Chapter 7 Test

Chapter 7 Hypothesis Testing
True/False Questions
1. The alternative hypothesis is the one that we hold true until it can be proven false.
Answer: False Type: Concept Difficulty: Easy
2. The probability of committing a type I error is .
Answer: True Type: Concept Difficulty: Easy
3. A type II error is the error that is committed if the null hypothesis is rejected when in
fact it is true.
4. The probability of rejecting the null hypothesis when the null hypothesis is false is
called the power of the test.
5. The power of a test is computed as 1 - .
6. When the null hypothesis is not rejected, then we can assume that the null hypothesis
is certainly true.
7. A two-tailed hypothesis test is always more powerful than a onetailed test.
Answer: False Type: Concept Difficulty: Medium
8. In stating the null and alternative hypotheses, the equal sign is always placed in the
null hypothesis.
9. The p-value of a hypothesis test is always less than alpha.
Answer: False Type: Concept Difficulty: Medium
Aczel, Complete Business Statistics, Sixth Edition

10. Increasing the sample size will increase the power of a test.
Answer: True Type: Concept Difficulty: Medium
11. The p-value is the chance that you are taking of making a type I error.
12. The level is the chance that you are willing to take of making a type I error.
13. One minus the p-value is the chance that you are taking of making a type I error.
Multiple Choice Questions
14. An advertiser is believed to exaggerate claims about a company's product, (high
performance, larger measurable average). An agency wants to prove that this
advertiser's claims are exaggerated. There are data available. The correct hypothesis
test will be:
A) two-tailed test
B) right-hand tailed test
C) left-hand tailed test
D) none of the above
Answer: C Type: Concept Difficulty: Medium
15. When conducting a test about the population mean with sample size 15, using sample
mean and sample standard deviation, the test statistic is:
A) z-value
B) t-value with df = n.
C) t-value with df = n + 1.
D) t-value with df = n - 1.
E) none of the above
Answer: D Type: Concept Difficulty: Easy

16. If I want to test the null hypothesis that the mean is 100 versus the alternative that it is
greater than 100, and I get a sample mean of 90, which is true?
A) I cannot say anything, I need to know the standard deviation and the sample size.
B) Always reject the null hypothesis.
C) Never reject the null hypothesis.
D) Reject the null if n > 30, otherwise fail to reject.
E) None of the above.
Answer: C Type: Concept Difficulty: Easy
17. The mean annual sales of a company in 36 of its sales offices over the country is
$23,860,000, with a standard deviation of $2,150,000. A manager quotes the annual
sales of the company to be $25,000,000. Compute the p-value to test whether the
sample data provide evidence to reject the executive's claim that the average annual
sales are $25,000,000.
A) 0.2726
B) 0.3637
C) 0
D) 0.0007
E) 0.0014
Answer: E Type: Computation Difficulty: Medium
18. An increase in alpha, the level of significance, causes:
A) An increase in the probability of the type I error to occur.
B) A decrease in the probability of type I error to occur.
C) No change in any of the type I or type II error.
D) A decrease in the probability of type I error to occur and an increase in the
probability of type II to occur.
E) None of the above.
Answer: A Type: Concept Difficulty: Medium
19. If = .01 for a two-tailed hypothesis test using the z test, the critical values are:
A) 1.90
B) 1.96
C) 2.00
D) 2.33
E) 2.58
Answer: E Type: Computation Difficulty: Easy

20. Suppose that you carry out a statistical test and find that the test statistic is z = 2.0
(Assume that the sample size is at least 30.) If the test is one-tailed, then the p-value is:
A) -0.0124
B) 0.0062
C) .00228
D) 0.9876
E) 0.1212
Answer: C Type: Computation Difficulty: Medium
21. In a left-hand tailed test for the population proportion, p, carried out at = 0.05, using
a large sample, the critical point is:
A) -1.645
B) -1.96
C) -2.575
D) 1.96
E) 1.645
Answer: A Type: Computation Difficulty: Medium
22. If = 0.01 for a one-tailed test, how large is the area of rejection?
A) 0.05
B) 0.025
C) 0.01
D) 0.005
E) None of the above
Answer: C Type: Concept Difficulty: Easy
23. A test for the population proportion, p, uses the t distribution:
A) if n < 30
B) if n > 30
C) if n 30
D) always
E) never
Answer: E Type: Concept Difficulty: Medium

