Subject Expert QA – 1 - (2015- 16) Module – 3

MODULE - 3

Q – 1 If a sample of 25 observations reveals a sample mean of 52 and sample variance of 4.2, test that
hypo. That the population mean is 65. [S – 13 – N]

Q – 2 A random sample of size 20 is taken, resulting in a sample mean of 16.45 and a sample standard
deviation of 3.59. At level of significance of 0.05, test the hypothesis that Ho: μ =16 H1: μ ≠ 16.
[W - 13]
Q – 3 A real estate agent claims that the average price of a Flat in Ahmedabad is at most Rs.50, 000. The
standard deviation is s = Rs.8, 500. A sample of 81 condominiums has an average selling price of
Rs.51, 500. Use α = 0.10 level of significance to test the claim. [W – 10]

Q – 4 National Economics and Statistics agency claimed that the average retail onion price was Rs.
2.51/kg. Suppose a survey of 27 retailers is conducted this year to determine whether the price of
onion has increased. The average price found after the study was Rs. 2.55/kg and variance was
0.022. Use alpha of 0.05 to test the assumption. [S – 12 – N]

Q – 5 The average commission charged by full-service brokerage firms on a sale of common stock is Rs.
144, and standard deviation is Rs. 52. Mr. Shah has taken a random sample of 121 trades by his
clients and determined that they paid an average commission of Rs. 151. At a 0.10 significance
level, can Mr. Shah conclude that his clients’ commissions are higher than the industry average?
[S – 11 – E]
Q – 6 It is required to test whether the test whether the temperature required to damage a computer on
an average is less than 110 degrees. Because of the price of testing, a sample of twenty computers
was tested to see what temperature would damage the computer. It was observed that the
damaging temperature averaged 109 degrees with a standard deviation of 3 degrees. Use a = 0.01,
to test if the damaging temperature is less than 110 degrees? [S – 14 - N]

Q – 7 In 16 half hour evening programs, the mean time devoted to commercials was 6.4 minutes with
s1=2 mins. In 16 half hour morning programs the mean time was 5.8 minutes with s2=1.5 minutes.
Test, at 10% level of significance, if the data indicates that the mean time devoted to commercials
is significantly less in the morning? (Assume that the populations are normally distributed with
same but unknown variances) [W – 12]

Q – 8 A marketing firm expects a sale of 500 units of a product per week. An advertisement campaign
was undertaken to increase the sale. To test the effectiveness of the advertisement campaign, a
sample of 20 shops was randomly selected. The mean sales were observed as 515 units with a
standard deviation of 9 units. Is it true that the sales have increased after the advertisement
campaign? Test at 5% significant level. [S – 11]

Q – 9 Nitrosoft estimated last year that 40 percent of potential software buyers were planning to wait to
purchase the new operating system, Window Mak, until an upgrade had been released. After an
advertising campaign to reassure the public, Nitrosoft surveyed 5000 people and found 1800 who
were still unconvinced. At the 5 percent significance level, can the company conclude the
proportion of unconvinced people has decreased? [W – 14 – N]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 10 It is required to test whether the temperature required to damage a computer on an average is
less than 110 degrees. Because of the price of testing, a sample of twenty computers was tested to
see what temperature would damage the computer. It was observed that the damaging
temperature averaged 109 degrees with a standard deviation of 3 degrees. Use  = 0.01, to test if
the damaging temperature is less than 110 degrees? [W – 9]

Q – 11 Mukta arts., a bolywood casting company, is selecting a group of extras for a movie. The ages of the
first 20 men to be interviewed are
50 56 55 49 52 57 56
57 56 59 54 55 61 60
51 59 62 52 54 49
The director of the movie wants men whose ages are fairly tightly grouped around 55 years. Being
a statistics buff of sorts, the director suggests that a standard deviation of 3 years would be
acceptable. Does this group of extras qualify? [S – 12 – N]

