Deck 21: Critical Thinking About Research

Question 1

Selection bias can distort the results of research studies.

Answer 1

True

Question 2

Which of the following examples would most likely be subject to survivor bias?

A) a study that randomly sampled an equal number of 40-year old men and 60-year old men to measure incidences of Type 1 diabetes
B) a study that randomly sampled flood victims whose homes were destroyed to see if they were likely to rebuild their homes on the same property
C) a study that randomly sampled first-year law-school students to see how many survived to make it to their second year in law school
D) a study that randomly sampled men and women who suffered food poisoning from dining at a specific fast-food restaurant chain to determine the incidence of continued patronage of that particular chain of restaurants

Answer 2

A

Question 3

People who drive fuel-efficient vehicles tend to recycle more often than people who drive gas guzzlers. This is an example of

A) correlation.
B) causation.
C) difference-in-differences.
D) statistical significance.

Answer 3

A

Question 4

Two variables are said to be positively correlated if their values

A) are always positive.
B) only increase but never decrease.
C) tend to move in the same direction.
D) tend to move in opposite directions.

Question 5

Suppose that a study is released stating that the fewer books people read, the more velvet paintings they tend to own. This is best described as an example of

A) positive correlation.
B) negative correlation.
C) positive causation.
D) negative causation.

Question 6

People who are fans of NASCAR tend to eat less organic produce than people who are not NASCAR fans. This is an example of

A) correlation.
B) causation.
C) difference-in-differences.
D) statistical significance.

Question 7

Selection bias can result from data samples

A) that are not random.
B) that compare groups engaged in different activities.
C) from people who make different choices.
D) all of the above

Question 8

Survivor bias occurs when data used in a study reflects too broad a sample of the population.

Question 9

When conducting a study on success rates, which of the following would most likely be subject to survivor bias?

A) Of the 4 Starbucks locations that opened exactly 5 years ago in the same city, the location next to the concert arena has been the most financially successful.
B) Of the 75 oil exploration firms based in North Dakota, over half of those that recently filed for bankruptcy have been in business for 5 years or less.
C) Of the 25 high schools located in Concordia County, this year's SAT scores were highest from students who attend Springdale High, the newest high school in the county.
D) Of the 115 oceanfront hotels in Honolulu, only those with private beaches are able to charge more than $200 per night on average.

Question 10

Selection bias is unique to the field of economic research.

Question 11

Refer to the information provided in Scenario 21.2 below to answer the questions that follow.
SCENARIO 21.2: A survey of 1,000 people in Austin, Texas (population 900,000) found that those who have chosen to eat organic produce for at least the past 5 years have experienced fewer serious medical issues than those who have not elected to eat organic produce. Therefore, the conclusion was made that eating organic produce helps prevent people from experiencing serious medical problems.
Refer to Scenario 21.1. Which of the following statements pertaining to the scenario is the most accurate with respect to selection bias?

A) The survey exhibits selection bias in that only 1,000 people were surveyed in a city with a population of 900,000).
B) The survey exhibits selection bias in that the 5-year time frame used to gauge serious medical issues is not long enough.
C) The conclusion exhibits selection bias in that there may be other factors, such as those who eat organic produce also exercise on a more regular basis, that could account for fewer serious medical problems.
D) All of the above are correct.

Question 12

Suppose that a study is released stating that the fewer speeding tickets a person is issued, the less gasoline they tend to purchase. This is best described as an example of

A) positive correlation.
B) negative correlation.
C) positive causation.
D) negative causation.

Question 13

Two variables are said to be negatively correlated if their values

A) are always negative.
B) only decrease but never increase.
C) tend to move in the same direction.
D) tend to move in opposite directions.

Question 14

Refer to the information provided in Scenario 21.1 below to answer the questions that follow.
SCENARIO 21.1: A study of 2,500 country club members in Phoenix found that those who play golf at least 2 times per week were 40 percent more likely to have suffered from skin cancer than those who never play golf. Therefore, the study concluded that in Phoenix, playing golf at least twice a week leads to a higher incidence of skin cancer in country club members.
Refer to Scenario 21.1. Which of the following statements pertaining to the scenario is the most accurate with respect to selection bias?