24. I would like to test the null hypothesis that the population mean is 50 versus the
alternative that it is not 50. My sample size is 6, and the sample mean is 38 with
sample standard deviation of 16. At = 0.05, I should:
A) strongly reject the null hypothesis
B) mildly reject the null hypothesis
C) fail to reject the null hypothesis
D) accept the alternative hypothesis
E) there is insufficient information to determine
25. Suppose that n = 100, and that we want to test whether the population mean is equal to
20 versus the alternative that it is not equal to 20. The sample mean is found to be 18
and the sample standard deviation is 10. Compute the p-value for this test.
A) 0.0228
B) 0.0456
C) 0.5532
D) 1.00
E) 0
Answer: B Type: Computation Difficulty: Medium
26. The proportion of defective items is not allowed to be over 15%. A buyer wants to test
whether the proportion of defectives exceeds the allowable limit. The buyer takes a
random sample of 100 items and finds that 19 are defective. State the null and
alternative hypotheses for this test.
A) H0: p .15, H1: p > .15
B) H0: p < .15, H1: p > .15
C) H0: p = .15, H1: p * .15
D) H0: p < .15, H1: p > .15

27. The proportion of defective items is not allowed to be over 15%. A buyer wants to test
whether the proportion of defectives exceeds the allowable limit. The buyer takes a
random sample of 100 items and finds that 19 are defective. Find the p-value.
A) 0.3686
B) 0.1314
C) 0.2628
D) 0.8686
28. A manufacturer claims that his tires last at least 40,000 miles. A test on 25 tires reveals
that the mean life of a tire is 39,750 miles, with a standard deviation of 387 miles.
Compute the test statistic.
A) t = -0.65
B) t = 3.23
C) t = -3.23
D) t = 0.65
29. The average income in a certain area is assumed to be approximately $25,000. A
sample of size n = 36 gives a mean of $22,000 and a sample standard deviation of
$7,000. State the null and alternative hypotheses used to test whether the average
income of this area is as assumed.
A) H0: < 25,000, H1: 25,000
B) H0: = 22,000, H1: 22,000
C) H0: 25,000, H1: > 25,000
D) H0: 22,000, H1: < 22,000
E) H0: = 25,000, H1: 25,000

30. If you want to carry out a statistical test at = 0.01, to test whether the population
mean is equal to 500 or not, using a sample size of 300, with a test statistic of z = 1.97,
your conclusion should be:
A) do not reject the null hypothesis
B) reject the null hypothesis
C) not enough information to determine
D) only reject when the test statistic is negative
Answer: A Type: Concept Difficulty: Easy
31. Given a p-value of 0.065, and using the customary = 5%, the conclusion should be:
A) do not reject the null hypothesis
C) not enough information to determine
32. A random sample of 36 items gave a sample mean of 48 and a sample standard
deviation of 12. Compute the p-value to test whether or not the population mean is
equal to 50.
A) 0.3413
B) -0.4772
C) 0.1587
D) 0.6826
E) 0.3174
Answer: E Type: Computation Difficulty: Medium
33. Conduct a test to determine whether or not the population proportion of voters in favor
of proposal A is greater than 50%. In a random sample of 200 voters, 140 said that
they were in favor of this proposal. Compute the test statistic.
A) z = 6.17
B) z = 19.80
C) z = 5.66
D) z = 7.07

