ECONOMICS 2B03: Analysis of Economic Data I
Department of Economics
McMaster University
Assignment 4, Fall 2012, Due Wednesday November 7
Name and Student ID:
In order to facilitate grading, kindly complete your work in the space provided. It might be
helpful to work out your answers ▯rst then copy your ▯nal work to the space provided. Plots in R
are to be cut and paste, and note that hand drawn graphs are not acceptable. You may, of course,
edit the assignment PDF directly if you so choose (you will receive bonus points for doing so).
1. De▯ne the following terms in a sentence (or short paragraph) and state a formula if appro-
priate.
(a) Hypothesis
(b) Goodness of ▯t test
(c) P-value
(d) Level of signi▯cance of a test
(e) Type II Error 2. A coin operated co▯ee machine is set to pour 8 oz per cup. A random sample of the weights
of a number of cups is as follows: 8.40, 8.25, 8.05, 7.84, 7.36, 8.54, 7.56, 7.56, 8.02, 7.39, 8.34,
8.26. Test the hypothesis that the machine is delivering at the level set by the manufacturer.
Use a 0.05 level of signi▯cance.
3. The distribution of scores on a nationally administered graduate admissions test has remained
normally distributed with a standard deviation of 100 points for many years. The test is
designed to have a mean score of 500. This year a preliminary sample of 144 tests has been
found to have a mean score of 482.
(a) Test the hypothesis that this year’s mean nationwide score will turn out to be 500. Use
a 0.01 level of signi▯cance.
(b) Calculate a 95% con▯dence interval for the mean score from the preliminary sample.
2 4. A Canadian-wide marketing survey found that only one-▯fth of Canadians drink beer on a
regular basis. A random sample of 36 residents in North York found nine who were regular
beer drinkers. Test whether or not North York has a greater then the national proportion of
beer drinkers.
5. Two di▯erent brands of milk are randomly sampled, and the fat content in each bottle of
milk is determined. Twenty-six bottles of Brand A milk yielded an average fat content of
▯ 2
X 1 26 grams with s = 51 and thirty one bottles of Brand B yielded an average fat content
of X 2 25:8 grams with s = 2.
Test the hypothesis that both brands have identical average fat content at the 5% level of
signi▯cance

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