Q – 12 An innovator in the motor-drive industry felt that its new electric motor drive would capture 48
percent of the regional market within 1 year, because of the product’s low price and superior
performance. There are 5000 users of motor drives in the region. After sampling 10 percent of
these users a year later, the company found that 43 percent of them were using the new drives. At
significance level of 1 percent, should we conclude that the company failed to reach its market-
share goal? [S – 11 – E]

Q – 13 Before the 1973 oil embargo and subsequent increases in the price of crude oil, gasoline usage in
the US had grown at a seasonally adjusted rate of 0.57 percent per month, with s. d. of 0.10
percent per month. In 15 randomly chosen months between 1975 and 1985, gasoline usage grew
at an average rate of only 0.33 percent per month. At a 0.01 level of significance, can you conclude
that the growth in the use of gasoline had decreased as a result of the embargo and its
consequence? 5 - [W – 12 –N]

Q – 14 According to the US bureau of labor statistics the average weekly earning of a production worker
in 1997 were $424.20. Suppose a labor researcher wants to test to determine whether this figure
is still accurate today. He randomly selects 54 production workers across US and obtains sample
average for their earning is $432.69, with standard deviation of $33.90. Use 5% level of
significance and apply all the method to test hypothesis. [S – 13]

Q – 15 CavinKare Ltd is considering employing one of the two training programs. Two groups were
trained for the same task. Group A was trained by Program 1, and Group B was trained by
program2. For the group A, the time required to train employees had an average of 62.42 hours
and a standard deviation of 0.7497.In the B group, the average was 62.18 hours and the standard
deviation was 0.9762. Which training program has less relative variability in its performance?
(Hint: CV = Standard Deviation\ Mean) [S – 13 – N]

Q – 16 A large manufacturer investigated the service it received from supplier and discovered that, in the
past 32% of all material shipments were received late. However the company recently installed a
JIT system in which supplier are linked more closely to the manufacturing process. A random
sample of 118 deliveries since the JIT was installed reveals that 22 deliveries were late. Use the
sample information to test whether the proportion of late deliveries was reduced significantly. α =
0.05 [S – 13]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q - 17 According to a study conducted in India, 59% of men and 70% of women say that Value for money
is very important factor in purchasing Apparels. Suppose this survey was conducted using 374
men and 481 women, do these data show enough evidence to declare that a significantly higher
proportion of women than men believe that Value for money is very important factor in
purchasing Apparels? Use a 5% significance level. [S – 12 – N]

Q – 18 Suppose that in past years the average price per square foot for warehouses in the India has been
Rs 32.28. A national real estate investor wants to determine whether that figure has changed now.
The investor hires a researcher who randomly samples 19 warehouses that are for sale across the
India and finds that the mean price per square foot is Rs 31.67, with a standard deviation of Rs
1.29. If the researcher uses a 5% level of significance, what statistical conclusion can be reached?
What are the hypotheses? [W – 10 – E] & [W – 11]

Q – 19 A company is considering two different TV advertisements for promotion of a new product.

Management believes that advertisement A is more effective than advertisement B. Two identical
test market areas are selected. A random sample of 60 customers who saw advt. A, 18 tried the
product. A random sample of 100 customers who saw advt. B, 22 tried the product. Does this
indicate that advertisement A is more effective than advertisement B, if a 5% level of significance
is used? [W – 9] & [S – 14 - N]

Q – 20 A credit insurance organization has developed a new high-tech method of training new sales
personnel. The company sampled 16 employees who were trained the original way and found
average daily sales to be Rs.688 and the sample standard deviation was Rs.32.63. They also
sampled 11 employees who were trained using the new method and found average daily sales to
be Rs.706 and the sample standard deviation was Rs.24.84. At α = 0.05, can the company conclude
that average daily sales have increased under the new plan? 4 - [W – 12 –N]

