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# Test bank For Applied Statistics in Business and Economics 5th Edition by Doane

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Applied Statistics in Business and Economics 5th Edition by Doane

Chapter 02

Data Collection

True / False Questions

 1 Categorical data have values that are described by words rather than numbers. True    False

 2 Numerical data can be either discrete or continuous. True    False

 3 Categorical data are also referred to as nominal or qualitative data. True    False

 4 The number of checks processed at a bank in a day is an example of categorical data. True    False

 5 The number of planes per day that land at an airport is an example of discrete data. True    False

 6 The weight of a bag of dog food is an example of discrete data. True    False

 7 In last years annual report, Thompson Distributors indicated that it had 12 regional warehouses. This is an example of ordinal level data. True    False

 8 Nominal data refer to data that can be ordered in a natural way. True    False

 9 This year, Oxnard University produced two football All-Americans. This is an example of continuous data. True    False

 10 The type of statistical test that we can perform is independent of the level of measurement of the variable of interest. True    False

 11 Your weight recorded at your annual physical would not be ratio data, because you cannot have zero weight. True    False

 12 The level of measurement for categorical data is nominal. True    False

 13 Temperature measured in degrees Fahrenheit is an example of interval data. True    False

 14 The closing price of a stock is an example of ratio data. True    False

 15 The Statistical Abstract of the United States is a huge annual compendium of data for the United States, and it is available online free of charge. True    False

 16 Ordinal data can be treated as if it were nominal data but not vice versa. True    False

 17 Responses on a seven-point Likert scale are usually treated as ratio data. True    False

 18 Likert scales are especially important in opinion polls and marketing surveys. True    False

 19 Ordinal data are data that can be ranked based on some natural characteristic of the items. True    False

 20 Ratio data are distinguished from interval data by the presence of a zero reference point. True    False

 21 It is better to attempt a census of a large population instead of relying on a sample. True    False

 22 Judgment sampling and convenience sampling are nonrandom sampling techniques. True    False

 23 A problem with judgment sampling is that the sample may not reflect the population. True    False

 24 When the population is large, a sample estimate is usually preferable to a census. True    False

 25 Sampling error is avoidable by choosing the sample scientifically. True    False

 26 A sampling frame is used to identify the target population in a statistical study. True    False

 27 By taking a systematic sample, in which we select every 50th shopper arriving at a specific store, we are approximating a random sample of shoppers. True    False

 28 A worker collecting data from every other shopper who leaves a store is taking a simple random sample of customer opinion. True    False

 29 Creating a list of people by taking the third name listed on every 10th page of the phone book is an example of convenience sampling. True    False

 30 Internet surveys posted on popular websites have no bias since anyone can reply. True    False

 31 Analysis of month-by-month changes in stock market prices during the most recent recession would require the use of time series data. True    False

 32 A cluster sample is a type of stratified sample that is based on geographical location. True    False

 33 An advantage of a systematic sample is that no list of enumerated data items is required. True    False

 34 Telephone surveys often have a low response rate and fail to reach the desired population. True    False

 35 Mail surveys are attractive because of their high response rates. True    False

 36 A problem with convenience sampling is that the target population is not well defined. True    False

 37 If you randomly sample 50 students about their favorite places to eat, the data collected would be referred to as cross-sectional data. True    False

 38 The number of FedEx shipping centers in each of 50 cities would be ordinal level data. True    False

 39 Internet surveys posted on popular websites such as MSN.com suffer from nonresponse bias. True    False

 40 Different variables are usually shown as columns of a multivariate data set. True    False

 41 Each row in a multivariate data matrix is an observation (e.g., an individual response). True    False

 42 A bivariate data set has only two observations on a variable. True    False

 43 Running times for 3,000 runners in a 5k race would be a multivariate data set. True    False

 44 Running times for 500 runners in a 5k race would be a univariate data set. True    False

 45 A list of the salaries, ages, and years of experience for 50 CEOs is a multivariate data set. True    False

 46 The daily closing price of Apple stock over the past month would be a time series. True    False

 47 The number of words on 50 randomly chosen textbook pages would be cross-sectional data. True    False

 48 A Likert scale with an even number of scale points between Strongly Agree and Strongly Disagree is intended to prevent neutral choices. True    False

 49 Private statistical databases (e.g., CRSP) are usually free. True    False

Multiple Choice Questions

50. An investment firm rates bonds for AardCo Inc. as B+, while bonds of Deva Corp. are rated AA. Which level of measurement would be appropriate for such data?