34. To test whether or not the population mean is at least 25, the test should be:
A) left-hand tailed test
B) right-hand tailed test
C) two-tailed test
Answer: B Type: Concept Difficulty: Easy
35. I want to conduct a statistical test of whether or not the population mean is 50. My
sample mean is 48, my sample standard deviation is 5, and my sample size is 100. The
result is:
A) not significant
B) significant
C) very significant
D) can't tell
sample mean is 71, my sample standard deviation is 5, and my sample size is 100. The
result is:
A) not significant
B) significant
C) very significant
D) can't tell
sample mean is 145, my sample standard deviation is 56, and my sample size is 100.
The result is:
A) not significant
B) significant
C) very significant
D) can't tell

sample mean is 262, my sample standard deviation is 5, and my sample size is 100.
The result is:
A) accept the null hypothesis
C) strongly reject the null hypothesis
D) can't tell
39. When conducting a test about the population proportion with n = 50, p = .05, and q = .
95, the test statistic is:
A) z-test
B) -value with df = n.
C) t-value with df = n + 1.
D) t-value with df = n - 1.
E) none of the above.
40. Statistical significance is a measure of what?
A) The chance of making a type-I error.
B) The chance of making a type-II error.
C) The chance you are willing to take of making a type-I error.
D) The chance you are willing to take of making a type-II error.
E) A and C above.
F) B and D above.
Answer: C Type: Concept Difficulty: Medium
41. A t-test is a ratio of what?
A) The effect you are measuring over the confidence measurement of the mean.
B) The confidence measurement of the mean over the effect you are measuring.
C) a and b above.
D) None of the above.

42. A random sample of 27 is selected from the population. What is the number of degrees
of freedom used to determine the appropriate critical t-value?
A) 20
B) 19
C) 26
D) T-test does not use degrees of freedom.
Answer: C Type: Computation Difficulty: Easy
Use the following to answer questions 43-45:
The profitability of a new broadband internet firm depends on the proportion of potential
customers who haven't entered into agreements with rival broadband providers. The new firm
will enter the market if it has compelling evidence, at = 0.05, that the proportion of
customers who already have broadband access is less than 0.40. A sample size of 125 has
been chosen.
43. Which of the following hypothesis pairs is most appropriate in this situation?
A) H0: p = 0.40, H1: p ? 0.40
B) H0: p = 0.40, H1: p < 0.40
C) H0: p = 0.40, H1: p > 0.40
D) H0: p > 0.40, H1: p < 0.40
E) H0: p < 0.40, H1: p > 0.40
44. Suppose that the sample proportion observed is 0.32. The p-value of _______ for this
test indicates the probability of incorrectly rejecting _______.
A) 0.0336; H0
B) 0.0336; H1
C) 0.0672; H0
D) 0.0672; H1
10

45. Suppose the true population proportion in this situation is 0.39. With a sample size of
125, the broadband firm has a _______ probability of making a _______ error.
A) 0.0778; Type I
B) 0.0778; Type II
C) 0.9222; Type I
D) 0.9222; Type II
E) 0.9505; Type II
Answer: D Type: Computation Difficulty: Hard
46. Suppose you are testing the following hypothesis pair: H0: 100 vs. H1: > 100. A
sample average of less than 100 would sometimes lead to a _______ error but would
never lead to a _______ error.
A) Type I; Type II
B) Type II; Type I
C) Type I; p-value
D) p-value; Type II
E) Random; Non-Random
Answer: B Type: Concept Difficulty: Medium
A process is considered to be performing acceptably if its mean is 200. Because it is
expensive to shut down and reconfigure this process, such measures are undertaken only if
there is compelling evidence that the process mean is not 200. Experience has shown that the
process is normally distributed with a standard deviation if 40.
47. What is an appropriate alternate hypothesis in this setting?
A) H1: = 200
B) H1: 200
C) H1: 200
D) H1: 200
11

