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Unformatted text preview: Practice Problems 4 1. Taxes’R’Us Block is a national chain that prepares income tax returns for individuals. The president of the company wants an average number of 5 customers per clerk per day. On April 15, a random sample of 64 clerks shows the average number of customers per clerk at 4.75. Assume that the overall standard deviation of 1.15. a) Test whether the average number of customers per clerk on April 15 was 5 or it was different. Use α = 0.05. b) Suppose the actual overall average number of customers per clerk on April 15 was 4.8. Was the decision you made in part (a) correct? If not, what type of error has been made? c) What is the pvalue of the test in part (a) ? d) Using the pvalue obtained in part (c) , would you accept or reject the null hypothesis from part (a) at α = 0.07 ? 2. In its advertising, Taxes’R’Us Block claims that the overall average bill for its services does not exceed $75. A consumer agency obtains a random sample of 20 tax returns prepared by the company and finds the average preparation bill for those 20 to be $79.82 with a sample standard deviation of $10.30. (Assume the amounts of the service fees are normally distributed.) a) We would like to test the claim made in the ad. Perform the appropriate test at a 10% significance level. b) What is the pvalue of the test in part (a) ? c) Was the decision you made in part (a) correct? If not, what type of error has been made? d) Construct a 95% confidence interval for the average bill for services at this firm. 3. Taxes’R’Us Block is currently under an IRS investigation for possible underreporting of income by its customers on federal income tax returns....
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This note was uploaded on 02/15/2012 for the course STAT 400 taught by Professor Kim during the Spring '08 term at University of Illinois, Urbana Champaign.
 Spring '08
 Kim
 Statistics, Probability

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