 A. Nominal

 B. Ordinal

 C. Interval

 D. Ratio

51. Which variable is least likely to be regarded as ratio data?

 A. Length of time required for a randomly chosen vehicle to cross a toll bridge (minutes)

 B. Weight of a randomly chosen student (pounds)

 C. Number of fatalities in a randomly chosen traffic disaster (persons)

 D. Students evaluation of a professors teaching (Likert scale)

52. Which of the following is numerical data?

 B. The brand of cell phone you own

 C. Whether you have an American Express card

 D. The fuel economy (MPG) of your car

53. Measurements from a sample are called:

 A. statistics.

 B. inferences.

 C. parameters.

 D. variables.

54. Quantitative variables use which two levels of measurement?

 A. Ordinal and ratio

 B. Interval and ordinal

 C. Nominal and ordinal

 D. Interval and ratio

55. Temperature in degrees Fahrenheit is an example of a(n) __________ variable.

 A. nominal

 B. ordinal

 C. interval

 D. ratio

56. Using a sample to make generalizations about an aspect of a population is called:

 A. data mining.

 B. descriptive statistics.

 C. random sampling.

 D. statistical inference.

57. Your telephone area code is an example of a(n) ____________ variable.

 A. nominal

 B. ordinal

 C. interval

 D. ratio

58. Which is least likely to be regarded as a ratio variable?

 A. A critics rating of a restaurant on a 1 to 4 scale

 B. Automobile exhaust emission of nitrogen dioxide (milligrams per mile)

 C. Number of customer complaints per day at a cable TV company office

 D. Cost of an eBay purchase

59. Automobile exhaust emission of CO2 (milligrams per mile) is ____________ data.

 A. nominal

 B. ordinal

 C. interval

 D. ratio

60. Your rating of the food served at a local restaurant using a three-point scale of 0 = gross, 1 = decent, 2 = yummy is ___________ data.

 A. nominal

 B. ordinal

 C. interval

 D. ratio

61. The number of passengers bumped on a particular airline flight is ____________ data.

 A. nominal

 B. ordinal

 C. interval

 D. ratio

62. Which should not be regarded as a continuous random variable?

 A. Tonnage carried by a randomly chosen oil tanker at sea

 B. Wind velocity at 7 oclock this morning

 C. Number of personal fouls by the Miami Heat in a game

 D. Length of time to play a Wimbledon tennis match

63. Which of the following is not true?

 A. Categorical data have values that are described by words rather than numbers.

 B. Categorical data are also referred to as nominal or qualitative data.

 C. The number of checks processed at a bank in a day is categorical data.

 D. Numerical data can be either discrete or continuous.

64. Which of the following is true?

 A. The type of charge card used by a customer (Visa, MasterCard, AmEx) is ordinal data.

 B. The duration (minutes) of a flight from Boston to Minneapolis is ratio data.

 C. The number of Nobel Prize-winning faculty at Oxnard University is continuous data.

 D. The number of regional warehouses owned by Jankord Industries is ordinal data.

65. Which statement is correct?

 A. Judgment sampling is preferred to systematic sampling.

 B. Sampling without replacement introduces bias in our estimates of parameters.

 C. Cluster sampling is useful when strata characteristics are unknown.

 D. Focus groups usually work best without a moderator.

66. A Likert scale:

 A. yields interval data if scale distances are equal.

 B. must have an odd number of scale points.

 C. must have a verbal label on each scale point.

 D. is rarely used in marketing surveys.

67. Which is most nearly correct regarding sampling error?

 A. It can be eliminated by increasing the sample size.

 B. It cannot be eliminated by any statistical sampling method.

 C. It can be eliminated by using Excels =RANDBETWEEN() function.

 D. It can be eliminated by utilizing systematic random sampling.

68. Which statement is false?

 A. Random dialing phone surveys have low response and are poorly targeted.

 B. Selection bias means that many respondents dislike the interviewer.

 C. Simple random sampling requires a list of the population.

 D. Web surveys are economical but suffer from nonresponse bias.

69. Judgment sampling is sometimes preferred over random sampling, for example, when:

 A. the desired sample size is much larger than the population.

 B. the sampling budget is large and the population is conveniently located.

 C. time is short and the sampling budget is limited.

 D. the population is readily accessible and sampling is nondestructive.

70. An advantage of convenience samples is that:

 A. the required sample size is easier to calculate.

 B. sampling error can be reduced.

 C. computation of statistics is easier.

 D. they are often quicker and cheaper.

71. Before deciding whether to assess heavy fines against noisy airlines, which sampling method would the Federal Aviation Administration probably use to measure the peak noise from departing jets as measured by a ground-level observer at a point one mile from the end of the departure runway?

