STAT 270 FINAL EXAM REVIEW

1. The mean family income in Alberta is $28,500 with a standard deviation of $2600. What is the
probability that a sample of 60 families from Alberta will have a mean income between $28,000
and $29,500?

2. As of 2020, Canadians pay the highest mobile bills in the entire world. The latest global
telecom report from Merrill Lynch reports the average Canadian monthly cell phone bill to be
$56 with a population standard deviation of $12.26. Suppose another agency questions this
value and takes their own sample of 220 Canadian cell phone bills. They find the average cell
phone bill to be $62.
a. What is the point estimate of the average Canadian cell phone bill?
b. Construct a 90% confidence interval for the mean cell phone bill in Canada.
c. Do the results from the new study support the Merrill Lynch value?

3. Suppose that during any hour in a given store, the average sales are $448, with a standard
deviation of $21. What is the probability that a random sample of 49 different shopping hours
will produce a sample mean between $441 and $446?

4. According to a study done on credit card debt, close to 28% of the people who have credit
cards are at the total limit on the card(s). Suppose 600 credit card holders are surveyed. What is
the probability that more than 180 of them are at the total limit on their card(s)?

5. According to an American Express study, the average cost for an international trip for North
American business travelers is $3452. Suppose another research company takes a random
sample of 30 business travelers and determines that the sample average cost is $3055, with a
sample standard deviation of $342.
a. Construct a 98% confidence interval for the population mean from these sample data.
b. Does the $3452 figure found by American Express fall into the confidence interval? Would
you say it was a reasonable value?

6. A bank manager wants to determine the amount of the average total monthly deposits per
customer at the bank. She believes an estimate of the amount using a strong confidence
interval will be sufficient. How large a sample should she take to be within $200 of the actual
average with 99% confidence? She assumes the standard deviation of the total monthly
deposits for all customers is about $1000.

7. The average weekly wage for Alberta workers was $1014 in January 2011 (note this figure
includes overtime and is before any deductions). Suppose a labor researcher wants to
investigate the accuracy of this figure. The researcher randomly selects 25 Alberta workers and
finds a sample average weekly wage of $975 with a sample standard deviation of $85. Test
whether the mean weekly earnings of Alberta workers are less that the reported value using a
0.05 level of significance.
 8. A telephone company claims that the mean duration of all long-distance calls made by its
residential customers is 10 minutes with a standard deviation of 3.80 minutes. A random
sample of 100 long-distance calls made by its residential customers taken from the records of
this company showed that the mean duration of calls for this sample is 9.20 minutes. Test the
hypothesis that the mean duration of all long-distance calls made by a residential customer is
different from 10 minutes at a 0.02 level of significance.

9. The following table lists monthly food expenditure and monthly income for seven
households. The amounts are listed in hundreds of dollars.

Income (x) 35 48 23 39 15 28 25
Food Expenditure (y) 9 14 8 11 5 8 9

a. Calculate the coefficient of correlation. What does the coefficient imply about the
relationship between monthly income and food expenditure?
b. Find the least squares regression line for the data on incomes and food expenditures.
c. Predict the monthly food expenditures for a household with a monthly income of $4000.

10. The following table lists the basic earnings per share (EPS) from 2010 to 2019 for
McKendrick and Sons Inc.

Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Basic EPS ($) 0.75 0.86 0.98 0.8 0.85 0.90 1.20 1.30 1.42 1.59

a. Use the least squares method to determine the regression line for predicting the basic EPS.
Round values to 3 digits past the decimal.
b. Predict the basic EPS for 2026.

11. Many students have had the unpleasant experience of panicking on a test because the first
question was exceptionally difficult. The arrangement of test items was studied for its effect on
anxiety. A group (Group 1) of students are randomly selected to do a test whose questions are
arranged from Easy to Difficult. The other group (Group 2) of students are randomly selected to
do the same test but the questions are arranged from Difficult to Easy. Is there sufficient
evidence to support the claim that the mean scores of the two population are different at 5%?