A) The conclusion exhibits selection bias in that only country club members in Phoenix were surveyed.
B) The conclusion exhibits selection bias in that there may be other factors besides playing golf more than 2 times per week that lead to a higher incidence of skin cancer in those members.
C) The study exhibits selection bias in that it is only concerned with skin cancer incidence in country club members.
D) The scenario does not exhibit selection bias.

Question 15

Which of the following examples would most likely be subject to selection bias?

A) a study that randomly sampled 100 passengers at Chicago O'Hare International Airport to get their opinions about decreased legroom on commercial airplanes
B) a study that randomly sampled 100 hunters in Minnesota to determine if newly implemented state hunting limits would reduce the number of hunting trips they took in the state each year
C) a study that randomly sampled 100 tourists of legal drinking age on the Las Vegas Strip to determine the average amount they spend each day on alcoholic beverages while in Las Vegas
D) a study that randomly sampled 100 people issued speeding tickets on the New Jersey Turnpike to determine if drivers believe the New Jersey Department of Transportation should raise the current 65 mph speed limit to 75 mph

Question 16

Which of the following examples would most likely be subject to selection bias?

A) 1,000 registered voters in Nashville are called and asked who they are planning to vote for in the upcoming Nashville mayoral election.
B) 500 University of Wisconsin students are polled on their opinion about a possible tuition hike at their school.
C) 750 National Rifle Association members are questioned to obtain the public's opinion about pending federal legislation regarding stricter gun control laws.
D) 60 members of a 100-member neighborhood homeowners' association vote to approve funding for private security patrols in their neighborhood.

Question 17

Survivor bias

A) is a type of selection bias.
B) can only occur in studies involving people of significant age difference.
C) is relatively insignificant with respect to economic research.
D) all of the above

Question 18

When collecting data to conduct research, if the sample used is not random, ________ occurs.

A) selection bias
B) survivor bias
C) regression discontinuity
D) difference-in-differences

Question 19

When collecting data to conduct research, if the sample used includes only observations which have remained in the sample over time, making that sample unrepresentative of the broader population, ________ occurs.

A) intention to treat
B) survivor bias
C) regression discontinuity
D) difference-in-differences

Question 20

In a research project, when the sample used is not random, selection bias occurs.

Question 21

A research project is conducted by offering a randomly selected 300 of the 500 local Toyota Prius owners a chance to use a new fuel additive for 6 months to see if their gas mileage improves. 225 of the 300 randomly selected Prius owners agree to the offer, 50 of those drop out of the project after 1 month, another 50 drop out after 2 months, and 25 more drop out after 3 months. The rest remain for the duration of the project. Using the intention to treat method, the results from how many of the Prius owners who were not selected to be a part of the project should be included in the research project?

A) 100
B) 200
C) 325
D) 400

Question 22

Bethany notices that whenever she receives a text message, her roommate Stella is playing her tuba. She concludes that Stella's tuba playing is causing her to receive text messages. Bethany is

A) definitely confusing correlation with causation.
B) very probably correct in her conclusion that the tuba playing causes her to receive text messages.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the text messages are causing Stella to play the tuba.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 23

Clarissa notices that her satellite TV signal becomes scrambled whenever there is a major thunderstorm in her area. She concludes that the scrambled satellite signal must be causing the severe thunderstorms. Clarissa is

A) definitely confusing correlation with causation.
B) very probably correct in her conclusion that the scrambled satellite is the cause of the thunderstorms.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the severe thunderstorms are the cause of the scrambled satellite signal.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 24

Tatiana observes that all of her friends who have more than five tattoos also have more than five body piercings, and concludes that getting multiple tattoos makes people also get multiple piercings. Tatiana is

A) correct in her analysis.
B) confusing correlation and causation.
C) describing difference-in-differences.
D) describing regression discontinuity.

Question 25

Zachary notices that every time he washes his car, it rains the next day. He concludes that washing his car causes the next day's rain. Zachary is

A) definitely confusing correlation with causation.
B) very probably correct in his conclusion that washing his car causes the next day's rain to fall.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the upcoming rain was responsible for Zachary's decision to wash his car.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 26

Identifying the causal effects of a policy by looking at two samples that lie on either side of a threshold is called

A) difference-in-differences.
B) statistical significance.
C) regression discontinuity.
D) intention to treat.

