the opposite one-tailed test, what would
be that test's p-value?
A. 0.9596
B. 0.0202
C. 0.0404
D. 0.9798
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: D

Instruction 9-6

The quality control engineer for a furniture manufacturer is interested in the mean amount of force necessary
to produce cracks in stressed oak furniture. She performs a two-tailed test of the null hypothesis that the

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Business Statistics 5e
mean for the stressed oak furniture is 650. The calculated value of the Z test statistic is a positive number that
leads to a p-value of 0.080 for the test.

100. True or False: Referring to Instruction 9-6, if the test is performed with a level of significance of 0.10, the
null hypothesis would be rejected.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

101. True or False: Referring to Instruction 9-6, if the test is performed with a level of significance of 0.10, the
engineer can conclude that the mean amount of force necessary to produce cracks in stressed oak furniture is
650.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

102. True or False: Referring to Instruction 9-6, if the test is performed with a level of significance of 0.05, the
null hypothesis would be rejected.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

103. True or False: Referring to Instruction 9-6, if the test is performed with a level of significance of 0.05, the
engineer can conclude that the mean amount of force necessary to produce cracks in stressed oak furniture is
650.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

104. True or False: Referring to Instruction 9-6, suppose the engineer had decided that the alternative
hypothesis to test was that the mean was greater than 650. Then if the test is performed with a level of
significance of 0.10, the null hypothesis would be rejected.
A. True
B. False
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge

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Business Statistics 5e
Answer: A

105. True or False: Referring to Instruction 9-6, suppose the engineer had decided that the alternative
hypothesis to test was that the mean was less than 650. Then if the test is performed with a level of
significance of 0.10, the null hypothesis would be rejected.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

106. Referring to Instruction 9-6, suppose the engineer had decided that the alternative hypothesis to test was
that the mean was greater than 650. What would be the p-value of this one-tailed test?
A. 0.040
B. 0.160
C. 0.960
D. 0.840
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

107. Referring to Instruction 9-6, suppose the engineer had decided that the alternative hypothesis to test was
that the mean was less than 650. What would be the p-value of this one-tailed test?
A. 0.160
B. 0.040
C. 0.840
D. 0.960
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: D

108. If an economist wishes to determine whether there is evidence that average family income in a
community exceeds $50,000
A. a two-tailed test should be utilised.
B. either a one-tailed or two-tailed test could be used with equivalent results.
C. a one-tailed test should be utilised.
D. None of the above.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

109. Suppose we wish to test H0: μ ≤ 47 versus H1: μ > 47. What will result if we conclude that the mean is
greater than 47 when its true value is really 52?
A. We have made a Type II error.
B. We have made a Type I error.
C. We have made a correct decision.

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Business Statistics 5e
D. None of the above are correct.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

110. Suppose you want to test H0: μ ≥ 30 versus H1: μ <≠ 30. Which of the following possible sample results
based on a sample of size 36 gives the strongest evidence to reject H0 in favour of H1?

A. = 32, S = 2
B. = 26, S = 9
C. = 28, S = 6
D. = 27, S = 4
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: D

111. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club.
She would now like to determine whether or not the mean age of her customers is greater than 30. If so, she
plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made.
The appropriate hypotheses to test are
A. H0: μ ≤ 30 versus H1: μ > 30.

B. H0: ≥ 30 versus H1: < 30.


C. H0: μ ≥ 30 versus H1: μ < 30.

D. H0: ≤ 30 versus H1: > 30.


Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

112. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club.
She would now like to determine whether or not the mean age of her customers is greater than 30. If so, she
plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made. If
she wants to have a level of significance at 0.01, what rejection region should she use?
A. Reject H0 if t < -2.58.
B. Reject H0 if t > 2.34.
C. Reject H0 if t > 2.58.
D. Reject H0 if t < -2.34.
Difficulty: Moderate
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

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Business Statistics 5e
Instruction 9-7

Microsoft® Excel was used on a set of data involving the number of parasites found in a random sample of 46
Blue Tiger butterflies captured in Kakadu National Park. A biologist wants to know if the mean number of
parasites per butterfly is greater than 20. She will make her decision using a test with a level of significance of
0.10. The following information was extracted from the Microsoft® Excel output for the sample of 46
butterflies:

n = 46; Arithmetic Mean = 28.00; Standard Deviation = 25.92; Standard Error = 3.82;
Null Hypothesis: H0: μ ≤ 20.000; α = 0.10; df = 45; T Test Statistic = 2.09;
One-Tailed Test Upper Critical Value = 1.3006; p-value = 0.021; Decision = Reject.

