EC315 Midterm Exam

# EC315 Midterm Exam - EC/315 Midterm Examination Name:_...

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EC/315 Midterm Examination Name:___________ Directions: This test is open-book and open notes and covers the content from weeks 1 through week 4 of EC/315. The test will be typed and submitted in the Dropbox marked Midterm Exam. The midterm is due the last day of Week 4. PROBLEM 1 (Weight 20 points). NBC TV news, in a segment on the price of gasoline, reported last evening that the mean price nationwide is \$1.50 per gallon for self-serve regular unleaded. A random sample of 35 stations in the Milwaukee, WI, area revealed that the mean price was \$1.52 per gallon and that the standard deviation was \$0.05 per gallon. At the .05 significance level, can we conclude that the price of gasoline is higher in the Milwaukee area? Calculate the p- value and interpret. The question asks for "higher than" so this is a one-tailed test. ; Using the NORMDIST function in Excel, one-tailed p = 0.009 Since p < , the null hypothesis should be rejected. The mean price is higher in Milwaukee at a .05 significance. PROBLEM 2: (Weight 20 points) . Suppose Babsie generated the following probability distribution: X p(x) 5 .25 7 .30 10 .25 12 .05

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15 .15 a. Is this probability distribution discrete or continuous? Explain your reasoning. b. Calculate the expected value of X. Show your work!! c. Calculate the variance of X. Show your work!!!
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## This note was uploaded on 11/11/2011 for the course EC 315 taught by Professor Barcus during the Spring '10 term at Park.

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EC315 Midterm Exam - EC/315 Midterm Examination Name:_...

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