 B. Simple random sample.

 C. Judgment sample.

 D. Stratified sample.

72. Professor Hardtack chose a sample of 7 students from his statistics class of 35 students by picking every student who was wearing red that day. Which kind of sample is this?

 A. Simple random sample

 B. Judgment sample

 C. Systematic sample

 D. Convenience sample

73. Thirty work orders are selected from a filing cabinet containing 500 work order folders by choosing every 15th folder. Which sampling method is this?

 A. Simple random sample

 B. Systematic sample

 C. Stratified sample

 D. Cluster sample

74. Which of the following is not a likely reason for sampling?

 A. The destructive nature of certain tests

 B. The physical impossibility of checking all the items in the population

 C. Prohibitive cost of studying the entire population

 D. The expense of obtaining random numbers

75. Comparing a census of a large population to a sample drawn from it, we expect that the:

 A. sample is usually a more practical method of obtaining the desired information.

 B. accuracy of the observations in the census is surely higher than in the sample.

 C. sample must be a large fraction of the population to be accurate.

76. A stratified sample is sometimes recommended when:

 A. the sample size is very large.

 B. the population is small compared to the sample.

 C. distinguishable strata can be identified in the populations.

 D. the population is spread out geographically.

77. A random sample is one in which the:

 A. probability that an item is selected for the sample is the same for all population items.

 B. population items are selected haphazardly by experienced workers.

 C. items to be selected from the population are specified based on expert judgment.

 D. probability of selecting a population item depends on the items data value.

78. An advantage of convenience samples over random samples is that:

 A. they are easy to analyze.

 B. it is easier to determine the sample size needed.

 C. it is easier to calculate the sampling errors involved.

 D. data collection cost is reduced.

79. To measure satisfaction with its cell phone service, AT&T takes a stratified sample of its customers by age, gender, and location. Which is an advantage of this type of sampling, as opposed to other sampling methods?

 A. It is less intrusive on customers privacy.

 B. It does not require random numbers.

 C. It gives faster results.

 D. It can give more accurate results.

80. An accounting professor wishing to know how many MBA students would take a summer elective in international accounting did a survey of the class she was teaching. Which kind of sample is this?

 A. Simple random sample

 B. Cluster sample

 C. Systematic sample

 D. Convenience sample

81. A binary variable (also called a dichotomous variable or dummy variable) has:

 A. only two possible values.

 B. continuous scale values.

 C. rounded data values.

 D. ordinal or interval values.

82. A population has groups that have a small amount of variation within them, but large variation among or between the groups themselves. The proper sampling technique is:

 A. simple random.

 B. stratified.

 C. cluster.

 D. judgment.

83. A manager chose two people from his team of eight to give an oral presentation because she felt they were representative of the whole teams views. What sampling technique did she use in choosing these two people?

 A. Convenience

 B. Simple random

 C. Judgment

 D. Cluster

84. Sampling bias can best be reduced by:

 A. using appropriate data coding.

 B. having a computer tabulate the results.

 C. utilizing random sampling.

 D. taking a judgment sample.

85. A sampling technique used when groups are defined by their geographical location is:

 A. cluster sampling.

 B. convenience sampling.

 C. judgment sampling.

 D. random sampling.

86. If we choose 500 random numbers using Excels function =RANDBETWEEN(1,99), we would most likely find that:

 A. numbers near the mean (50) would tend to occur more frequently.

 B. numbers near 1 and 99 would tend to occur less frequently.

 C. some numbers would occur more than once.

 D. the numbers would have a clear pattern.

87. A problem with nonrandom sampling is that:

 A. larger samples need to be taken to reduce the sampling error inherent in this approach.

 B. not every item in the population has the same chance of being selected, as it should.

 C. it is usually more expensive than random sampling.

 D. it generally provides lower response rates than random sampling.

88. From its 32 regions, the FAA selects 6 regions, and then randomly audits 25 departing commercial flights in each region for compliance with legal fuel and weight requirements. This is an example of:

 A. simple random sampling.

 B. stratified random sampling.

 C. cluster sampling.

 D. judgment sampling.

89. Which of the following is a correct statement?

 A. Choosing the third person listed on every fifth page of the phone book is stratified sampling.

 B. An advantage of a systematic sample is that no list of enumerated data items is required.

 C. Convenience sampling is used to study shoppers in convenience stores.

 D. Judgment sampling is an example of true random sampling.

90. Which of the following is false?

 A. Sampling error is the difference between the true parameter and the sample estimate.

 B. Sampling error is a result of unavoidable random variation in a sample.

 C. A sampling frame is chosen from the target population in a statistical study.

 D. The target population must first be defined by a full list or data file of all individuals.

91. When we are choosing a random sample and we do not place chosen units back into the population, we are:

 A. sampling with replacement.

 B. sampling without replacement.

 C. using a systematic sample.

 D. using a voluntary sample.

92. Which method is likely to be used by a journalism student who is casually surveying opinions of students about the universitys cafeteria food for an article that she is writing?