113. True or False: Referring to Instruction 9-7, the null hypothesis would be rejected.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

114. True or False: Referring to Instruction 9-7, the null hypothesis would be rejected if a 5% probability of
committing a Type I error is allowed.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

115. True or False: Referring to Instruction 9-7, the null hypothesis would be rejected if a 1% probability of
committing a Type I error is allowed.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

116. True or False: Referring to Instruction 9-7, the evidence proves beyond any doubt that the mean number
of parasites on butterflies in Kakadu National Park is greater than 20.
A. True
B. False
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

117. True of False: Referring to Instruction 9-7, the biologist can conclude that there is sufficient evidence to

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Business Statistics 5e
show that the mean number of parasites per butterfly is greater than 20 using a level of significance of 0.10.
A. True
B. False
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

118. True or False: Referring to Instruction 9-7, the biologist can conclude that there is sufficient evidence to
show that the mean number of parasites per butterfly is greater than 20 with no more than a 5% probability of
incorrectly rejecting the true null hypothesis.
A. True
B. False
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

119. True or False: Referring to Instruction 9-7, the biologist can conclude that there is sufficient evidence to
show that the mean number of parasites per butterfly is greater than 20 with no more than a 1% probability of
incorrectly rejecting the true null hypothesis.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

120. True or False: Referring to Instruction 9-7, if these data were used to perform a two-tailed test, the p-value
would be 0.042.
A. True
B. False
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

121. Referring to Instruction 9-7, the parameter the biologist is interested in is the
A. mean number of parasites on Blue Tiger butterflies in Kakadu National Park.
B. mean number of butterflies in Kakadu National Park.
C. proportion of butterflies with parasites.
D. mean number of parasites on these 46 butterflies.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

122. Referring to Instruction 9-7, the lowest level of significance at which the null hypothesis can be rejected is

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Business Statistics 5e
[Blank].
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.021

123. Referring to Instruction 9-7, state the alternative hypothesis for this study.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: H1: μ > 20,000

Instruction 9-8

A major home improvement store conducted its biggest brand recognition campaign in the company's history.
A series of new television advertisements featuring well-known entertainers and sports figures were launched.
A key metric for the success of television advertisements is the proportion of viewers who "like the ads a lot". A
study of 1,189 adults who viewed the ads reported that 230 indicated that they "like the ads a lot". The
percentage of a typical television advertisement receiving the "like the ads a lot" score is believed to be 22%.
Company officials wanted to know if there is evidence that the series of television advertisements are less
successful than the typical ad (i.e., if there is evidence that the population proportion of "like the ads a lot" for
the company's ads is less than 0.22) at a 0.01 level of significance.

124. True or False: Referring to Instruction 9-8, the null hypothesis would be rejected.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

125. True of False: Referring to Instruction 9-8, the company officials can conclude that there is sufficient
evidence to show that the series of television advertisements are less successful than the typical ad using a
level of significance of 0.01.
A. True
B. False
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

126. True or False: Referring to Instruction 9-8, the company officials can conclude that there is sufficient
evidence to show that the series of television advertisements are less successful than the typical ad using a
level of significance of 0.05.
A. True
B. False
Difficulty: Basic

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Business Statistics 5e
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

127. True or False: Referring to Instruction 9-8, the value of β is 0.90.


A. True
B. False
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

128. Referring to Instruction 9-8, the null hypothesis will be rejected if the test statistics is
A. less than -2.3263.
B. greater than 2.3263.
C. less than 2.3263.
D. greater than -2.3263.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: A

129. Referring to Instruction 9-8, the lowest level of significance at which the null hypothesis can be rejected is
[Blank].
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0135

130. Referring to Instruction 9-8, the largest level of significance at which the null hypothesis will not be
rejected is [Blank].
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: 0.0135

131. How many tissues should the Kimberly Clark Corporation package of Kleenex ® contain? Researchers
determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of
100 Kleenex® users yielded the following data on the number of tissues used during a cold: = 52, s = 22.
Give the null and alternative hypotheses to determine if the number of tissues used during a cold is less than
60.
A. H0: ≥ 60 and H1: < 60

B. H0: = 52 and H1: ≠ 52


C. H0: μ ≥ 60 and H1: μ < 60
D. H0: μ ≤ 60 and H1: μ > 60

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Business Statistics 5e
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

132. How many tissues should the Kimberly Clark Corporation package of Kleenex ® contain? Researchers
determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of
100 Kleenex® users yielded the following data on the number of tissues used during a cold: = 52, s = 22.
Using the sample information provided, calculate the value of the test statistic.
A. t = (52 - 60) / (22 / 100)
B. t = (52 - 60) / (22 / 1002)
C. t = (52 - 60) / 22
D. t = (52 - 60) / (22 / 10)
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: D

133. How many tissues should the Kimberly Clark Corporation package of Kleenex ® contain? Researchers
determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of
100 Kleenex® users yielded the following data on the number of tissues used during a cold: = 52, s = 22.
Suppose the alternative we wanted to test was H1: μ < 60. State the correct rejection region for α = 0.05.
A. Reject H0 if t > 1.9842 or Z < – 1.9842.
B. Reject H0 if t < – 1.6604.
C. Reject H0 if t < – 1.9842.
D. Reject H0 if t > 1.6604.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