48. In this situation, a Type I error would be made when it is concluded that is _______
200 when in fact _______ 200.
A) Greater than; less than or equal to
B) Less than; greater than or equal to
C) Equal to; greater than
D) Not equal to; equals
E) Equals; not equal to
Answer: D Type: Concept Difficulty: Medium
49. Suppose in a random sample of size n = 16 a sample average of 185 is observed. The
p-value of this sample statistic is:
A) 0.0668
B) 0.1336
C) 0.3520
D) 0.7039
Answer: B Type: Computation Difficulty: Hard
50. A process improvement consultant has asserted that his techniques reduce variance in
organizational processes. As evidence, he points to a process for which variance had
been assumed to be 36 millimeters2. A random sample of 10 observations taken after
the consultant's efforts indicated a sample standard deviation of 5 millimeters. Which
of the following decisions is correct (assume a = 0.05)?
A) Reject H0: The calculated 2 of 1.25 is less than the lower critical value for 2 of
2.70
B) Do not reject H0: The calculated 2 of 1.25 is less than the upper critical value for 2
of 16.92
C) Do not reject H0: The calculated 2 of 6.25 exceeds the lower critical value for 2 of
3.33
D) Reject H0: The calculated 2 of 6.25 is less than the upper critical value for 2 of
16.92
E) Do not reject H0: The calculated 2 of 6.25 exceeds the lower critical value for 2 of
2.70 but does not exceed the upper critical value for 2 of 19.02
Answer: C Type: Computation Difficulty: Hard
12

Short Answer Questions
51. A major marketing consulting firm asserts that its promotional campaign for Noloss,
an anti-baldness drug, has substantially increased Noloss' market share. Prior to the
campaign, Noloss' market share was 18%. In a random sample of 120 prescriptions for
baldness drugs filled by a pharmacy chain, 29 were for Noloss. Is this sufficient
evidence, at = 0.05, that the promotions have increased Noloss' market share?
Answer: H0: p 0.18, H1: p > 0.18 Reject H0, since calculated Z = 1.76 > Zcrit =
1.645 p-value = 0.0392 It does appear that the marketing firm's effort have
increased Noloss' market share. Type: Computation Difficulty: Medium
52. Suppose a bottle-filling operation is supposed to have a mean of 500ml. Assume it is
normally distributed with a standard deviation of 4ml. A random sample of 16 bottles
yields a sample average of 498.5. Is this sufficient evidence, at = 0.05, that the
process mean is no longer 500 ml?
Answer: H0: = 500, H1: 500 Do not reject H0, since the calculated Z = -1.5 >
Zcrit = -1.645 p-value = 0.1336 It does not appear that the process mean is not
500. Type: Computation Difficulty: Medium
53. Suppose a political consultant is interested in the proportion of the vote his candidate
will receive. He will randomly sample voters and test hypotheses regarding p, the
population proportion. The consultant knows he can control his risk of making a Type
I error. What must he do to control his risk of making a Type II error?
Answer: One way of reducing the risk of a Type II error is to increase sample size. If
the sample size cannot be increased, then the Type II error rate can be reduced by
increasing a, thereby increasing the Type I error rate. Type: Concept
Difficulty: Medium
54. The mean annual sales of a company in 36 of its sales offices over the country are
$23,860,000, with a standard deviation of $2,150,000. A manager quotes the annual
sales of the company to be $25,000,000. Does the sample data provide evidence to
reject the executive's claim, that average annual sales are 25,000,000 at = .01?
Answer: Reject null, z = 3.181 : z = (23,860,000 - 25,000,000)/(2,150,000/6) = -3.181
Type: Computation Difficulty: Medium
13