Q – 21 A team of eye surgeons has developed a new technique for a risky eye operation to restore the
sight of people blinded from certain disease. Under the old method, it is known that only 30 % of
the patients who undergo this operation recover their eyesight. Suppose that surgeons in various
hospitals have performed a total of 225 operations using the new method and that 88 have been
successful (the patients fully recovered their sight). Can we justify the claim that the new method
is better than the old one? (Use a 1% level of significance). [W – 10]

Q – 22 In response to criticism concerning lost mail, the Indian Postal Service initiated new procedures to
alleviate this problem. The postmaster general had been assured that this change would reduce
losses to below the historic loss rate of 0.3 percent. After the new procedures had been in effect
for 2 months, the IPS sponsored an investigation in which a total of 8000 pieces of mail were
mailed from various parts of the country. Eighteen of the test pieces failed to reach their
destinations. At a significance level of 0.10, can the PMG conclude that the new procedures
achieved their goal? 5 - [W – 12 –N]

Q – 23 A computer manufacturer estimates that its line of minicomputer has, on average, 8.4 days of
down time per year. To test this claim, researcher contacts seven companies that own one of these
computers and is allowed to access company computer record. It is determined that, for the
sample, the average number of down time is 5.6 with a sample standard deviation of 1.3 days.
Assuming that number of down time days is normally distributed and level of significant is 1 %,
test to determine whether these minicomputers actually 8.4 days down time in the entire
population. [W – 14]
MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert
Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 24 Fun Republic knows that a certain hit movie ran an average of 84 days in each city, and the
corresponding standard deviation was 10 days. The manager of the Mumbai region was interested
in comparing the movie’s popularity in his region with that all of India’s other theaters. He
randomly chose 75 theaters in his region and found that they ran the movie an average of 81.5
days. State appropriate hypothesis for testing whether there was a significant difference in the
length of the picture’s run between Fun republic in the Mumbai district and all of India’s other
theaters. At a 1 percent significance level, test these hypotheses. [S – 12 – N]

Q – 25 To celebrate their first-anniversary, Paul decided to buy a pair of diamond earrings for his wife. He
was shown nine pairs with marquise gems weighing approximately 2 carats per pair. Because of
differences in the colours and qualities of the stones, the prices varied from set to set. The average
price was Rs.2990, and the sample standard deviation was Rs.370. He also looked at six pairs with
pear-shaped stones of the same 2 carat approximate weight. These earrings had an average price
of Rs.3065, and the sample standard deviation was Rs.805. On the basis of this evidence, can Paul
conclude (at a significance level of 0.05) that pear-shaped diamonds cost more, on average than
marquise diamonds? 4 - [W – 12 –N]

Q – 26 Two different areas of a large eastern city are being considered as sites for day– care centers. Of
200 households surveyed in one station, the proportion in which the mother worked full-time was
0.52. In another section, 40 % of the 150 households surveyed had mothers working at full-time
jobs. At the 0.04 level of significance, is there a significant difference in the proportion of working
mothers in the two areas of the city? [W – 11]

Q – 27 Students Against Drunk Driving has targeted seat-belt usage as a positive step to reduce accidents
and injuries. Before a major campaign at one high school, 44 percent of 150 drivers entering the
school parking lot were using their seat belts. After the seat-belt awareness program, the
proportion using seat belts had risen to 52 percent in a sample of 200 vehicles. At a 0.04
significance level, can the students conclude that their campaign was effective? [W – 10 – E]

Q – 28 For the above data in Q.4 (a), test the following hypothesis: Ho: U1 – U2 = 0 against H1; U1 – U2 =/
0 at ALPHA = 0-05. [S – 12]

Q – 29 A consumer-research organization routinely selects several car models each year and evaluates
their fuel efficiency. In this year’s study of two similar subcompact models from two different
automakers, the average gas mileage for 12 cars of brand A was 27.2 miles per gallon, and the
standard deviation was 3.8 mpg. The nine brand B cars that were tested average 32.1 mpg, and the
standard deviation was 4.3 mpg. At α= 0.01, should it conclude that brand A cars have lower
average gas mileage than do brand B cars? [S – 11 – E]