134. How many tissues should the Kimberly Clark Corporation package of Kleenex ® contain? Researchers
determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of
100 Kleenex® users yielded the following data on the number of tissues used during a cold: = 52, s = 22.
Suppose the test statistic does fall in the rejection region at α = 0.05. Which of the following decision is correct?
A. At α = 0.05, we reject H0.
B. At α = 0.10, we do not reject H0.
C. At α = 0.05, we accept H0.
D. At α = 0.05, we do not reject H0.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

135. How many tissues should the Kimberly Clark Corporation package of Kleenex ® contain? Researchers
determined that 60 tissues is the average number of tissues used during a cold. Suppose a random sample of

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Business Statistics 5e
100 Kleenex® users yielded the following data on the number of tissues used during a cold: = 52, s = 22.
Suppose the test statistic does fall in the rejection region at α = 0.05. Which of the following conclusion is
correct?
A. At α = 0.05, there is not sufficient evidence to conclude that the average number of tissues used during
a cold is 60 tissues.
B. At α = 0.05, there is sufficient evidence to conclude that the average number of tissues used during a
cold is 60 tissues.
C. At α = 0.10, there is sufficient evidence to conclude that the average number of tissues used during a
cold is not 60 tissues.
D. At α = 0.05, there is not sufficient evidence to conclude that the average number of tissues used during
a cold is not 60 tissues.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

136. You have created a 95% confidence interval for μ with the result (10, 15). What decision will you make if
you test H0: μ = 16 versus H1: μ ≠ 16 at α = 0.05?
A. Reject H0 in favour of H1.
B. Accept H0 in favour of H1.
C. Fail to reject H0 in favour of H1.
D. Cannot tell what the decision will be from the information given.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

137. You have created a 95% confidence interval for μ with the result (10, 15). What decision will you make if
you test H0: μ = 16 versus H1: μ ≠ 16 at α = 0.10?
A. Reject H0 in favour of H1.
B. Accept H0 in favour of H1.
C. Fail to reject H0 in favour of H1.
D. Cannot tell what the decision will be from the information given.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

138. You have created a 95% confidence interval for μ with the result (10, 15). What decision will you make if
you test H0: μ = 16 versus H1: μ ≠ 16 at α = 0.01?
A. Reject H0 in favour of H1.
B. Accept H0 in favour of H1.
C. Fail to reject H0 in favour of H1.
D. Cannot tell what the decision will be from the information given.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: D

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Business Statistics 5e
139. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club.
She would now like to determine whether or not the mean age of her customers is greater than 30. If so, she
plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made.
Suppose she found that the sample mean was 30.45 years and the sample standard deviation was 5 years. If
she wants to have a level of significance at 0.01, what decision should she make?
A. Reject H0.
B. Fail to reject H0.
C. Accept H0.
D. We cannot tell what her decision should be from the information given.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

140. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club.
She would now like to determine whether or not the mean age of her customers is greater than 30. If so, she
plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made.
Suppose she found that the sample mean was 30.45 years and the sample standard deviation was 5 years. If
she wants to have a level of significance at 0.01, what conclusion can she make?
A. There is sufficient evidence that the mean age of her customers is not over 30.
B. There is not sufficient evidence that the mean age of her customers is not over 30.
C. There is not sufficient evidence that the mean age of her customers is over 30.
D. There is sufficient evidence that the mean age of her customers is over 30.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: C

141. The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of the club.
She would now like to determine whether or not the mean age of her customers is greater than 30. If so, she
plans to alter the entertainment to appeal to an older crowd. If not, no entertainment changes will be made.
Suppose she found that the sample mean was 30.45 years and the sample standard deviation was 5 years.
What is the p-value associated with the test statistic?
A. 0.3577
B. 0.1423
C. 0.0200
D. 0.0780
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: D

142. A manager of the credit department for an oil company would like to determine whether the average
monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts
and finds that the mean owed is $83.40 with a sample standard deviation of $23.65. If you were to conduct a
test to determine whether the auditor should conclude that there is evidence that the mean balance is
different from $75, which test would you use?
A. t test of a population proportion.
B. Z test of a population proportion.

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Business Statistics 5e
C. Z test of a population mean.
D. t test of a population mean.
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: D

143. A manager of the credit department for an oil company would like to determine whether the mean
monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts
and finds that the mean owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test
whether the mean balance is different from $75 and decided to reject the null hypothesis, what conclusion
could you reach?
A. There is evidence that the mean balance is not $75.
B. There is evidence that the mean balance is $75.
C. There is not evidence that the mean balance is not $75.
D. There is not evidence that the mean balance is $75.
Difficulty: Moderate
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: A

144. Referring to Instruction 9-1, what critical value should the biologist use to determine the rejection region?
A. 1.3011
B. 1.3006
C. 1.6794
D. 0.6800
Difficulty: Basic
Section: Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to
evaluate them and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

145. True or False: The power of a test is defined as 1 - α.


A. True
B. False
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: B

146. For an experiment, the probability of a Type I error is 0.05 and the probability of a Type II error is 0.20.
The power of the test is
A. 0.75.
B. 0.80.
C. 0.25.
D. 0.95.
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Analytical Thinking
Answer: B

