Loose Leaf for Statistical Techniques in Business and Economics
Loose Leaf for Statistical Techniques in Business and Economics
17th Edition
ISBN: 9781260152647
Author: Douglas A. Lind
Publisher: McGraw-Hill Education
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Chapter 6, Problem 70DA

a.

To determine

Construct the probability distribution for the number of bedrooms.

Calculate the mean and standard deviation of this distribution.

a.

Expert Solution
Check Mark

Answer to Problem 70DA

The probability distributions for the number of bedrooms are as follows:

Number of BedroomsFrequency

Probability

P(x)

2240.2286
3260.2476
4260.2476
5110.1048
6140.1333
720.0190
820.0190
Total1051

The mean of the distribution is 3.8.

The standard deviation of the distribution is 1.4954.

Explanation of Solution

Step-by-step procedure to obtain the frequency table for bedrooms using EXCEL:

  • Enter the data in an EXCEL sheet.
  • Go to Insert > PivotTable > PivotTable.
  • In Table/Range, select the column Bedrooms and click OK.
  • In PivotTable Field List, drag Bedrooms to Row Labels and to ∑ values.
  • Click on it from ∑ values.
  • Choose Value Field Settings.
  • In Summarize value field by, choose Count and click OK.

The output obtained is as follows:

Loose Leaf for Statistical Techniques in Business and Economics, Chapter 6, Problem 70DA , additional homework tip  1

The probability distributions for the number of bedrooms are calculated as follows:

Number of BedroomsFrequency

Probability

P(x)

22424105=0.2286
32626105=0.2476
42626105=0.2476
51111105=0.1048
61414105=0.1333
722105=0.0190
822105=0.0190
Total1051

The mean of the distribution is calculated as follows:

μ=xP(x)=(2×0.2286)+(3×0.2476)+(4×0.2476)+(5×0.1048)+(6×0.1333)+(7×0.0190)+(8×0.0190)=0.4571+0.7429+0.9905+0.5238+0.8+0.1333+0.1524=3.8

Therefore, the mean of the distribution is 3.8.

Consider the following table that shows preliminary calculations to compute the standard deviation:

BedroomsFrequency

Probability

P(x)

(xμ)2(xμ)2P(x)
2240.2286(23.8)2=3.243.24×0.2286=0.7406
3260.2476(33.8)2=0.640.64×0.2476=0.1585
4260.2476(43.8)2=0.040.04×0.2476=0.0099
5110.1048(53.8)2=1.441.44×0.1048=0.1509
6140.1333(63.8)2=4.844.84×0.1333=0.6453
720.0190(73.8)2=10.2410.24×0.0190=0.1950
820.0190(83.8)2=17.6417.64×0.0190=0.3360
1052.2362

The standard deviation of the distribution is calculated as follows:

σ=[(xμ)2P(x)]=2.2362=1.4954

Therefore, the standard deviation of the distribution is 1.4954.

b.

To determine

Construct the probability distribution for the number of bathrooms.

Find the mean and standard deviation for this distribution.

b.

Expert Solution
Check Mark

Answer to Problem 70DA

The probability distributions for the number of bathrooms are as follows:

Number of BathroomsFrequency

Probability

P(x)

1.5240.2286
2170.1619
2.5130.1238
3220.2095
3.5110.1048
4110.1048
4.530.0286
520.0190
5.520.0190
 105 

The mean of the distribution is 2.7189.

The standard deviation of the distribution is 1.0093.

Explanation of Solution

Step-by-step procedure to obtain the frequency table for bedrooms using EXCEL:

  • Enter the data in an EXCEL sheet.
  • Go to Insert > PivotTable > PivotTable.
  • In Table/Range, select the column Bathrooms and click OK.
  • In PivotTable Field List, drag Bathrooms to Row Labels and to ∑ values.
  • Click on it from ∑ values.
  • Choose Value Field Settings.
  • In Summarize value field by, choose Count and click OK.

The output obtained is as follows:

Loose Leaf for Statistical Techniques in Business and Economics, Chapter 6, Problem 70DA , additional homework tip  2

The probability distributions for the number of bathrooms are calculated as follows:

Number of BathroomsFrequency

Probability

P(x)

1.52424105=0.2286
21717105=0.1619
2.51313105=0.1238
32222105=0.2095
3.51111105=0.1048
41111105=0.1048
4.533105=0.0286
522105=0.0190
5.522105=0.0190
Total1051

The mean of the distribution is calculated as follows:

μ=xP(x)={(1.5×0.2286)+(2×0.1619)+(2.5×0.1238)+(3×0.2095)+(3.5×0.1048)+(4×0.1048)+(4.5×0.0286)+(5×0.0190)+(5.5×0.0190)=0.3429+0.3238+0.3095+0.6285+0.3668+0.4192+0.1287+0.095+0.1045=2.7189

Therefore, the mean of the distribution is 2.7189.

Consider the following table that shows preliminary calculations to compute the standard deviation:

Number of BathroomsFrequency

Probability

P(x)

(xμ)2(xμ)2P(x)
1.5240.2286(1.52.7189)2=1.48571.4857×0.2286=0.3396
2170.1619(22.7189)2=0.51680.5168×0.1619=0.0837
2.5130.1238(2.52.7189)2=0.04790.0479×0.1238=0.0059
3220.2095(32.7189)2=0.07900.0790×0.2095=0.0166
3.5110.1048(3.52.7189)2=0.61010.6101×0.1048=0.0639
4110.1048(42.7189)2=1.64121.6412×0.1048=0.1719
4.530.0286(4.52.7189)2=3.17233.1723×0.0286=0.0906
520.0190(52.7189)2=5.20345.2034×0.0190=0.0991
5.520.0190(5.52.7189)2=7.73457.7345×0.0190=0.1473
Total105  1.0187

The standard deviation of the distribution is calculated as follows:

σ=[(xμ)2P(x)]=1.0187=1.0093

Therefore, the standard deviation of the distribution is 1.0093.

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Chapter 6 Solutions

Loose Leaf for Statistical Techniques in Business and Economics

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