55. It is claimed that the proportion of people who would vote for some candidate (A) is
45%. Workers for the opponent candidate want to prove that this claim is exaggerated.
They take a random sample of 200 potential voters and find that 80 of them would
vote for candidate A. Compute the test statistic.
Answer:
1.42 (.4 .45) / .45(.55) / 200
A car rental company changes its promotional strategy. The mean number of cars rented per
day before the change was 46. Over the next 25 days, the mean number of cars rented is found
to be 51, with a standard deviation of 8.6. The management wants to know whether an
increase in the cars rented per day has occurred, with a 5% level of significance.
56. Give the test statistic.
Answer: t = 2.907 = (51 - 46)/(8.6/5) Type: Computation Difficulty: Medium
57. State the p-value of this test.
Answer: <0.01 Type: Computation Difficulty: Medium
58. A car manufacturer is considering a new carburetor and is interested in knowing if
there is any increase in the fuel efficiency of the car. A sample of 25 cars installed with
the new carburetor shows an average increase of 1.7 mpg, with standard deviation of
3.9 mpg. Does this data prove that the new carburetor is more fuel-efficient? (Use =
0.01).
Answer: t = 2.179, do not reject H0: t = 1.7/(3.9/5)
Difficulty: Medium
Type: Computation
59. A consumer magazine states that an adult uses more than 5 ml of shampoo per shower.
A survey of 49 adults shows that the mean quantity of shampoo used is 4.8 ml, with a
standard deviation of 0.7 ml. Are these results significant at the = 0.05 level?
Answer: z = -2, reject the null: z = (4.8 - 5)/(0.7/7) Type: Computation
Difficulty: Medium
14

A manufacturer claims that his camera can take 7 photographs per second. A test over 49
cameras selected at random shows that the mean number of photographs in a second is 6.9
with a standard deviation of 0.58.
60. Does this test provide evidence to reject the manufacturer's claim, at = 0.05?
Answer: z = -1.207, do not reject the null: z = (6.9 - 7)/(6.9/7)
Difficulty: Medium
Type: Computation
61. Compute the p-value to test this claim.

Answer: 0.1131: 0.5 - 0.3869 - 0.1131 Type: Computation Difficulty: Medium
An aircraft manufacturer is attempting to determine if the average leg length of the adult male
has changed from 44". A sample of 81 men was selected randomly and the average length was
found to be 45.5", with a standard deviation of 5.5".
62. Test the null hypothesis that the average leg length of the male adult is 44", at =
0.05.
Answer: z = 2.45, reject the null: z = (45.5 - 44)/(5.5/9) = 2.45 Type: Computation
Difficulty: Medium
63. The manufacturer designs the aircraft for adults with a leg length variance of less than
40 inch2. Does this data provide enough evidence to indicate that the variance of the
general adult male population is less 40 inch2, at a 5% level of significance?
Answer: x = 60.5, do not reject the null: (5.5)2(80)/(40) = 60.5 Type: Computation
Difficulty: Medium
64. In 25 randomly selected statistics courses, it is found that a mean of 9% of the students
thinks the course material taught in the course is not practically useful, with a standard
deviation of 4%. A professor remarks that less than 10% of the students think the class
is useless. Does the data substantiate her claim at a 5% level of significance?
Answer: t = 1.25, do not reject the null: t = (0.10 - 0.09)/(0.04/5) = 1.25
15

65. A new medicine is given to 64 infected persons in different cities and a mean success
rate is found to be 96% with standard deviation of 4.3%. State the null and alternative
hypotheses to test the claim that the medicine is 98% effective.
Answer: H0: = .98, H1: .98 Type: Concept Difficulty: Medium
66. A company guarantees that its box of nails never contains less than 100 nails. A
sample of 25 boxes is found to have a mean of 101.2 nails per box, with a standard
deviation of 4.5. Is this evidence sufficient to accept the company's claim, at = 0.05?
Answer: t = 1.33, do not reject the null: t = (101.2 - 100)/(4.5/5) = 1.33
67. A foreign visitor states that the inflation rate in his country is less than 5%. Data for
the last ten years reveals the mean inflation rate to be 5.4% with a standard deviation
of 1.2%. Does this data provide sufficient evidence to reject the claim? (Use = 0.1).
Answer: t = 1.054, do not reject the null: t = (5.4 - 5)/(1.2/ sq rt 10) = 1.054
68. Test, H0: = 100, against H1: 100, with n = 36, the sample mean = 110, and s =
10, and using = 05, the conclusion should be:
Answer: z = 6, reject the null: z = (110 - 100)/(10/6) = 6 Type: Computation
Difficulty: Medium
69. An airline claims that it loses the check-in baggage for only 4% of its passengers. A
survey of 100 passengers reveals that 4.5% of them had their baggage lost. The
standard deviation was 2.1%. Does the survey data contain enough evidence to refute
the airline's claim at = 0.05?
Answer: z = 2.381, reject the null: z = (4.5 - 4)/2.1/10) = 2.381 Type: Computation
Difficulty: Medium
The credit department of a company calculates that it would only make a profit if the average
balance in its accounts is more than $1,500. An accountant samples 100 accounts and finds
the sample mean to be $1,560, with a standard deviation of $175.
16