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Business Statistics 5e
147. If all else remains equal, which of the following will increase the power of a t test?
A. Lower α.
B. Changing from a one-tail to a two-tail test.
C. Increased sample size.
D. Greater β.
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: C

148. The relationship between power and the probability of a Type I error, all else held constant, is that [Blank].
Difficulty: Basic
Learning Outcome: 9.2 Explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated.
AACSB: Application of Knowledge
Answer: allowing higher probability of a Type I error increases power

LO 9.3

149. True or False: Suppose, in testing a hypothesis about a proportion, the Z test statistic is computed to be
2.04. The null hypothesis should be rejected if the chosen level of significance is 0.01 and a two-tailed test is
used.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: B

150. An entrepreneur is considering the purchase of a coin-operated laundry. The current owner claims that
over the past five years, the average daily revenue was $675 with a standard deviation of $75. A sample of 30
days reveals a daily average revenue of $625. If you were to test the null hypothesis that the daily average
revenue was $675, which test would you use?
A. Z test of a population proportion.
B. t test of a population mean.
C. Z test of a population mean.
D. t test of a population proportion.
Difficulty: Moderate
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: C

151. A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this
claim against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a
random sample of 100 doctors' results in 83 who indicate that they recommend aspirin. The value of the test
statistic in this problem is approximately equal to
A. -0.07.
B. -2.33.
C. -1.86.

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Business Statistics 5e
D. -4.12.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: B

152. A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this
claim against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a
random sample of 100 doctors was selected. Suppose that the test statistic is –2.20. Can we conclude that H0
should be rejected at the (α = 0.10, (α = 0.05, and (α = 0.01 level of Type I error?
A. (a) yes; (b) yes; (c) yes
B. (a) no; (b) no; (c) no
C. (a) yes; (b) yes; (c) no
D. (a) no; (b) no; (c) yes
Difficulty: Moderate
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: C

153. A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this
claim against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a
random sample of 100 doctors was selected. Suppose you reject the null hypothesis. What conclusion can you
draw?
A. There is not sufficient evidence that the proportion of doctors who recommend aspirin is less than
0.90.
B. There is not sufficient evidence that the proportion of doctors who recommend aspirin is not less than
0.90.
C. There is sufficient evidence that the proportion of doctors who recommend aspirin is not less than
0.90.
D. There is sufficient evidence that the proportion of doctors who recommend aspirin is less than 0.90.
Difficulty: Moderate
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: D

154. A major DVD rental chain is considering opening a new store in an area that currently does not have any
such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area
own DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that
96 have DVD players. State the test of hypothesis that is of interest to the rental chain.
A. H0: π ≤ 5,000 versus H1: π > 5,000
B. H0: π ≤ 0.25 versus H1: π > 0.25
C. H0: π ≤ 0.32 versus H1: π > 0.32
D. H0: μ ≤ 5,000 versus H1: μ > 5,000
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: B

155. A major DVD rental chain is considering opening a new store in an area that currently does not have any
such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area
own DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that
96 have DVD players. The value of the test statistic in this problem is approximately equal to
A. 1.94.

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Business Statistics 5e
B. 1.30.
C. 2.60.
D. 2.80.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: D

156. A major DVD rental chain is considering opening a new store in an area that currently does not have any
such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area
own DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that
96 have DVD players. The p-value associated with the test statistic in this problem is approximately equal to
A. 0.0100.
B. 0.0026.
C. 0.0051.
D. 0.0013.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: B

157. A major DVD rental chain is considering opening a new store in an area that currently does not have any
such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area
own DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that
96 have DVD players. The decision on the hypothesis test using a 5% level of significance is
A. to accept H0 in favour of H1.
B. to fail to reject H0 in favour of H1.
C. to reject H0 in favour of H1.
D. We cannot tell what the decision should be from the information given.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: C

158. A major DVD rental chain is considering opening a new store in an area that currently does not have any
such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area
own DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that
96 have DVD players. The rental chain's conclusion from the hypothesis test using a 5% level of significance is
A. to delay opening a new store until additional evidence is collected.
B. not to open a new store.
C. to open a new store.
D. We cannot tell what the decision should be from the information given.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: C

159. The marketing manager for a car manufacturer is interested in determining the proportion of new
compact-car owners who would have purchased a passenger-side inflatable air bag if it had been available for
an additional cost of $300. The manager believes from previous information that the proportion is 0.30.
Suppose that a survey of 200 new compact-car owners is selected and 79 indicate that they would have
purchased the inflatable air bags. If you were to conduct a test to determine whether there is evidence that the
proportion is different from 0.30, which test would you use?