 A. Simple random sample

 B. Systematic random sample

 C. Cluster sample

 D. Convenience sample

93. Which of the following is false?

 A. Mail surveys are cheap but have low response rates.

 B. Coverage error is when respondents give untruthful answers.

 C. Focus groups are nonrandom but can probe issues more deeply.

 D. Surveys posted on popular websites suffer from selection bias.

94. Which is a time series variable?

 A. VISA balances of 30 students on December 31 of this year

 B. Net earnings reported by Xena Corp. for the last 10 quarters

 C. Dollar exchange rates yesterday against 10 other world currencies

 D. Titles of the top 10 movies in total revenue last week

95. An observation in a data set would refer to:

 A. only a variable whose value is recorded by visual inspection.

 B. a data item whose value is numerical (as opposed to categorical).

 C. a single row that contains one or more observed variables.

 D. the values of all the variables in the entire data set.

96. A multivariate data set contains:

 A. more than two observations.

 B. more than two categorical variables.

 C. more than two variables.

 D. more than two levels of measurement.

97. The Centers for Disease Control and Prevention (CDC) wants to estimate the average extra hospital stay that occurs when heart surgery patients experience postoperative atrial fibrillation. They divide the United States into nine regions. In each region, hospitals are selected at random within each hospital size group (small, medium, large). In each hospital, heart surgery patients are sampled according to known percentages by age group (under 50, 50 to 64, 65 and over) and gender (male, female). This procedure combines which sampling methods?

 A. Systematic, simple random, and convenience

 B. Convenience, systematic, and judgment

 C. Cluster, stratified, and simple random

 D. Judgment, systematic, and simple random

98. Which statement is correct?

 A. Selecting every fifth shopper arriving at a store will approximate a random sample of shoppers.

 B. Selecting only shoppers who drive SUVs is a stratified sampling method.

 C. A census is preferable to a sample for most business problems.

 D. Stratified samples are usually cheaper than other methods.

99. Which is a categorical variable?

 A. The brand of jeans you usually wear

 B. The price you paid for your last pair of jeans

 C. The distance to the store where you purchased your last pair of jeans

 D. The number of pairs of jeans that you own

100. Which is a discrete variable?

 A. The time it takes to put on a pair of jeans

 B. The price you paid for your last pair of jeans

 C. The distance to the store where you purchased your last pair of jeans

 D. The number of pairs of jeans that you own

101. A section of the population we have targeted for analysis is:

 A. a statistic.

 B. a frame.

 C. a sample.

 D. a coven.

102. Which is not a time series variable?

 A. Closing checkbook balances of 30 students on December 31 of this year

 B. Net earnings reported by Xena Corp. for the last 10 quarters

 C. Dollar/euro exchange rates at 12 noon GMT for the last 30 days

 D. Movie attendance at a certain theater for each Saturday last year

103. A good Likert scale may not have:

 A. unequal distances between scale points.

 B. an odd number of scale points.

 C. a verbal label on each scale point.

 D. verbal anchors at its end points.

104. A Likert scale with an odd number of scale points between Strongly Agree and Strongly Disagree:

 A. cannot have equal scale distances.

 B. cannot have a neutral middle point.

 C. must have a verbal label on each scale point.

 D. is often used in marketing surveys.

105. A Likert scale with an even number of scale points between Strongly Agree and Strongly Disagree:

 A. cannot have equal scale distances.

 B. is intended to prevent neutral choices.

 C. must have a verbal label on each scale point.

 D. is rarely used in surveys.

106. Which statement is correct?

 B. Web searches (e.g., Google) often yield unverifiable data.

 C. Government data sources (e.g., www.bls.gov) are often costly.

 D. Private statistical databases (e.g., CRSP) are usually free.

107. Which statement is correct?

 B. Web searches (e.g., Google) yield reliable and easily verified data.

 C. Government data sources (e.g., www.bls.gov) usually are free.

 D. Private statistical databases (e.g., CRSP) usually are free.

 108 Which survey method would you recommend to survey opinions of airline passengers about the cleanliness of the restrooms in the Detroit airport? Why not the others?

