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a. By looking at a large data set from Statistics Canada (which can be accessed at https://www.statcan.gc.ca/ although there is no need to) with over 60,000 observations for the year 2018, you find that the average number of years of education is approximately 15.6. However, a surprisingly large number of individuals (approximately 800) have very low values for this variable, namely, 6 years or less. Suppose that you decide to drop these observations, since none of your relatives or friends have few years of education. In addition, you are concerned that if these individuals cannot report the years of education correctly, then their observations on other variables, such as their average hourly earnings also cannot be trusted. As a matter of fact, you have found several of these to be below minimum wages in Ontario in 2018. Discuss if dropping these odd observations is reasonable. b. On a separate occasion, suppose that the sales revenue of firms are normally distributed with the function of N(200,25). Let Y represent sales revenue. Find the probability of Pr(190

a. By looking at a large data set from Statistics Canada (which can be accessed at https://www.statcan.gc.ca/ although there is no need to) with over 60,000 observations for the year 2018, you find that the average number of years of education is approximately 15.6. However, a surprisingly large number of individuals (approximately 800) have very low values for this variable, namely, 6 years or less. Suppose that you decide to drop these observations, since none of your relatives or friends have few years of education. In addition, you are concerned that if these individuals cannot report the years of education correctly, then their observations on other variables, such as their average hourly earnings also cannot be trusted. As a matter of fact, you have found several of these to be below minimum wages in Ontario in 2018. Discuss if dropping these odd observations is reasonable. b. On a separate occasion, suppose that the sales revenue of firms are normally distributed with the function of N(200,25). Let Y represent sales revenue. Find the probability of Pr(190

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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5. a. By looking at a large data set from Statistics Canada (which can be accessed at https://www.statcan.gc.ca/ although there is no need to) with over 60,000 observations for the year 2018, you find that the average number of years of education is approximately 15.6. However, a surprisingly large number of individuals (approximately 800) have very low values for this variable, namely, 6 years or less. Suppose that you decide to drop these observations, since none of your relatives or friends have few years of education. In addition, you are concerned that if these individuals cannot report the years of education correctly, then their observations on other variables, such as their average hourly earnings also cannot be trusted. As a matter of fact, you have found several of these to be below minimum wages in Ontario in 2018. Discuss if dropping these odd observations is reasonable. b. On a separate occasion, suppose that the sales revenue of firms are normally distributed with the function of N(200,25). Let Y represent sales revenue. Find the probability of Pr(190<Y<205). Interpret your results.
Transcribed Image Text:5. a. By looking at a large data set from Statistics Canada (which can be accessed at https://www.statcan.gc.ca/ although there is no need to) with over 60,000 observations for the year 2018, you find that the average number of years of education is approximately 15.6. However, a surprisingly large number of individuals (approximately 800) have very low values for this variable, namely, 6 years or less. Suppose that you decide to drop these observations, since none of your relatives or friends have few years of education. In addition, you are concerned that if these individuals cannot report the years of education correctly, then their observations on other variables, such as their average hourly earnings also cannot be trusted. As a matter of fact, you have found several of these to be below minimum wages in Ontario in 2018. Discuss if dropping these odd observations is reasonable. b. On a separate occasion, suppose that the sales revenue of firms are normally distributed with the function of N(200,25). Let Y represent sales revenue. Find the probability of Pr(190<Y<205). Interpret your results.
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