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Business Statistics 5e
A. Z test of a population mean.
B. t test of a population proportion.
C. Z test of a population proportion.
D. t test of a population mean.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: C

160. The marketing manager for a car manufacturer is interested in determining the proportion of new
compact-car owners who would have purchased a passenger-side inflatable air bag if it had been available for
an additional cost of $300. The manager believes from previous information that the proportion is 0.30.
Suppose that a survey of 200 new compact-car owners is selected and 79 indicate that they would have
purchased the inflatable air bags. If you were to conduct a test to determine whether there is evidence that the
proportion is different from 0.30 and decided not to reject the null hypothesis, what conclusion could you
draw?
A. There is not sufficient evidence that the proportion is not 0.30.
B. There is sufficient evidence that the proportion is 0.30.
C. There is sufficient evidence that the proportion is 0.40.
D. There is not sufficient evidence that the proportion is 0.30.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: A

Instruction 9-9

A major home improvement store conducted its biggest brand recognition campaign in the company's history.
A series of new television advertisements featuring well-known entertainers and sports figures were launched.
A key metric for the success of television advertisements is the proportion of viewers who "like the ads a lot". A
study of 1,189 adults who viewed the ads reported that 230 indicated that they "like the ads a lot". The
percentage of a typical television advertisement receiving the "like the ads a lot" score is believed to be 22%.
Company officials wanted to know if there is evidence that the series of television advertisements are less
successful than the typical ad (i.e., if there is evidence that the population proportion of "like the ads a lot" for
the company's ads is less than 0.22) at a 0.01 level of significance.

161. Referring to Instruction 9-9, the parameter the company officials is interested in is
A. the total number of viewers who "like the ads a lot".
B. the mean number of company officials who "like the ads a lot".
C. the proportion of viewers who "like the ads a lot".
D. the mean number of viewers who "like the ads a lot".
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Application of Knowledge
Answer: C

162. Referring to Instruction 9-9, state the null hypothesis for this study.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: H0: p ≥ 0.22

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Business Statistics 5e
163. Referring to Instruction 9-9, state the alternative hypothesis for this study.
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: H1: p < 0.22

164. Referring to Instruction 9-9, what critical value should the company officials use to determine the
rejection region?
Difficulty: Basic
Learning Outcome: 9.3 Use hypothesis testing to test a mean or proportion.
AACSB: Analytical Thinking
Answer: -2.3263

LO 9.4

165. True or False: In testing a hypothesis, statements for the null and alternative hypotheses as well as the
selection of the level of significance should precede the collection and examination of the data.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: A

166. True or False: In hypothesis testing, it is not relevant whether the test is a one-tail or two-tail test.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: B

167. True or False: In testing a hypothesis, you should always raise the question concerning the purpose of the
study, survey, or experiment.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: A

168. True or False: A proper methodology in performing hypothesis tests is to ask whether a random sample
can be selected from the population of interest.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: A

169. True or False: "What conclusions and interpretations can you reach from the results of the hypothesis

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Business Statistics 5e
test?" is not an important question to ask when performing a hypothesis test.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: B

170. True or False: "Is the intended sample size large enough to achieve the desired power of the test for the
level of significance chosen?" should be among the questions asked when performing a hypothesis test.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: A

171. True or False: In instances in which there is insufficient evidence to reject the null hypothesis, you must
make it clear that this does not prove that the null hypothesis is true.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: A

172. True or False: In instances in which there is insufficient evidence to reject the null hypothesis, you must
make it clear that this has proven that the null hypothesis is true.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Application of Knowledge
Answer: B

173. True or False: In conducting research, you should document both good and bad results.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: A

174. True or False: You should report only the results of hypothesis tests that show statistical significance and
omit those for which there is insufficient evidence in the findings.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.4 Recognise the pitfalls involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: B

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 36
Business Statistics 5e
LO 9.5

175. True or False: Data snooping is occasionally permissible but is dependent on the construction quality of
the study.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: B

176. True or False: Data cleansing and data snooping are different names for the same practice.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: B

177. True or False: When conducting research, one should document both good and bad results.
A. True
B. False
Difficulty: Basic
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: A

178. True or False: It is never permissible to remove a value from a study.


A. True
B. False
Difficulty: Basic
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: B

179. Using a set of data more than once for inference or selecting a model is known as [Blank].
Difficulty: Basic
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: data snooping

180. When working with a very large sample size, you may get a result that is [Blank] significant but has little
[Blank] significance.
Difficulty: Moderate
Learning Outcome: 9.5 Identify the ethical issues involved in hypothesis testing.
AACSB: Analytical Thinking
Answer: statistically; practical

Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 37
Business Statistics 5e
Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd. – 9781488617249 / Berenson / Basic 38
Business Statistics 5e
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came out and said "Go away, I'm thinking—oh it's you?" which was
how he always began.
"Owl," said Rabbit shortly, "you and I have brains. The others have
fluff. If there is any thinking to be done in this Forest—and when I say
thinking I mean thinking—you and I must do it."
"Yes," said Owl. "I was."
"Read that."
Owl took Christopher Robin's notice from Rabbit and looked at it
nervously. He could spell his own name WOL, and he could spell
Tuesday so that you knew it wasn't Wednesday, and he could read
quite comfortably when you weren't looking over his shoulder and
saying "Well?" all the time, and he could——
"Well?" said Rabbit.
"Yes," said Owl, looking Wise and Thoughtful. "I see what you mean.
Undoubtedly."
"Well?"
"Exactly," said Owl. "Precisely." And he added, after a little thought, "If
you had not come to me, I should have come to you."
"Why?" asked Rabbit.
"For that very reason," said Owl, hoping that something helpful would
happen soon.
"Yesterday morning," said Rabbit solemnly, "I went to see Christopher
Robin. He was out. Pinned on his door was a notice."
"The same notice?"
"A different one. But the meaning was the same. It's very odd."
"Amazing," said Owl, looking at the notice again, and getting, just for
a moment, a curious sort of feeling that something had happened to
Christopher Robin's back. "What did you do?"
"Nothing."
"The best thing," said Owl wisely.
"Well?" said Rabbit again, as Owl knew he was going to.
"Exactly," said Owl.
For a little while he couldn't think of anything more; and then, all of a
sudden, he had an idea.
"Tell me, Rabbit," he said, "the exact words of the first notice. This is
very important. Everything depends on this. The exact words of the
first notice."
"It was just the same as that one really."
Owl looked at him, and wondered whether to push him off the tree;
but, feeling that he could always do it afterwards, he tried once more
to find out what they were talking about.
"The exact words, please," he said, as if Rabbit hadn't spoken.
"It just said, 'Gon out. Backson.' Same as this, only this says 'Bisy
Backson' too."
Owl gave a great sigh of relief.
"Ah!" said Owl. "Now we know where we are."
"Yes, but where's Christopher Robin?" said Rabbit. "That's the point."
Owl looked at the notice again. To one of his education the reading of
it was easy. "Gone out, Backson. Bisy, Backson"—just the sort of
thing you'd expect to see on a notice.
"It is quite clear what has happened, my dear Rabbit," he said.
"Christopher Robin has gone out somewhere with Backson. He and
Backson are busy together. Have you seen a Backson anywhere
about in the Forest lately?"
"I don't know," said Rabbit. "That's what I came to ask you. What are
they like?"
"Well," said Owl, "the Spotted or Herbaceous Backson is just a——"
"At least," he said, "it's really more of a——"
"Of course," he said, "it depends on the——"
"Well," said Owl, "the fact is," he said, "I don't know what they're like,"
said Owl frankly.
"Thank you," said Rabbit. And he hurried off to see Pooh.
Before he had gone very far he heard a noise. So he stopped and
listened. This was the noise.
NOISE, BY POOH

Oh, the butterflies are flying,


Now the winter days are dying,
And the primroses are trying
To be seen.

And the turtle-doves are cooing,


And the woods are up and doing,
For the violets are blue-ing
In the green.

Oh, the honey-bees are gumming


On their little wings, and humming
That the summer, which is coming,
Will be fun.

And the cows are almost cooing,


And the turtle-doves are mooing,
Which is why a Pooh is poohing
In the sun.

For the spring is really springing;


You can see a skylark singing,
And the blue-bells, which are ringing,
Can be heard.

And the cuckoo isn't cooing,


But he's cucking and he's ooing,
And a Pooh is simply poohing
Like a bird.

"Hallo, Pooh," said Rabbit.


