Department

Economics for Management StudiesCourse Code

MGEB12H3Professor

Vinh QuanLecture

1This

**preview**shows half of the first page. to view the full**2 pages of the document.**Department of Management, UTSC

MGEB12 Quantitative Methods in Economics II – L01/L30

Assignment #2 – Winter 2015

•As we will not have lectures on FEB 10/11 due to midterm, this assignment is

due Tuesday FEB 10 during my office hours 10a – 2pm IC376. Late

Assignments will not be accepted. This assignment is worth 2.5% of your

final mark.

•You can work individually or up to group of 2 people and they can be in

different sections.

Problem 1

I find the stapling feature for the photocopier in our dept to be not very reliable. The

industry standard is that only 2% of items should be stapled incorrectly. In a sample of

120 handouts made for a course, 6 were badly stapled.

(a) At a 0.025 significance level using the critical value approach, test to see if the %

error is higher than the industry standard. Clearly state your hypothesis and conclusions.

(5 marks)

(b) How many incorrectly stapled handouts would have to be in the sample of 120 for

you to change your conclusion in (a)? Round to whole handouts? (3 marks)

(c) If the true % of errors for the copier is 2.5%, calculate the probability of making a

type II error for your test in part (a). (5 marks)

(d) There is also a photocopier in the co-op office. In a sample of 100 handouts made

using this copier, 6 were badly stapled. Compute a 99% confidence interval for the

difference in % errors between the dept’s copier and the co-op office copier. Let the

dept’s copier be population 1. (5 marks)

(e) Test if to see if there is a different between the dept’s copier and the co-op copier. Use

significance level 0.01 and critical value approach. Clearly state your hypothesis and

conclusions. Let the dept’s copier be population 1. (5 marks)

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