Q – 30 Suppose that for years the mean of population I has accepted to be the same as the mean of
population II, but that now population I is believed to have a greater mean than population II.
Letting α = 0.05 and assuming the populations have equal variances and x is approximately
normally distributed, use the following data to test this belief. [W – 11 – N]
Sample I : 43.6 45.7 44.0 49.1 45.2 45.6 40.8 46.5 48.3 45.0
Sample II : 40.1 36.4 42.2 42.3 43.1 38.8 37.5 43.3 41.0 40.2

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 31 Nine computer-components dealers in major metropolitan areas were asked for their prices on
two similar colour inkjet printers. The results of this survey are given below. At α=0.05, is it
reasonable to assert that, on average, the ABC printer is less expensive than XYZ printer?
Dealer 1 2 3 4 5 6 7 8 9
ABC 250 319 285 260 305 295 289 309 275
XYZ 270 325 269 275 289 285 295 325 300 [S – 15 – N]

Q – 32 ABC distributing company hypothesizes that a phone calls is more effective than an E –mail in
speeding up collection of slow accounts. Two groups of slow accounts were contacted, one by each
method, and the length of time between making the call or sending the E-mail and the receipt of
payment was recorded:
Methods used Days to collection
E-Mail 10 8 9 11 11 14 10
Phone Call 7 4 5 4 8 6 9
At α=0.05, should ABC conclude that slow accounts are collected more quickly with calls than with
E-mail? [W – 14 – N]

Q – 33 Use the data given to test the following hypothesis

H0 : μ = 25 Ha : μ ≠ 25
Sample Mean = 28.1
Size of Sample = 57
Population standard deviation = 8.46
Level of significance = 0.01 [S – 15]

Q – 34 Two business schools want to determine if the mean scores of CAT for the students in their
institutes are similar. A simple random sample of 20 students is taken from the first business
school (A) and a simple random sample of 25 students is taken from the second business school
(B). The survey yields the following results:
A B
Average score 750 650
Sample Standard Deviation 80 90
Test if there is significant difference in the mean CAT scores of the students of school A & school B
(use 0.01 level of significance) [W – 12]

Q – 35 A suit has been filed against a large company charging it with gender discrimination stating that
its female employees are paid less than male employees for the same type of work. The legal
officer of the company selects independent random samples of male and female employees with
same job classification and obtain information on the hourly wages paid to them with the
following results
Females Males
Sample Size 17 12
Mean wage Rs. 18.40 Rs. 22.20
SD wage Rs. 2 .20 Rs. 2.80
State the null and alternative hypothesis. Test your null hypothesis at α = 0.01and draw your
conclusion. [W – 13 - N]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 36 An urban planning group is interested in knowing the difference between the mean household
incomes for two localities in a large metropolitan area. Independent random samples of
households in the localities provided the following results.
Locality 1 Locality 2
Sample Size1 = 8 Sample Size2 = 12
Sample mean1 = Rs.15700 Sample Mean2 = Rs.14500
Sample SD1 = Rs.700 Sample SD2 = Rs. 850
For the above data, test the following hypothesis, H0 : μ1 - μ2 = 0 against H1 : μ1 - μ2 ≠ 0 at α =
0.05. Construct a 95% confidence interval for the difference between the mean incomes in the two
localities. [S – 12] & [S – 15]

Q – 37 A tree nursery has been experimenting with fertilizer to increase the growth of seedlings. Samples
of 35 two year-old pine trees are grown with a fertilizer. A second sample of 35 two-year old pine
trees are grown for three more years under identical conditions but no with fertilizer. Tree growth
is measured over the three-year period with the following results:
Trees with Fertilizers Trees without Fertilizers
n1 = 35 n2 = 35
X ￣ 1= 38.4 inches X￣2 = 23.1 inches
σ1= 9.8 inches σ2 = 7.4 inches
Does the data support the theory that the population of trees with the fertilizer grew significantly
larger during the period in which they were fertilized than the non fertilized trees? Use α=.01
[S – 11]