Question 27

Rolando realizes that whenever he studies for at least two hours immediately before a physics exam, he gets an A on the exam, but when he does not study immediately before an exam, he gets no higher than a C on the exam. He concludes that the time spent studying immediately before the exams is responsible for his improved grades. Rolando is

A) definitely confusing correlation with causation.
B) very probably correct in his conclusion that the time spent studying immediately before his exams is a reason for his improved grades.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the improved exam grades forced him to study immediately before each test.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 28

Refer to the information provided in Scenario 21.3 below to answer the questions that follow.
SCENARIO 21.3: Consider a local high school that has 300 sophomores considered to be at-risk students. A privately-sponsored after-school sports program has been established to try to help at-risk students succeed in finishing high school. The local government wants to know if this program reduces the students' probability of dropping out of high school before the end of their junior year, and decides to randomly sample 150 of the 300 at-risk sophomores and invite them to attend the after-school program at no cost. 100 students accept the invitation, and by the end of their junior year, the drop-out percentage of the 100 students who attended the program was lower than the drop-out percentage of the 200 students who did not attend the program.
Refer to Scenario 21.3. Based on the information in the scenario, can you conclude that the after-school program had a positive effect?

A) Yes, because the drop-out percentage for those students who attended the program was lower than the drop-out percentage for those students who did not attend the program.
B) No, because less than half of the at-risk students attended the program.
C) Yes, because the 150 students offered the program were a random sample.
D) No, because we cannot assume the 100 students who accepted the offer were a random sample.

Question 29

Refer to the information provided in Scenario 21.3 below to answer the questions that follow.
SCENARIO 21.3: Consider a local high school that has 300 sophomores considered to be at-risk students. A privately-sponsored after-school sports program has been established to try to help at-risk students succeed in finishing high school. The local government wants to know if this program reduces the students' probability of dropping out of high school before the end of their junior year, and decides to randomly sample 150 of the 300 at-risk sophomores and invite them to attend the after-school program at no cost. 100 students accept the invitation, and by the end of their junior year, the drop-out percentage of the 100 students who attended the program was lower than the drop-out percentage of the 200 students who did not attend the program.
Refer to Scenario 21.3. The efficacy of this program can be best measured by comparing

A) the drop-out percentage of the 100 students who attended the program to the drop-out percentage of the 200 students who did not attend the program.
B) the drop-out percentage of the 100 students who attended the program to the drop-out percentage of the 50 students who were offered the program but chose not to attend.
C) the drop-out percentage of the 150 students who were offered the program to the drop-out percentage of the 150 students who were not offered the program.
D) the drop-out percentage of the 50 students were offered the program but chose not to attend to the drop-out percentage of the 150 students who were not offered the program.

Question 30

Refer to the information provided in Scenario 21.3 below to answer the questions that follow.
SCENARIO 21.3: Consider a local high school that has 300 sophomores considered to be at-risk students. A privately-sponsored after-school sports program has been established to try to help at-risk students succeed in finishing high school. The local government wants to know if this program reduces the students' probability of dropping out of high school before the end of their junior year, and decides to randomly sample 150 of the 300 at-risk sophomores and invite them to attend the after-school program at no cost. 100 students accept the invitation, and by the end of their junior year, the drop-out percentage of the 100 students who attended the program was lower than the drop-out percentage of the 200 students who did not attend the program.
Refer to Scenario 21.3. Based on the information in the scenario, the 100 students who accepted the offer to attend the after-school program is an example of

A) selection bias.
B) a random sample.
C) survivor bias.
D) positive correlation.

Question 31

A research project is conducted by offering a randomly selected 75 of the 200 local dog owners a chance to have their dogs wear a new flea collar for three months to see if the collar reduces the incidence of fleas. 50 of the 75 randomly selected dog owners agree to the offer, and 25 of those drop out of the study before the end of the three months. Using the intention to treat method, the results from how many of the randomly selected dogs should be included in the research project?

A) 0
B) 25
C) 50
D) 75

Question 32

A procedure in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol is called

A) intention to treat.
B) regression discontinuity.
C) difference-in-differences.
D) causality.