Group 1: n = 16 𝑥̅ = 31.7 s = 4.2

Group 2: n = 25 𝑥̅ = 27.5 s = 6.9

12. A study investigated survival rates for in-hospital patients who suffered heart attacks.
Among 58593 patients who had heart attacks during the day, 11604 survived and were
discharged. Among 28155 patients who suffered heart attacks at night, 4139 survived and were
discharged. Test at 0.005 significance level, is the survival rate of having a heart attack during
the day significantly higher than having it during the night?
13. On average, more than 8 million people fly on planes to reach their destinations each day.
One airline recorded the number of people who do not turn up for their flights in a day. Their
results revealed that approximately 8% of people do not show up for their flights based on a
sample of 800 passengers.
a. Use this information to construct a 98% interval estimate for the proportion of people who
do not show up for their flight on a daily basis based on the airlines study. Keep 3 decimals for
the estimate proportions.
b. Assume that 8 million people are booked on flights each day. Estimate the total number of
people who do not show up for flights each day based on the confidence interval from [a].

14. Listed below are the heights (in inch) for the simple random sample of 10 supermodels.
According to demography, Canadian women have the mean height of 64 inches. Use 1%
significance level to test the claim that the supermodels have heights with a mean that is
greater than the mean height of women in the general population.

70 71 69 69 69 70 71 70 70 69.5

15. A sample of 40 children in Alberta showed that the mean time they spend watching TV is 26
hours per week with standard deviation of 4 hours. Another sample of 36 BC children showed
that the mean time they spend watching TV is 23.5 hours per week with standard deviation of 5
hours. At the 2.5% significance level, can you conclude that the mean time spent watching TV by
children in Alberta is greater than that for children in BC?

16. Moore’s clothing for men is looking at opening a retail outlet in Chinook Mall. However, they
are concerned about the amount of male traffic in the mall. The mall sales team claims that at
least 40% of the male population in the community visit the mall every week. To test this claim,
Moore’s selected a random sample of 150 households with a male adult present and asked
them if they visited the mall every week. Seventy-one of the respondents replied “yes” to the
question. Based on the sample data and a 5% significance level, can the sales team conclude
that the proportion of males in the community visiting the mall every week exceeds 40%?

17. A new bar is choosing a name. The possibilities have been reduced to three and then 150
individuals are sampled for their preference. Do the data indicate any difference in the
preferences? Test at α=0.10.
The Green Starfish The Pink Dolphin The Yellow Elephant
64 46 40

18. An entrepreneur wants to open an appliance repair shop. She would like to know roughly
what the average home repair bill is, including the charge for the service call for appliance
repair in the area. She wants the estimate to be within $15 of the actual figure. She assumes the
standard deviation for average home repair bills is $146. How large a sample should the
entrepreneur take if she wants to be 95% confident of the results?
19. The following statistics were obtained from a hotel on McLeod Trail with an in-house
restaurant. The owners are interested in the relationship between the number of rooms
occupied (x) and the restaurant revenue (y) on a given day.

Rooms Restaurant Rooms Restaurant

Occupied Revenue Occupied Revenue

20 $1,471 25 $1,018

50 $1,261 26 $1,148

23 $1,667 43 $1,471

46 $1,750 23 $1,199

43 $1,638 34 $1,573

48 $1,673 43 $1,635

22 $1,473 24 $1,333

46 $1,341 55 $1,209

35 $1,765 33 $1,349

43 $1,817 38 $1,377

52 $1,163 28 $1,405

27 $1,115 23 $1,353

42 $1,825

Test the strength of the linear relationship between these two-variable statistics at the 0.05
significance level. (Keep 4 decimals for r)

20. In a recent survey of 3600 Canadians over the age of 18 it was found that 540 had used their
smart phones to make a purchase.
a. Obtain a point estimate for the proportion of Canadians over the age of 18 that have used
their smart phones to make a purchase.
b. Construct a 90% confidence interval for the population proportion of Canadians over the age
of 18 that have used their smartphone to make a purchase. Express interval to 3 decimal places.
c. Would it be reasonable for a smart phone company to report that 40% of adults are using
their smartphones to make purchases given the interval from (b)? Explain.
21. Listed below is the reported rate of return (in percent) for a sample of 12 taxable money
market funds. Perform a hypothesis test to decide if it is it reasonable to conclude that the
mean rate of return is more than 4.5 percent at the 5% significance level? Keep at least 3
decimals for intermediate calculations.