 109 What kind of sampling method would you suggest in order to tabulate the number of formulas on a typical page of the Doane-Seward textbook? Defend your choice.

 110 How would you design a study to see whether drivers using hands-free cell phones are distracted enough to slow their reactions to emergency situations? How would you collect data?

Chapter 06

Discrete Probability Distributions

True / False Questions

 1 A random variable is a function or rule that assigns a numerical value to each outcome in the sample space of a stochastic (chance) experiment. True    False

 2 A discrete random variable has a countable number of distinct values. True    False

 3 The expected value of a discrete random variable E(X) is the sum of all X values weighted by their respective probabilities. True    False

 4 A discrete distribution can be described by its probability density function (PDF) or by its cumulative distribution function (CDF). True    False

 5 A random variable may be discrete or continuous, but not both. True    False

 6 To describe the number of blemishes per sheet of white bond paper, we would use a discrete uniform distribution. True    False

 7 The outcomes for the sum of two dice can be described as a discrete uniform distribution. True    False

 8 A discrete binomial distribution is skewed right when > .50. True    False

 9 When = .70 the discrete binomial distribution is negatively skewed. True    False

 10 The Poisson distribution describes the number of occurrences within a randomly chosen unit of time or space. True    False

 11 The Poisson distribution can be skewed either left or right, depending on . True    False

 12 Although the shape of the Poisson distribution is positively skewed, it becomes more nearly symmetric as its mean becomes larger. True    False

 13 As a rule of thumb, the Poisson distribution can be used to approximate a binomial distribution when n 20 and .05. True    False

 14 The hypergeometric distribution is skewed right. True    False

 15 The hypergeometric distribution assumes that the probability of a success remains the same from one trial to the next. True    False

 16 The hypergeometric distribution is not applicable if sampling is done with replacement. True    False

 17 As a rule of thumb, the binomial distribution can be used to approximate the hypergeometric distribution whenever the population is at least 20 times as large as the sample. True    False

 18 An example of a geometric random variable is the number of pine trees with pine beetle infestation in a random sample of 15 pine trees in Colorado. True    False

 19 Calculating the probability of getting three aces in a hand of five cards dealt from a deck of 52 cards would require the use of a hypergeometric distribution. True    False

 20 The Poisson distribution is appropriate to describe the number of babies born in a small hospital on a given day. True    False

 21 The gender (M, F) of a randomly chosen unborn child is a Bernoulli event. True    False

 22 The Poisson distribution has only one parameter. True    False

 23 The standard deviation of a Poisson random variable is the square root of its mean. True    False

 24 Customer arrivals per unit of time would tend to follow a binomial distribution. True    False

 25 The two outcomes (success, failure) in the Bernoulli model are equally likely. True    False

 26 The expected value of a random variable is its mean. True    False

Multiple Choice Questions

27. A discrete probability distribution:

 A. is a listing of all possible values of the random variable.

 B. assigns a probability to each possible value of the random variable.

 C. can assume values between -1 and +1.

 D. is independent of the parameters of the distribution.

28. The number of male babies in a sample of 10 randomly chosen babies is a:

 A. continuous random variable.

 B. Poisson random variable.

 C. binary random variable.

 D. binomial random variable.

29. A discrete random variable:

 A. can be treated as continuous when it has a large range of values.

 B. cannot be treated as continuous.

 C. is best avoided if at all possible.

 D. is usually uniformly distributed.

30. Which is not a discrete random variable?

 A. The number of defects in a 4 8 sheet of plywood

 B. The number of female passengers who board a plane

 C. The time until failure of a vehicle headlamp

 D. The number of correct answers on a statistics exam

31. Which is not a discrete random variable?

 A. The number of births in a hospital on a given day

 B. The number of fives obtained in four rolls of a die

 C. The hourly earnings of a call center employee in Boston

 D. The number of applicants applying for a civil service job

32. Which statement is incorrect?

 A. The Poisson distribution is always skewed right.

 B. The binomial distribution may be skewed left or right.

 C. The discrete uniform distribution is always symmetric.

 D. The hypergeometric distribution is symmetric.

33. The random variable X is the number of shots it takes before you make the first free throw in basketball. Assuming the probability of success (making a free throw) is constant from trial to trial, what type of distribution does X follow?

 A. Binomial

 B. Poisson

 C. Hypergeometric

 D. Geometric

34. Which probability model is most nearly appropriate to desc

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