Question 33

A research project is conducted by offering a randomly selected 300 of the 500 local Toyota Prius owners a chance to use a new fuel additive for 6 months to see if their gas mileage improves. 225 of the 300 randomly selected Prius owners agree to the offer, 50 of those drop out of the project after 1 month, another 50 drop out after 2 months, and 25 more drop out after 3 months. The rest remain for the duration of the project. Using the intention to treat method, the results from how many of the Prius owners who were randomly selected should be included in the research project?

A) 100
B) 200
C) 225
D) 300

Question 34

Ravi notices that all of his neighbors who own cats are also divorced, and concludes that cat ownership must result in divorce. Ravi is

A) correct in his analysis.
B) confusing correlation and causation.
C) describing difference-in-differences.
D) describing regression discontinuity.

Question 35

Suppose that a study is released stating that the more time a person spends fishing, the smaller the chance that the person is a vegetarian. This is best described as an example of

A) positive correlation.
B) negative correlation.
C) positive causation.
D) negative causation.

Question 36

Suppose that a study is released stating that as people increase the number of times they brush their teeth each day, they increase the number of times they go to the gym each week. This is best described as an example of

A) positive correlation.
B) negative correlation.
C) positive causation.
D) negative causation.

Question 37

Daniel notices that every year with a mild winter, his roses begin to bloom in February, but every year with a severe winter, his roses do not begin to bloom until April. He concludes that the severity of the winter is responsible for the month in which his roses begin to bloom. Daniel is

A) definitely confusing correlation with causation.
B) very probably correct in his conclusion that the severity of the winter is a cause of when his roses begin to bloom.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that the initial blooming of his roses is the cause of the severity of the previous winter.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 38

Debbie realizes that her twin brother Dudley breaks out in hives every time he eats oysters, and concludes that when Dudley feels a case of hives coming on, he must get a craving for oysters. Debbie is

A) definitely confusing correlation with causation.
B) very probably correct in her conclusion that Dudley craves oysters whenever he is about to break out in hives.
C) likely correct that there is causation, but the causation is more likely running in the opposite direction in that eating oysters is the probable cause of Dudley's hives.
D) probably misguided in that there is no apparent correlation or causation in this situation.

Question 39

Refer to the information provided in Scenario 21.3 below to answer the questions that follow.
SCENARIO 21.3: Consider a local high school that has 300 sophomores considered to be at-risk students. A privately-sponsored after-school sports program has been established to try to help at-risk students succeed in finishing high school. The local government wants to know if this program reduces the students' probability of dropping out of high school before the end of their junior year, and decides to randomly sample 150 of the 300 at-risk sophomores and invite them to attend the after-school program at no cost. 100 students accept the invitation, and by the end of their junior year, the drop-out percentage of the 100 students who attended the program was lower than the drop-out percentage of the 200 students who did not attend the program.
Refer to Scenario 21.3. To use the intention-to-treat procedure to measure the effect of the after-school program, you would need to compare

A) the drop-out percentage of the 100 students who attended the program to the drop-out percentage of the 200 students who did not attend the program.
B) the drop-out percentage of the 100 students who attended the program to the drop-out percentage of the 50 students who were offered the program but chose not to attend.
C) the drop-out percentage of the 150 students who were offered the program to the drop-out percentage of the 150 students who were not offered the program.
D) the drop-out percentage of the 50 students were offered the program but chose not to attend to the drop-out percentage of the 150 students who were not offered the program.

Question 40

A research project is conducted by offering a randomly selected 75 of the 200 local dog owners a chance to have their dogs wear a new flea collar for three months to see if the collar reduces the incidence of fleas. 50 of the 75 randomly selected dog owners agree to the offer, and 25 of those drop out of the study before the end of the three months. Using the intention to treat method, the results from how many of the dogs that were not selected to be a part of the project should be included in the research project?

A) 0
B) 125
C) 150
D) 200

Question 41

Regression discontinuity is a method in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol.

Question 42

If people who own cats tend to have fewer mice on their property, we can say there is a negative correlation between owning cats and having mice on your property.

Question 43

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

Refer to Scenario 21.5. The total cost of telephone service for residents of Achoo in 2016 is ________ Bugabucks.

A) 4,500
B) 22,500
C) 90,000
D) 112,500

Question 44

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

Refer to Scenario 21.5. The total cost of telephone service for residents of Zoink in 2016 is ________ Bugabucks.

