Statistics for Business and Economics
Statistics for Business and Economics
1. Consider the following data values of variables x and y.
Find the least squares regression line.
x 
4 
2 
6 
4 
3 
y 
5 
3 
7 
6 
5 
A. −1.045 + 0.932x
B. 1.122 + 1.073x
C. 1.659 + 0.932x
D. 21.206 + 1.073x
2. A random sample of males and females involved in rearend accidents results in the following Minitab summary:

N 
MEAN 
MEDIAN 
TREMEAN 
STDEV 
SEMEAN 
FEMALES 
33 
23.91 
20.00 
23.38 
9.77 
1.70 
MALES 
38 
28.87 
28.50 
28.44 
9.67 
1.57 
What is the value of the test statistic (Z score)?
A. −4.96
B. 2.32
C. −2.14
D. 1.64
3. A regression analysis between sales (in $1000) and advertising (in $) resulted in the following least squares line: yˆ = 80,000 + 5x. This implies that an increase of _______ in advertising is expected to result in an increase of _______ in sales.
A. $1, $5,000
B. $1, $80,005
C. $1, $5
D. $5, $5,000
4. Another name for the residual term in a regression equation is
A. residual analysis.
B. homoscedasticity.
C. pooled variances.
D. random error.
5. In testing a population variance or constructing a confidence interval for the population variance, an essential assumption is that
A. sample size exceeds 30.
B. expected frequencies equal or exceed 5.
C. the population is normally distributed.
D. the population is uniformly distributed.
6. A lefttail area in the chisquare distribution equals 0.95. For df = 10, the table value equals
A. 15.987.
B. 3.940.
C. 18.307.
D. 20.483.
7. In testing the difference between two population means using two independent samples, we use the pooled variance in estimating the standard error of the sampling distribution of the sample mean difference x̄1 − x̄2 if the
A. populations are nonnormal with unequal variances.
B. populations are at least normally distributed with equal variances.
C. ample sizes are both large.
D. sizes are both greater than 30.
8. In using the ANOVA models, the assumptions made about the data are
A. the population variances are equal.
B. the samples are independent.
C. all 3 assumptions made here about the data.
D. the population distributions are normal.
9. The object on which the response and factors are observed is called
A. treatments.
B. factor level.
C. factors.
D. experimental unit.
10. In testing the difference between two population means using two independent samples, the sampling distribution of the sample mean difference x̄1 − x̄2 is normal if the
A. sizes are both greater than 30.
B. populations are normal.
C. populations are nonnormal and the sample sizes are large.
D. population sizes are both greater than 30.
11. A “bestfit” mathematical equation for the values of two variables, x and y, is called
A. errors of prediction.
B. regression analysis.
C. scatter diagram.
D. correlation analysis.
12. Lily Energy Systems manufacturer’s woodburning heaters and fireplace inserts. One of its systems has an electric blower, which is thermostatically controlled. The blower is designed to automatically turn on when the temperature in the stove reaches 125°F and turn off at 85°F. Complaints from customers indicate that the thermostat control is not working properly. The company feels that the thermostat is acceptable if the variance in the cutoff temperature is less than or equal to 175. The company takes a sample of 24 thermostats and finds that the variance equals 289. The calculated chisquare test statistic and the table value for a 0.05 significance level are
A. 35.172, 38.99.
B. 37.983, 38.076.
C. 37.983, 35.172.
D. 38.076, 38.99.
13. The Fstatistic in a oneway ANOVA represents the variation
A. within the treatments divided by the variation between the treatments.
B. between the treatments plus the variation within the treatments.
C. between the treatments divided by the variation within the treatments.
D. within the treatments minus the variation between the treatments.
14. A random sample of males and females involved in rearend accidents results in the following Minitab summary:
What is the standard error of the statistic between the two means?

N 
MEAN 
MEDIAN 
TREMEAN 
STDEV 
SEMEAN 
FEMALES 
33 
23.91 
20.00 
23.38 
9.77 
1.70 
MALES 
38 
28.87 
28.50 
28.44 
9.67 
1.57 
A. 4.96
B. 1.635
C. 0.897
D. 2.314
15. What is the slope of the line that passes through the points (−5, −8) and (3,8)? A. 2 B. −2 C. ½ D. −½
16. A chisquare test for independence with 8 degrees of freedom results in a test statistic of 18.21. Using the chisquare table, the most accurate statement that can be made about the pvalue for this test is that
A. 0.05 > pvalue > 0.025.
B. pvalue < 0.01.
C. 0.10 > pvalue > 0.05.
D. 0.025 > pvalue > 0.01.
17. Given the significance level 0.025, the Fvalue for the degrees of freedom, df = (7,3) is
A. 8.45.
B. 14.62.
C. 27.67.
D. 5.89.
18. Which of the following statements are true regarding the simple linear regression model y
= β0 + β1xi + εi?
A. β1 is the yintercept of the regression line.
B. β0 is the slope of the regression line.
C. y i is a value of the dependent variable (y) and x i is a value of the independent variable (x).
D. εi is a nonrandom error.
19. Given the significance level 0.05, the Fvalue for the degrees of freedom, df = (3,7) is
A. 4.35.
B. 8.89.
C. 4.12.
D. 6.16.
20. With larger and larger numbers of categories in chisquare tests, the chisquare distribution takes on the shape of the _______ distribution.
A. binomial
B. Poisson
C. t
D. normal