70. Does this data substantiate the claim that the company is making a profit, at a 5% level
of significance?
Answer: z = 3.429, reject the null: z = (1,560 - 1,500)/(175/10) = 3.429
71. What is the p-value to test the hypothesis that the company is making a profit?
Answer: close to zero, since z > 3.4 Type: Computation Difficulty: Medium
An elevator call button is depressed 64 times and the mean arrival time for the elevator is
found to be 29.1 seconds, with a standard deviation of 3.1 seconds.
72. Test the null hypothesis that the arrival time of the elevator is more than 30 seconds.
(Use = 0.05).
Answer: z = -2.322, reject the null: z = (2.91 - 30)/(3.18) = -2.322
73. Find the p-value to test the null hypothesis that the arrival time of the elevator is more
than 30 seconds.
Answer: 0.0102: 0.5000 - 0.4898 = 0.0102 Type: Computation Difficulty: Medium
74. A machine produces a wire with a thickness of 2.5mm. A sample of 25 wire pieces
produced over the week is examined and the mean is found to be 2.6mm, with a
standard deviation of 0.42mm. The production manager wants to know whether a
change has occurred in the thickness, with a 5% level of significance.
Answer: t = 1.19, do not reject the null: t = (2.6 - 2.5)/(0.42/5) = 1.19
75. A company is selling a new adhesive which it claims will dry in 15 seconds. It is used
for joining 25 different items and the mean drying time is found to be 14.4 seconds,
with a standard deviation of 3.5 seconds. Does this sample data substantiate the
company's claim?
Answer: z = -0.857, do not reject the null Type: Computation Difficulty: Medium
17

The mean age of 100 MBA students is found to be 25.4 years, with a standard deviation of 4.9
years. A professor makes a claim that the age is more than 23 years.
76. Does the sample substantiate the claim? (Use = 0.05).
Answer: z = 4.898, reject the null Type: Computation Difficulty: Medium
77. If the population standard deviation is 5.1, and the true mean is 25.2 years, is the
power of the test very high, medium, or very low?
Answer: very high Type: Computation Difficulty: Hard
78. The police service in a town took a mean time of 7 minutes to reach the required spot
after being summoned. From this week, new cars have been inducted into the service.
Over a sample of 16 emergencies, the mean arrival time has been found to be 6.7
minutes, with a standard deviation of 1.2 minutes. Have the new cars been effective in
reducing the travel time? (Use alpha = 0.05).
Answer: t = 1, do not reject the null Type: Computation Difficulty: Medium
79. You just received the results from the engineering department on the time it takes to
produce your major product. The results stated that, with a sample of 81 items, the
mean production time was 44.25 minutes with a standard deviation of 4 minutes. Last
year it took 45 minutes, at a .05 level of confidence; can you state that production has
decreased?
Answer: With z = -1.6875 and 80 degrees of freedom, you can say that productivity
has significantly increased. Type: Computation Difficulty: Hard
18

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Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

61. Compute the p-value to test this claim.

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

Chapter 7 Hypothesis Testing

Aczel, Complete Business Statistics, Sixth Edition

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