A) 4,800
B) 24,000
C) 96,000
D) 120,000

Question 45

A method for identifying causality by looking at the way in which the average change over time in the outcome variable is compared to the average change in a control group is called difference-in-differences.

Question 46

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

Related to the Economics in Practice on p. 407: Refer to Scenario 21.5. Using the difference-in-differences method, what is the estimated effect of the increase in the usage tax on the average number of minutes used monthly per resident in Zoink?

A) -225
B) -425
C) -650
D) -1,075

Question 47

Refer to the information provided in Scenario 21.4 below to answer the questions that follow.
SCENARIO 21.4: In a randomized 1-year trial of 400 Mr. Lincoln hybrid tea rose bushes with rose rosette disease, 200 are slated to receive only a sulphur treatment (we will call this Group A), and the other 200 are slated to receive the sulphur treatment and an additional neem oil treatment 4 months later (we will call this Group B). Assume that the neem oil treatment is ineffective in treating rose rosette disease, so on average, the same proportion of rose bushes in each group will die of the disease. In Group B, 25 of the 200 rose bushes die in the 4-month period leading up to the neem oil treatment. Of the 175 bushes left, 25 die in the 8 months following the neem oil treatment. Since we know the neem oil treatment is ineffective, the rose bushes in Group A will, on average, suffer the same fate as those in Group B, with 25 bushes dying in the first 4 months and another 25 dying in the following 8 months.
Related to the Economics in Practice on p. 404: Refer to Scenario 21.4. If we limit the analysis in Group B to only those rose bushes which received the neem oil treatment, what is the rate of death due to rose rosette disease?

A) 12.5%
B) 14.3%
C) 25%
D) 37.5%

Question 48

Refer to the information provided in Scenario 21.4 below to answer the questions that follow.
SCENARIO 21.4: In a randomized 1-year trial of 400 Mr. Lincoln hybrid tea rose bushes with rose rosette disease, 200 are slated to receive only a sulphur treatment (we will call this Group A), and the other 200 are slated to receive the sulphur treatment and an additional neem oil treatment 4 months later (we will call this Group B). Assume that the neem oil treatment is ineffective in treating rose rosette disease, so on average, the same proportion of rose bushes in each group will die of the disease. In Group B, 25 of the 200 rose bushes die in the 4-month period leading up to the neem oil treatment. Of the 175 bushes left, 25 die in the 8 months following the neem oil treatment. Since we know the neem oil treatment is ineffective, the rose bushes in Group A will, on average, suffer the same fate as those in Group B, with 25 bushes dying in the first 4 months and another 25 dying in the following 8 months.
Related to the Economics in Practice on p. 404: Refer to Scenario 21.4. Since we know that the neem oil treatment is ineffective in curing rose rosette disease, when we use the intention to treat method, the rate of death due to rose rosette disease becomes ________ than when we do not use the intention to treat method.

A) lower for Group B
B) higher for Group B
C) lower for Group A
D) lower for Group A and higher for Group B

Question 49

A strategy that identifies the causal effects of a policy or factor by looking at two samples that lie on either side of a threshold or cutoff is called intention to treat.

Question 50

Refer to the information provided in Table 21.1 below to answer the questions that follow.
Table 21.1
A study to determine the effect that the weight of an average 6 ft. tall man has on the incidence of Type 2 diabetes was conducted in a small town. The six participants and their corresponding weights are listed in the table.
Related to the Economics in Practice on p. 405: Refer to Table 21.1. When using regression discontinuity, if this study had a threshold of 180 pounds, the outcomes of which individuals would be compared?

A) all six individuals
B) Franklin and Darius
C) Abe and Franklin
D) Boris, Calvin, Darius, and Eddie

Question 51

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

Refer to Scenario 21.5. The total cost of telephone service for residents of Achoo in 2017 is ________ Bugabucks.

A) 5,150
B) 25,750
C) 103,000
D) 128,750

Question 52

Correlation always implies causation.

Question 53

Identifying the causal effects of a policy by looking at the average change over time in the outcome variable is compared to the average change in a control group is called

A) difference-in-differences.
B) statistical significance.
C) regression discontinuity.
D) intention to treat.

