Question 1

TABLE 16-1
Given below are the average prices for three types of energy products for five consecutive years.
 
-Referring to Table 16-1,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 5 using year 1 as the base year?

Accepted Answer

The answer of TABLE 16-1
Given below are the average prices...

Question 2

TABLE 9-1
A manufacturer produces light bulbs that have a mean life of at least 500 hours when the production process is working properly.Based on past experience,the population standard deviation is 50 hours and the light bulb life is normally distributed.The operations manager stops the production process if there is evidence that the population mean light bulb life is below 500 hours.
-Referring to Table 9-1,if you select a sample of 100 light bulbs and are willing to have a level of significance of 0.05,the probability of the operations manager stopping the process when the process is not working properly is ________ if the population mean bulb life is 490 hours.

Accepted Answer

The answer of TABLE 9-1
A manufacturer produces light bulbs that...

Question 3

One of the reasons that a correction for continuity adjustment is needed when approximating the binomial distribution with a normal distribution is because a random variable having a binomial distribution can have only a specified value while a random variable having a normal distribution can take on any values within an interval around that specified value.

Accepted Answer

A) True 
 B)False

Question 4

TABLE 9-1
A manufacturer produces light bulbs that have a mean life of at least 500 hours when the production process is working properly.Based on past experience,the population standard deviation is 50 hours and the light bulb life is normally distributed.The operations manager stops the production process if there is evidence that the population mean light bulb life is below 500 hours.
-Referring to Table 9-1,if you select a sample of 100 light bulbs and are willing to have a level of significance of 0.10,the probability of a Type II error is ________ if the population mean bulb life is 490 hours.

Accepted Answer

The answer of TABLE 9-1
A manufacturer produces light bulbs that...

Question 5

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature. 
-Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.Given 0.2,0.4,and 0.4 are the probabilities for the sale of 100,200,or 400 dozen roses,respectively,then the optimal alternative using EMV for selling roses is to buy ________ dozen roses.

Accepted Answer

A) 100 
B) 200 
C) 400 
D) 600

Question 6

TABLE 19-5
The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. 
-Referring to Table 19-5,what is the opportunity loss for Action B with Event 1?

Accepted Answer

The answer of TABLE 19-5
The following payoff table shows profits...

Question 7

To determine the probability of getting at least 3 events of interest in a binomial distribution,you will find the area under the normal curve for X = 2.5 and above.

Accepted Answer

A) True 
 B)False

Question 8

The Paasche price index has the disadvantage that current consumption quantities are usually hard to obtain.

Accepted Answer

A) True 
 B)False

Question 9

TABLE 16-2
Given below are the prices of a basket of four food items from 2006 to 2010.
 
-Referring to Table 16-2,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2008 using 2010 as the base year?

Accepted Answer

The answer of TABLE 16-2
Given below are the prices of...

Question 10

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.
 
-Referring to Table 19-6,what is the opportunity loss of spending 16 hours per week on average studying for the exam when the exam turns out to be easy?

Accepted Answer

The answer of TABLE 19-6
A student wanted to find out...

Question 11

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.
 
-Referring to Table 19-6,the optimal strategy using the maximax criterion is to study 8 hours per week on average for the exam.

Accepted Answer

A) True 
 B)False

Question 12

Based on past experience,only 0.5% of the invoices of a company contain an error.Out of the 1,500 invoices that the company will issue,what is the approximate probability that more than 4 invoices will contain an error?

Accepted Answer

The answer of Based on past experience,only 0.5% of the...

Question 13

TABLE 19-5
The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. 
-Referring to Table 19-5,what is the expected profit under certainty (EPUC)for this problem?

Accepted Answer

The answer of TABLE 19-5
The following payoff table shows profits...

Question 14

TABLE 8-1
A random sample of 100 stores from a large chain of 500 garden supply stores was selected to determine the mean number of lawnmowers sold at an end-of-season clearance sale.The sample results indicated a mean of 6 and a standard deviation of 2 lawnmowers sold.A 95% confidence interval (5.623 to 6.377)was established based on these results.
-Referring to Table 8-1,the confidence interval estimate of the mean with finite population correction will be wider in range than confidence interval estimate without finite population correction.

Accepted Answer

A) True 
 B)False

Question 15

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature. 
-Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.The payoff for buying 200 dozen roses and selling 100 dozen roses at the full price is

Accepted Answer

A) $2,000. 
B) $1,000. 
C) $500. 
D) -$500.

Question 16

TABLE 8-1
A random sample of 100 stores from a large chain of 500 garden supply stores was selected to determine the mean number of lawnmowers sold at an end-of-season clearance sale.The sample results indicated a mean of 6 and a standard deviation of 2 lawnmowers sold.A 95% confidence interval (5.623 to 6.377)was established based on these results.
-Referring to Table 8-1,of all possible samples of 100 stores taken from the population of 1,000 stores,95% of the confidence intervals developed will contain the true population mean within the interval.

Accepted Answer

A) True 
 B)False

Question 17

The Paasche price index reflects more accurately the consumption cost at a point in time because it uses the consumption quantities in the initial year as the base.

Accepted Answer

A) True 
 B)False

Question 18

TABLE 19-2
The following payoff matrix is given in dollars.
 
-Referring to Table 19-2,what is the optimal action using the EOL criterion?

Accepted Answer

A) Action A 
B) Action B 
C) Either Action A or Action B 
D) It cannot be determined.

Question 19

TABLE 8-1
A random sample of 100 stores from a large chain of 500 garden supply stores was selected to determine the mean number of lawnmowers sold at an end-of-season clearance sale.The sample results indicated a mean of 6 and a standard deviation of 2 lawnmowers sold.A 95% confidence interval (5.623 to 6.377)was established based on these results.
-Referring to Table 8-1,if the population had consisted of 400 stores,the confidence interval estimate of the mean with finite population correction would have been wider in range.

Accepted Answer

A) True 
 B)False

Question 20

TABLE 19-2
The following payoff matrix is given in dollars.
 
-Referring to Table 19-2,the return to risk ratio for Action B is

Accepted Answer

A) 0.167 
B) 3.0 
C) 6.0 
D) 9.0

Exam 19: Questions that Involve Online Topics

TABLE 16-1 Given below are the average prices for three types of energy products for five consecutive years. -Referring to Table 16-1,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 5 using year 1 as the base year?

TABLE 19-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. -Referring to Table 19-5,what is the opportunity loss for Action B with Event 1?

To determine the probability of getting at least 3 events of interest in a binomial distribution,you will find the area under the normal curve for X = 2.5 and above.

The Paasche price index has the disadvantage that current consumption quantities are usually hard to obtain.

TABLE 16-2 Given below are the prices of a basket of four food items from 2006 to 2010. -Referring to Table 16-2,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2008 using 2010 as the base year?

Based on past experience,only 0.5% of the invoices of a company contain an error.Out of the 1,500 invoices that the company will issue,what is the approximate probability that more than 4 invoices will contain an error?

TABLE 19-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. -Referring to Table 19-5,what is the expected profit under certainty (EPUC)for this problem?

The Paasche price index reflects more accurately the consumption cost at a point in time because it uses the consumption quantities in the initial year as the base.

TABLE 19-2 The following payoff matrix is given in dollars. -Referring to Table 19-2,what is the optimal action using the EOL criterion?

TABLE 19-2 The following payoff matrix is given in dollars. -Referring to Table 19-2,the return to risk ratio for Action B is