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Lecture 1

MGEB12H3 Lecture 1: assignment 2 (2015 winter)

Economics for Management Studies
Course Code
Vinh Quan

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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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