Economic Statistics Exam 1
Last name:
September 22, 2011
First name:
Class time: 11:0012:15 or 12:301:45
PID:
Please sign that you abide by the honor pledge:
This exam contains
twelve
short answer questions (worth 6 points each) and
three
long
answer questions (worth 10 points each).
Please answer in the space provided.
In all
problems where you need to make a calculation, simplify your answer as much as
possible.
Technique is important, so show your work clearly.
Short Questions (6 points apiece)
1. What is the approximate relationship between the range and standard deviation of a
variable?
The standard deviation is approximately
¼
of the range.
2. The variable
X
comes from a distribution with a mean of
29
and a variance of
4
. If
Mr. Smith’s value of
X
equals 34, then his standardized value is what?
The standardized value is calculated as
z
=
(
x
−
x
)/
s
x
. Note that
s
x
=
s
x
2
=
4
=
2
. In this
case, the answer is
z
=
(34
−
29)/2
=
2.5
.
3. What does it mean for events
A
and
B
to be “statistically independent”, and what
does it mean for them to be “mutually exclusive”?
Two events are statistically independent if knowing the outcome of one does not cause us to
revise our expectations about the likeliness of the other;
P
[
A

B
]
=
P
[
A
]
. Two events are
mutually exclusive if they cannot both occur simultaneously;
P
[
A
and
B
]
=
0
.
4. What is the rule of thumb for determining whether the correlation between two
variables is a “meaningful relationship” or due to chance?
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '08
 turchi
 Standard Deviation, Mean, Sxy

Click to edit the document details