"Hallo, Rabbit," said Pooh dreamily.
"Did you make that song up?"
"Well, I sort of made it up," said Pooh. "It isn't Brain," he went on
humbly, "because You Know Why, Rabbit; but it comes to me
sometimes."
"Ah!" said Rabbit, who never let things come to him, but always went
and fetched them. "Well, the point is, have you seen a Spotted or
Herbaceous Backson in the Forest, at all?"
"No," said Pooh. "Not a—no," said Pooh. "I saw Tigger just now."
"That's no good."
"No," said Pooh. "I thought it wasn't."
"Have you seen Piglet?"
"Yes," said Pooh. "I suppose that isn't any good either?" he asked
meekly.
"Well, it depends if he saw anything."
"He saw me," said Pooh.
Rabbit sat down on the ground next to Pooh and, feeling much less
important like that, stood up again.
"What it all comes to is this," he said. "What does Christopher Robin
do in the morning nowadays?"
"What sort of thing?"
"Well, can you tell me anything you've seen him do in the morning?
These last few days."
"Yes," said Pooh. "We had breakfast together yesterday. By the Pine
Trees. I'd made up a little basket, just a little, fair-sized basket, an
ordinary biggish sort of basket, full of——"
"Yes, yes," said Rabbit, "but I mean later than that. Have you seen
him between eleven and twelve?"
"Well," said Pooh, "at eleven o'clock—at eleven o'clock—well, at
eleven o'clock, you see, I generally get home about then. Because I
have One or Two Things to Do."
"Quarter past eleven, then?"
"Well——" said Pooh.
"Half past."
"Yes," said Pooh. "At half past—or perhaps later—I might see him."
And now that he did think of it, he began to remember that he hadn't
seen Christopher Robin about so much lately. Not in the mornings.
Afternoons, yes; evenings, yes; before breakfast, yes; just after
breakfast, yes. And then, perhaps, "See you again, Pooh," and off
he'd go.
"That's just it," said Rabbit, "Where?"
"Perhaps he's looking for something."
"What?" asked Rabbit.
"That's just what I was going to say," said Pooh. And then he added,
"Perhaps he's looking for a—for a——"
"A Spotted or Herbaceous Backson?"
"Yes," said Pooh. "One of those. In case it isn't."
Rabbit looked at him severely.
"I don't think you're helping," he said.
"No," said Pooh. "I do try," he added humbly.
Rabbit thanked him for trying, and said that he would now go and see
Eeyore, and Pooh could walk with him if he liked. But Pooh, who felt
another verse of his song coming on him, said he would wait for
Piglet, good-bye, Rabbit; so Rabbit went off.
But, as it happened, it was Rabbit who saw Piglet first. Piglet had got
up early that morning to pick himself a bunch of violets; and when he
had picked them and put them in a pot in the middle of his house, it
suddenly came over him that nobody had ever picked Eeyore a
bunch of violets, and the more he thought of this, the more he thought
how sad it was to be an Animal who had never had a bunch of violets
picked for him. So he hurried out again, saying to himself, "Eeyore,
Violets," and then "Violets, Eeyore," in case he forgot, because it was
that sort of day, and he picked a large bunch and trotted along,
smelling them, and feeling very happy, until he came to the place
where Eeyore was.
"Oh, Eeyore," began Piglet a little nervously, because Eeyore was
busy.
Eeyore put out a paw and waved him away.
"Tomorrow," said Eeyore. "Or the next day."
Piglet came a little closer to see what it was. Eeyore had three sticks
on the ground, and was looking at them. Two of the sticks were
touching at one end, but not at the other, and the third stick was laid
across them. Piglet thought that perhaps it was a Trap of some kind.

"Oh, Eeyore," he began again, "just——"


"Is that little Piglet?" said Eeyore, still looking hard at his sticks.
"Yes, Eeyore, and I——"
"Do you know what this is?"
"No," said Piglet.
"It's an A."
"Oh," said Piglet.
"Not O, A," said Eeyore severely. "Can't you hear, or do you think you
have more education than Christopher Robin?"
"Yes," said Piglet. "No," said Piglet very quickly. And he came closer
still.
"Christopher Robin said it was an A, and an A it is—until somebody
treads on me," Eeyore added sternly.
Piglet jumped backwards hurriedly, and smelt at his violets.
"Do you know what A means, little Piglet?"
"No, Eeyore, I don't."
"It means Learning, it means Education, it means all the things that
you and Pooh haven't got. That's what A means."
"Oh," said Piglet again. "I mean, does it?" he explained quickly.
"I'm telling you. People come and go in this Forest, and they say, 'It's
only Eeyore, so it doesn't count.' They walk to and fro saying 'Ha ha!'
But do they know anything about A? They don't. It's just three sticks
to them. But to the Educated—mark this, little Piglet—to the
Educated, not meaning Poohs and Piglets, it's a great and glorious A.
Not," he added, "just something that anybody can come and breathe
on."
Piglet stepped back nervously, and looked round for help.
"Here's Rabbit," he said gladly. "Hallo, Rabbit."
Rabbit came up importantly, nodded to Piglet, and said, "Ah, Eeyore,"
in the voice of one who would be saying "Good-bye" in about two
more minutes.
"There's just one thing I wanted to ask you, Eeyore. What happens to
Christopher Robin in the mornings nowadays?"
"What's this that I'm looking at?" said Eeyore, still looking at it.
"Three sticks," said Rabbit promptly.
"You see?" said Eeyore to Piglet. He turned to Rabbit. "I will now
answer your question," he said solemnly.
"Thank you," said Rabbit.
"What does Christopher Robin do in the mornings? He learns. He
becomes Educated. He instigorates—I think that is the word he
mentioned, but I may be referring to something else—he instigorates
Knowledge. In my small way I also, if I have the word right, am—am
doing what he does. That, for instance, is——"
"An A," said Rabbit, "but not a very good one. Well, I must get back
and tell the others."
Eeyore looked at his sticks and then he looked at Piglet.
"What did Rabbit say it was?" he asked.
"An A," said Piglet.
"Did you tell him?"
"No, Eeyore, I didn't. I expect he just knew."
"He knew? You mean this A thing is a thing Rabbit knew?"
"Yes, Eeyore. He's clever, Rabbit is."
"Clever!" said Eeyore scornfully, putting a foot heavily on his three
sticks. "Education!" said Eeyore bitterly, jumping on his six sticks.
"What is Learning?" asked Eeyore as he kicked his twelve sticks into
the air. "A thing Rabbit knows! Ha!"
"I think——" began Piglet nervously.
"Don't," said Eeyore.
"I think Violets are rather nice," said Piglet. And he laid his bunch in
front of Eeyore and scampered off.
Next morning the notice on Christopher Robin's door said:
GONE OUT
BACK SOON
C. R.
Which is why all the animals in the Forest—except, of course, the
Spotted and Herbaceous Backson—now know what Christopher
Robin does in the mornings.

