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EconHM9 - Q uestion#1 P lease refer to example#1 on page...

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Question #1 Please refer to example #1 on page 50 (slide 48) of the course packet. A regional fast food chain wants to insure that their customers do not eat meat carrying E.coli bacteria. The preventive measure is to cook the meat at the required temperature. Because of varying patty size and burner temperatures, meats cooked for the same length of time can have different final internal temperatures. The health department is recommending that the newer, digitally controlled burners reduce the variation in the final internal temperatures. There are two models of digitally controlled burners to choose from. The restaurant chain will choose the model with the most consistent final internal temperature of meats cooked. They sample 11 batches of meat cooked by burner model 1, and 13 batches of meat cooked by burner model 2. They found S 1 2 =6.7, and S 2 2 =2.5. Is there a difference in temperature consistency? 1. The appropriate test that the restaurant chain owner would have to perform by is the: f-test for the ratio of variances . 2. What's the value of the appropriate test statistic for this test? 2.68 3. What's the p value for this test? What's the p value for this test? 0.109043655
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4. Can the restaurant chain owner conclude at the 5% significance level that variances are unequal? no 5. For a 95% confidence interval, the lower and upper confidence limits are 0.794414707 and 9.704133895 respectively. Question #2 Please refer to example #2 on page 51 (slide 51) of the course packet. The returns of two portfolios were recorded for ten years. Portfolio 1 had a variance of returns of 295, while portfolio 2 had a variance of 105. Can we conclude at a 5% level of significance that portfolio 1 is riskier (has a higher variance) than portfolio 2? 1. The test statistic for testing this claim will have the following distribution: o F distribution with 9 and 9 degrees of freedom o F distribution with 10 and 10 degrees of freedom o Chi-squared distribution with 10 degrees of freedom o Chi-squared distribution with 9 degrees of freedom 2. The value of the test statistic for testing the hypothesis is 2.80952381 . 3. The p-value associated with this test statistic is 0.069912873 .
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4. Based on your results, what is your conclusion? o Reject the null hypothesis and conclude that the variation in portfolio 1 is larger than in portfolio 2. o Do not reject the null hypothesis and conclude that the variation in portfolio 1 is larger than in portfolio 2. o Reject the null hypothesis and conclude that there is not enough evidence to claim that the variation in portfolio 1 is greater than in portfolio 2. o Do not reject the null hypothesis and conclude that there is not enough evidence to claim that the variation in portfolio 1 is greater than in portfolio 2.
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