Question 54

If people who have children also tend to own dogs, we can say there is a positive correlation between having children and dog ownership.

Question 55

If two variables move in opposite directions, they are said to be negatively correlated.

Question 56

If the values of two variables move together, there is said to be causation, and if one variable results in a change in another variable, they are said to be correlated.

Question 57

Refer to the information provided in Scenario 21.5 below to answer the questions that follow.
SCENARIO 21.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.
Average Monthly Telephone
Use per Resident (minutes)

Refer to Scenario 21.5. The total cost of telephone service for residents of Zoink in 2017 is ________ Bugabucks.

A) 26,125
B) 52,250
C) 156,750
D) 182,875

Question 58

Refer to the information provided in Scenario 21.4 below to answer the questions that follow.
SCENARIO 21.4: In a randomized 1-year trial of 400 Mr. Lincoln hybrid tea rose bushes with rose rosette disease, 200 are slated to receive only a sulphur treatment (we will call this Group A), and the other 200 are slated to receive the sulphur treatment and an additional neem oil treatment 4 months later (we will call this Group B). Assume that the neem oil treatment is ineffective in treating rose rosette disease, so on average, the same proportion of rose bushes in each group will die of the disease. In Group B, 25 of the 200 rose bushes die in the 4-month period leading up to the neem oil treatment. Of the 175 bushes left, 25 die in the 8 months following the neem oil treatment. Since we know the neem oil treatment is ineffective, the rose bushes in Group A will, on average, suffer the same fate as those in Group B, with 25 bushes dying in the first 4 months and another 25 dying in the following 8 months.
Related to the Economics in Practice on p. 404: Refer to Scenario 21.4. If we use the intention to treat method for Group B, what is the rate of death due to rose rosette disease?

A) 5%
B) 12.5%
C) 25%
D) 50%

Question 59

Refer to the information provided in Table 21.1 below to answer the questions that follow.
Table 21.1
A study to determine the effect that the weight of an average 6 ft. tall man has on the incidence of Type 2 diabetes was conducted in a small town. The six participants and their corresponding weights are listed in the table.
Related to the Economics in Practice on p. 405: Refer to Table 21.1. When using regression discontinuity, if this study had a threshold of 200 pounds, the outcomes of which individuals would be compared?

A) all six individuals
B) Abe and Calvin
C) Boris and Darius
D) Abe, Darius, and Franklin

Question 60

Refer to the information provided in Scenario 21.4 below to answer the questions that follow.
SCENARIO 21.4: In a randomized 1-year trial of 400 Mr. Lincoln hybrid tea rose bushes with rose rosette disease, 200 are slated to receive only a sulphur treatment (we will call this Group A), and the other 200 are slated to receive the sulphur treatment and an additional neem oil treatment 4 months later (we will call this Group B). Assume that the neem oil treatment is ineffective in treating rose rosette disease, so on average, the same proportion of rose bushes in each group will die of the disease. In Group B, 25 of the 200 rose bushes die in the 4-month period leading up to the neem oil treatment. Of the 175 bushes left, 25 die in the 8 months following the neem oil treatment. Since we know the neem oil treatment is ineffective, the rose bushes in Group A will, on average, suffer the same fate as those in Group B, with 25 bushes dying in the first 4 months and another 25 dying in the following 8 months.
Related to the Economics in Practice on p. 404: Refer to Scenario 21.4. For Group A, what is the rate of death due to rose rosette disease?

A) 5%
B) 12.5%
C) 25%
D) 50%

Question 61

We reject the null hypothesis of no effect if the p-value is typically

A) ≤ 0.05.
B) ≤ 0.10.
C) ≥ 0.5.
D) ≥ 1.

Question 62

The term "statistical significance" is commonly applied to a p-value of

A) ≤ 0.05.
B) ≤ 0.10.
C) ≥ 0.5.
D) ≥ 1.

Question 63

Sherrie owns a pickup truck and also owns a parrot. Therefore, we can conclude that there is a causal relationship between owning the pickup truck and the parrot for Sherrie.