Q – 38 Use the following data to test the hypothesis : Ho : μ1-μ2=0 Ha : μ1-μ2 ≠ 0 (α = 0.05)
Sample 1 Sample 2
90 88 80 78 85 82
88 87 91 90 80 76
81 84 84 77 75 79
88 90 91 82 83 88
89 95 97 80 90 74
88 83 94 81 75 76
81 83 88 83 88 77
87 87 93 86 90 75
88 84 83 80 80 74
95 93 97 89 84 79
[W – 11 – N]

Q – 39 Eklavya pvt. Ltd. is developing a compact kidney dialysis machine, but its chief manager, is having
trouble controlling the variability of the rate at which fluid moves through the device. Medical
standards require thathourly flow be 4 liters, plus or minus 0.1 liter, 80 percent of the time.
Manager in testing the prototype has found that 68 percent of the time, the hourly flow is within
0.08 liter of 4.02 liters. Does the prototype satisfy the medical standards?
5 - [S – 12 – N] & 5 - [W – 12 –N]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 40 Is there a difference in the proportion of the construction workers who are under age 35 years of
age and the telephone repair people who are under 35 years age? Suppose a study is conducted in
Calgary, Alberta, using random sample of 338 construction workers and 281 telephone repair
people. The sample of construction include 297 people under 35 years of age and the sample of
telephone repair people include 192 people under that age. Use this data to construct a 90%
confidence interval to the difference in proportions of people under 35 years of age among
construction workers and telephone repair people. [W – 14]

Q – 41 A company has developed a new CFL bulb that seems to burn longer than most residential bulbs.
To determine how long these bulb burn, the company randomly selects a sample of these CFLs and
burn them in the laboratory. The output shown here is a portion of the analysis from this effort.
Mean: 2198 hrs
Standard deviation: 153 hrs
Sample size: 84
Confidence level (90%): 27.77
Discuss the output. 4 - [S – 12 – N]

Q – 42 Using given information obtain confidence interval to estimate p1-p2.

n1 = 430, n2 = 399, x1 = 275, x2 = 275, level of confidence = 85%. 3 - [W – 11 – N]

Q – 43 A cosmetic company launched a new brand of nail polish by advertising on different T.V. channels.
To find out the percentage of people who had seen the advertisement a random sample of 100
people were questioned. Out of these 60 responded in the affirmative. Estimate a 90% confidence
interval for the true proportion of people who had seen the advertisement. [W – 12]

Q – 44 A random sample of twelve 750 ml bottles of a certain brand of soft drink is taken and examined
to see the exact quantity of soft drink in them. The following data represent the quantity of soft
drink in ml: 746, 757, 752, 742, 748, 741, 754, 750, 758, 751, 744, and 751. Assuming the volume
of soft drink in a bottle has normal distribution; obtain a 95% confidence interval for the mean
volume. [W – 13 - N]

Q – 45 The City Police Chief has recently instituted a crackdown on drug dealers. Since the crackdown
began, 750 of the 12,368 drug dealers in the city have been caught. The mean value of drugs found
on these 750 dealers is Rs.250000. The standard deviation of the value of drugs for these 750
dealers is Rs.41000. Construct for the Chief a 90 percent confidence interval for the mean value of
drugs possessed by city’s drug dealers. 5 - [W – 12 –N]

Q – 46 The mean of a certain production process is known to be 51 with a standard deviation of 2.5. The
production manager may welcome any change in mean value towards higher side but would like
to safeguard against decreasing value of mean. He takes a sample of 12 items that gives a mean
value of 49.5. What inference should the manager take for the production process on the basis of
sample results? Use 5% level of significance for the purpose. [S – 10]