4.73 4.62 4.55 4.42 4.58 4.70

4.24 5.02 4.68 4.15 4.30 4.66

22. The machine used to fill 2 litre pop bottles at The Pop Stop is known to have a standard
deviation of 0.05 litres. The quality control manager tests the fill rates on the machine regularly
to ensure the machine is properly calibrated. He has taken a random sample of 50 bottles and
will shut down the machine for recalibration if the mean fill rate of these 50 bottles is less 1.98
litres or greater than 2.02 litres. What is the probability that the quality control manager will
shut down the machine for recalibration? Express the probability to 4 decimal places. Include a
labeled sketch of the curve.

23. In many colleges and universities, instructors are being asked to redesign their courses from
lecture-centered models to student-centered models where students work in groups and
proceed at their own pace. In one school where this model was being introduced, students
could enroll in either model. Of the 740 students who enrolled in the lecture centered model,
363 passed; whereas, of the 580 who enrolled in the student centered model, 330 passed. Does
the evidence suggest that the student-centered model results in a higher pass rate than the
lecture-centered model? Use a 0.05 level of significance to test this statement. Keep at least 3
decimals in intermediate calculations.

24. The Consumer Price Index (CPI) in Canada is a measurement of changes in consumer prices
in Canada. Basically, it tracks the cost of living in Canada. The following data shows the CPI over
a 10-year period.

Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CPI 100.0 102.8 104.7 107.0 109.1 111.5 114.1 114.4 116.5 119.9

a. Determine the correlation coefficient. Interpret your answer.

b. Determine the equation of the regression line. Keep 3 decimals for the slope and y-intercept.
c. Forecast the CPI for 2023 using the trend line from (b).
25. A small printing business is interested in learning if the number of print orders is uniform
throughout the work week. They are currently open Monday through Saturday and closed on
Sundays. The owner tracks the number of print orders for a week and records the following
daily counts. At the 1% significance level, test whether the number of print orders is distributed
uniformly throughout the week. A table is included should you wish to organize your data.

Day Observed
Monday Orders
21
Tuesday 12
Wednesday 10
Thursday 23
Friday 19
Saturday 11
Total

26. Earthquakes’ magnitude is usually measured in Richter scale (from 1 to 10). In Vancouver
area, magnitudes of earthquakes are normally distributed with mean of 2.7 and standard
deviation of 1.8.
a. Earthquakes with magnitudes less than 2.5 are considered “micro-earthquakes” that are not
felt. A random earthquake in Vancouver area is selected, find the probability that it will not be
felt.
b. Earthquakes with magnitude above 4 will cause indoor items to shake. 10 recorded
earthquakes in Vancouver area are randomly sampled, find the probability that their mean
magnitude will at least cause indoor items to shake.

27.A sales firm is interested in the percentage of Americans aged 25 to 29 that are unmarried.
How large a sample is necessary to estimate the true proportion of unmarried Americans in this
age group within 5% error with 90% confidence?

28. Suppose the coffee industry claims that the average Canadian adult drinks 1.8 cups of coffee
per day. To test this claim, a random sample of 36 adults was selected, and their average coffee
consumption was found to be 1.9 cups per day with a sample standard deviation of 0.5 cups.
Use a 5% level of significance to test whether Canadian adults drink 1.8 cups of coffee per day
or not.

29. A marine sales dealer finds that the average price of a previously owned boat is $6492. He
decides to sell boats that will appeal to the middle 66% of the market in terms of price. Find the
maximum and minimum prices of the boats the dealer will sell. The standard deviation is $1025,
and the variable is normally distributed. Would a boat priced at $5550 be sold in this store?
30. The percentage of physicians who are women is 44%. In a survey of physicians employed by
a small medical teaching university, 39 of 75 randomly selected physicians were women. At the
10% significance level, does the proportion of women physician exceed 44%?

31. A country operated a plan to change its energy landscape 10 years ago. The results before
and after are listed below. Is there sufficient evidence at 5% significance level to support the
government’s claim that its energy landscape has changed significantly?

2021
2011 Distribution
Energy Type Distribution in billions of
in percentage tons of oil
equivalent
Hydro-electric Power 15% 30
Oil (gasoline, diesel and gas) 20% 40
Coal 50% 70
Renewable Source (natural alcohol) 10% 20
Other (wind and geothermal) 5% 10
Total