CHAPTER VI
IN WHICH Pooh Invents a New Game and Eeyore Joins In
By the time it came to the edge of the Forest the stream had grown
up, so that it was almost a river, and, being grown-up, it did not run
and jump and sparkle along as it used to do when it was younger, but
moved more slowly. For it knew now where it was going, and it said to
itself, "There is no hurry. We shall get there some day." But all the
little streams higher up in the Forest went this way and that, quickly,
eagerly, having so much to find out before it was too late.
There was a broad track, almost as broad as a road, leading from the
Outland to the Forest, but before it could come to the Forest, it had to
cross this river. So, where it crossed, there was a wooden bridge,
almost as broad as a road, with wooden rails on each side of it.
Christopher Robin could just get his chin to the top rail, if he wanted
to, but it was more fun to stand on the bottom rail, so that he could
lean right over, and watch the river slipping slowly away beneath him.
Pooh could get his chin on to the bottom rail if he wanted to, but it
was more fun to lie down and get his head under it, and watch the
river slipping slowly away beneath him. And this was the only way in
which Piglet and Roo could watch the river at all, because they were
too small to reach the bottom rail. So they would lie down and watch
it ... and it slipped away very slowly, being in no hurry to get there.
One day, when Pooh was walking towards this bridge, he was trying
to make up a piece of poetry about fir-cones, because there they
were, lying about on each side of him, and he felt singy. So he picked
a fir-cone up, and looked at it, and said to himself, "This is a very
good fir-cone, and something ought to rhyme to it." But he couldn't
think of anything. And then this came into his head suddenly:

Here is a myst'ry
About a little fir-tree.
Owl says it's his tree,
And Kanga says it's her tree.

"Which doesn't make sense," said Pooh, "because Kanga doesn't live
in a tree."
He had just come to the bridge; and not looking where he was going,
he tripped over something, and the fir-cone jerked out of his paw into
the river.
"Bother," said Pooh, as it floated slowly under the bridge, and he went
back to get another fir-cone which had a rhyme to it. But then he
thought that he would just look at the river instead, because it was a
peaceful sort of day, so he lay down and looked at it, and it slipped
slowly away beneath him ... and suddenly, there was his fir-cone
slipping away too.
"That's funny," said Pooh. "I dropped it on the other side," said Pooh,
"and it came out on this side! I wonder if it would do it again?" And he
went back for some more fir-cones.
It did. It kept on doing it. Then he dropped two in at once, and leant
over the bridge to see which of them would come out first; and one of
them did; but as they were both the same size, he didn't know if it
was the one which he wanted to win, or the other one. So the next
time he dropped one big one and one little one, and the big one came
out first, which was what he had said it would do, and the little one
came out last, which was what he had said it would do, so he had
won twice ... and when he went home for tea, he had won thirty-six
and lost twenty-eight, which meant that he was—that he had—well,
you take twenty-eight from thirty-six, and that's what he was. Instead
of the other way round.
And that was the beginning of the game called Poohsticks, which
Pooh invented, and which he and his friends used to play on the edge
of the Forest. But they played with sticks instead of fir-cones,
because they were easier to mark.
Now one day Pooh and Piglet and Rabbit and Roo were all playing
Poohsticks together. They had dropped their sticks in when Rabbit
said "Go!" and then they had hurried across to the other side of the
bridge, and now they were all leaning over the edge, waiting to see
whose stick would come out first. But it was a long time coming,
because the river was very lazy that day, and hardly seemed to mind
if it didn't ever get there at all.
"I can see mine!" cried Roo. "No, I can't, it's something else. Can you
see yours, Piglet? I thought I could see mine, but I couldn't. There it
is! No, it isn't. Can you see yours, Pooh?"
"No," said Pooh.
"I expect my stick's stuck," said Roo. "Rabbit, my stick's stuck. Is your
stick stuck, Piglet?"
"They always take longer than you think," said Rabbit.
"How long do you think they'll take?" asked Roo.
"I can see yours, Piglet," said Pooh suddenly.
"Mine's a sort of greyish one," said Piglet, not daring to lean too far
over in case he fell in.
"Yes, that's what I can see. It's coming over on to my side."
Rabbit leant over further than ever, looking for his, and Roo wriggled
up and down, calling out "Come on, stick! Stick, stick, stick!" and
Piglet got very excited because his was the only one which had been
seen, and that meant that he was winning.
"It's coming!" said Pooh.
"Are you sure it's mine?" squeaked Piglet excitedly.
"Yes, because it's grey. A big grey one. Here it comes! A very—big—
grey——Oh, no, it isn't, it's Eeyore."
And out floated Eeyore.

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