Q – 47 Suppose that a toy manufacturer offers a rebate in order to determine what customers are actually
paying (after discounts) for a product. The manufacturer receives 1600 sales receipts back from
customers in connection with rebate offer. Assume that the mean purchase price is Rs.25.00 with a
standard deviation of Rs.3.00.
a. Construct a 95% confidence interval for the purchase price.
b. Construct a 90% confidence interval for the purchase price. [W – 10]
MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert
Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 48 A regular Times New poll includes the question, “Do you approve or disapprove of the way Mr.
Prime Minister is handling foreign policy?" In a recent poll, there were 1,131 respondents, of
whom 37% answered “approve” and 56% answered “disapprove"(the other 7% either didn't
answer or said they had no opinion).
a. Construct a 90% confidence interval of the true proportion of the population who
approve of Mr. Prime Minister's foreign policy.
b. Does this poll contain convincing evidence that more people disapprove than approve?
Explain. [W – 10]

Q – 49 A research firm provides monthly mean apartment rental costs for a city. Assume the population
standard deviation is $220 and the desired margin of error is $50. Find the recommended sample
sizes in the following cases:
1) 90% confidence interval estimate of the population rental cost
2) 95% confidence interval estimate of the population rental cost
3) 99% confidence interval estimate of the population rental cost
4) If the desired margin of error is fixed, what happens to the sample size as the confidence
level increases? [W – 13 - N]

Q – 50 In an automotive safety test conducted by the Ahmedabad Highway Safety Research Centre, the
average tire pressure in a sample of 62 tires was found to be 24 pounds per square inch, and the
standard deviation was 2.1 pounds per square inch.
I. What is the estimated population standard deviation for this population? (There are
about a million cars registered in Ahmedabad).
II. Calculate the estimated standard error of the mean.
III. Construct a 95 percent confidence interval for the population mean. 5 - [W – 12 –N]

Q – 51 For a test market, find the sample size needed to estimate the true proportion of consumers
satisfied with a certain new product within + 0.04 at the 90% confidence level. [W - 13]

Q – 52 In future, the New York Times decides its survey must have a margin or error no greater than
1.2%, with confidence level 95%. What sample size do they need to achieve this? [W – 10]

Q – 53 Determine the sample size under the following condition:

1. To estimate with σ = 44, E = 3, and 95% confidence
2. To estimate p with p unknown, E = 0.04 and 98% confidence. [S – 11]

Q – 54 Suppose you are sampling from a population with population standard deviation =1000. You want
the standard deviation of the sample mean to be at most 25. what is the minimum sample size you
should use? [W – 11]

Q – 55 The mean of a random sample of 1000 units is 17.6 and the mean of another random sample of
800 units is 18. Can it be concluded that both the samples come from the same population with
standard deviation (S.D.) = 2.6? [S – 10]

Q – 56 Suppose the mean idle time of a machine is to be estimated within 1.15 hour of the true mean idle
time with 98% level of confidence. It is known from past data, that the idle time of a machine is
normally distributed with a standard deviation of 2 hours. Compute the appropriate sample size.
[W – 9] & [W – 12]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module – 3
Q – 57 Gujarat Technological University is performing a survey of the annual earnings of last year’s
graduates from its B-school. It knows from past record that the standard deviation of the annual
earning of these graduates is about $1500.How large a sample size should the university take in
order to estimate the mean annual earnings of last year’s class within $500 and at a 95%
confidence level? [S – 13 – N]

Q – 58 Two independent samples provided the following results:

Sample Size Mean Sum of squares of
deviations from their respective means
I 10 12 120
II 12 13 144
Can the two samples be regarded as drawn from the same normal population? [S – 10]

Q – 59 State Central Limit Theorem. Suppose a random sample of 660 items is taken. Let the sample
population proportion is 0.58. What is the probability that the sample proportion is greater than
0.6? [S – 12]

MBA Sem – 1 K. D. SiR – 9898281509 Subject Expert