APPLIED STAT.IN BUS.+ECONOMICS
APPLIED STAT.IN BUS.+ECONOMICS
6th Edition
ISBN: 9781259957598
Author: DOANE
Publisher: RENT MCG
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Chapter 10, Problem 43CE

a.

To determine

State the hypotheses.

a.

Expert Solution
Check Mark

Answer to Problem 43CE

Null hypothesis:

H0:π1π20_

Alternative hypothesis:

H1:π1π2>0_

Explanation of Solution

Calculation:

The given information is that, the summary statistic for college student is x1=833 and n1=850. The summary statistic for young children is x2=692 and n2=740.

Here, the claim is that the college students are more likely than young children to eat cereal.

Assume π1 is the population proportion of the college students and π2 is the population proportion of the young children.

Here, the direction of the test is right-tailed.

State the hypotheses:

Null hypothesis:

H0:π1π20_

That is, the college students are not more likely than young children to eat cereal.

Alternative hypothesis:

H1:π1π2>0_

That is, the college students are more likely than young children to eat cereal.

b.

To determine

Find the decision rule and sketch it.

b.

Expert Solution
Check Mark

Answer to Problem 43CE

The decision rule is, “reject the null hypothesis if  zcalc>+1.645, otherwise do not reject the null hypothesis”.

Explanation of Solution

Calculation:

Critical value:

Software procedure:

Step-by-step procedure to obtain the critical value using the MINITAB software:

  • Choose Graph > Probability Distribution Plot choose View Probability > OK.
  • From Distribution, choose ‘Normal’ distribution.
  • Enter the Mean as 0 and the Standard deviation as 1.
  • Click the Shaded Area tab.
  • Choose Probability Value and Right Tail for the region of the curve to shade.
  • Enter the Probability value as 0.05.
  • Click OK.

Output using the MINITAB software is given below:

APPLIED STAT.IN BUS.+ECONOMICS, Chapter 10, Problem 43CE , additional homework tip  1

From the MINITAB output, the critical value for right-tailed test is 1.645.

Decision rule:

If zcalc>+1.645, then reject the null hypothesis.

Otherwise, do not reject the null hypothesis.

c.

To determine

Find the sample proportions and z statistic.

c.

Expert Solution
Check Mark

Answer to Problem 43CE

The sample proportion for college students is 0.98 and the sample proportion for young children is 0.9351.

The test statistic is 4.51.

Explanation of Solution

Calculation:

Sample proportion for college students:

p1=x1n1=833850=0.98

Thus, the sample proportion for college students is 0.98.

Sample proportion for young children:

p2=x2n2=692740=0.9351

Thus, the sample proportion for young children is 0.9351.

Pooled proportion:

pc=x1+x2n1+n2=833+692850+740=1,5251,590=0.9591

Thus, the pooled proportion is 0.9591.

Test statistic:

zcalc=p1p2pc(1pc)[1n1+1n2]=0.980.93510.9591(10.9591)[1850+1740]=0.980.93510.9591(0.0409)[0.0012+0.0014]=0.04490.0392(0.0026)=4.51

Thus, the test statistic is 4.51.

d.

To determine

Make a decision.

d.

Expert Solution
Check Mark

Explanation of Solution

Here, the test statistic is greater than the critical value.

That is, zcalc(=4.51)>+1.645.

Therefore, the null hypothesis is rejected.

Hence, there is evidence to infer that the college students are more likely than young children to eat cereal.

d.

To determine

Find the p-value and interpret it.

d.

Expert Solution
Check Mark

Answer to Problem 43CE

The p-value is 0.

There is evidence to infer that the college students are more likely than young children to eat cereal.

Explanation of Solution

Calculation:

p- value:

Software procedure:

Step-by-step procedure to obtain the p-value using the MINITAB software:

  • Choose Graph > Probability Distribution Plot choose View Probability > OK.
  • From Distribution, choose ‘Normal’ distribution.
  • Enter the Mean as 0 and the Standard deviation as 1.
  • Click the Shaded Area tab.
  • Choose X Value and Both Tails for the region of the curve to shade.
  • Enter the X value as 4.51.
  • Click OK.

Output using the MINITAB software is given below:

APPLIED STAT.IN BUS.+ECONOMICS, Chapter 10, Problem 43CE , additional homework tip  2

From the MINITAB output, the p-value is approximately 0.

Decision rule:

If p-value<α, then reject the null hypothesis.

Conclusion:

Here, the p-value is less than the level of significance.

That is, p-value(=0)<α(=0.05).

Therefore, the null hypothesis is rejected.

Hence, there is evidence to infer that the college students are more likely than young children to eat cereal.

e.

To determine

Check whether the normality assumption is fulfilled or not.

e.

Expert Solution
Check Mark

Answer to Problem 43CE

The normality assumption is can be assumed.

Explanation of Solution

Calculation:

Rule for normality:

  • Rule 1: n1p110
  • Rule 2: n1(1p1)10
  • Rule 3: n2p210
  • Rule 4: n2(1p2)10

Check the rule:

Rule 1: n1p110

n1p1=850(0.98)=833(>10)

Rule 2: n1(1p1)10

n1(1p1)=850(10.98)=17(>10)

Rule 3: n2p210

n2p2=740(0.9351)=691.974(>10)

Rule 4: n2(1p2)10

n2(1p2)=740(10.9351)=48.026(>10)

Since n1p1, n1(1p1), n2p2 and n2(1p2) are greater than 10, the normality of the sample proportion can be assumed.

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Chapter 10 Solutions

APPLIED STAT.IN BUS.+ECONOMICS

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