Question 64

Refer to the information provided in Scenario 21.6 below to answer the questions that follow.
SCENARIO 21.6: Following is information pertaining to four surveys:
Survey 1: 50 pre-law students at Vanderbilt University are surveyed for a study to see if taking an LSAT preparation course was effective in improving their chance of being admitted to law school.
Survey 2: 600 newly hired Houston-area elementary school teachers are surveyed for a study to determine how much salary they were willing to sacrifice to get a job teaching in a school with a high-quality reputation.
Survey 3: 950 people are surveyed 6 months after buying a new car for a study to see how satisfied they are with their purchase.
Survey 4: 75 people are surveyed in front of 5 different casinos on the Las Vegas Strip fo a study to determine the average daily gambling budget of a Las Vegas visitor.
Refer to Scenario 21.6. Of the four surveys, which is likely to be the most statistically significant?

A) Survey 1
B) Survey 2
C) Survey 3
D) Survey 4

Question 65

When computing p-values, population variation matters.

Question 66

Assume a study indicates that attending an SAT preparation class improved average SAT scores by 200 points. If the null hypothesis is true and the p-value for the 200 point SAT score improvement is 0.015, then there is a ________ chance of improving your SAT score by 200 points.

A) 0.3%
B) 1.5%
C) 3%
D) 15%

Question 67

More confidence can be had from the results obtained from experiments using a population with ________ variation than from those with ________ variation.

A) high; low
B) low; high
C) significant; insignificant
D) implied; observed

Question 68

A ________ p-value means the probability is ________ of getting the result you find in the sample data if the null hypothesis is true.

A) small; large
B) negative; certain
C) small; small
D) positive; certain

Question 69

The probability of obtaining your result based on sample data if the null hypothesis is true is called

A) a p-value.
B) correlation.
C) selection bias.
D) a least squares estimate.

Question 70

The most important statistical tool in empirical economics is

A) regression analysis.
B) intention to treat.
C) causation.
D) difference-in-differences.

Question 71

Dierdre just gave birth to twins and now finds herself buying diapers on a weekly basis. Therefore, we can conclude that there is a causal relationship between having newborn twins and purchasing diapers for Dierdre.

Question 72

The assumption of no effect from the results of an experiment is known as the null hypothesis.

Question 73

When computing p-values,

A) the size of the sample matters, but variation in the population does not matter.
B) variation in the population matters, but the size of the sample does not matter.
C) both the size of the sample and variation in the population matter.
D) neither the size of the sample nor variation in the population matter.

Question 74

To get potentially significant results from an experiment using a high-variation population,

A) a large sample size is needed.
B) a short timeframe is needed.
C) a negative p-value is needed.
D) all of the above

Question 75

Refer to the information provided in Scenario 21.6 below to answer the questions that follow.
SCENARIO 21.6: Following is information pertaining to four surveys:
Survey 1: 50 pre-law students at Vanderbilt University are surveyed for a study to see if taking an LSAT preparation course was effective in improving their chance of being admitted to law school.
Survey 2: 600 newly hired Houston-area elementary school teachers are surveyed for a study to determine how much salary they were willing to sacrifice to get a job teaching in a school with a high-quality reputation.
Survey 3: 950 people are surveyed 6 months after buying a new car for a study to see how satisfied they are with their purchase.
Survey 4: 75 people are surveyed in front of 5 different casinos on the Las Vegas Strip fo a study to determine the average daily gambling budget of a Las Vegas visitor.
Refer to Scenario 21.6. Of the four surveys, which is likely to be the least statistically significant?

A) Survey 1
B) Survey 2
C) Survey 3
D) Survey 4

Question 76

A p-value of 0.03 means that there is only a 0.03% chance of obtaining the measured result.

Question 77

Assume a study indicates that attending a class on blackjack strategy improved average winnings by 50 percent. If the null hypothesis is true and the p-value for the 50 percent improvement in winnings is 0.04, then there is a ________ chance of improving your blackjack winnings by 50 percent.

A) 0.2%
B) 0.4%
C) 4%
D) 20%

Question 78

A p-value refers to the probability of obtaining the result that you find in the sample data if the null hypothesis is not true.

Question 79

If a p-value is greater than or equal to 1.0, the results is said to be statistically significant.

Question 80

Assuming the effect of a specific outcome being tested is zero is known as

A) a zero-sum game.
B) a statistical anomaly.
C) the null hypothesis.
D) regression discontinuity.