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favorite luxury car for 25% of leases in Atlanta. Suppose a US car manufacturer conducts its
own survey in an effort to determine if this figure is correct. Of the 384 leases in Atlanta
surveyed, 79 lease a Lexus. Calculate the appropriate test statistic to test the hypotheses.
A. 2.15
B. 2.00
C. 0.91
D. 2.00
E. 2.51 1750 Chapter 01  An Introduction to Business Statistics 145. One survey conducted by a major leasing company determined that the Lexus is the
favorite luxury car for 25% of leases in Atlanta. Suppose a US car manufacturer conducts its
own survey in an effort to determine if this figure is correct. Of the 384 leases in Atlanta
surveyed, 79 lease a Lexus. Calculate the pvalue associated with the test statistic.
A. 0.0228
B. 0.0456
C. 0.1814
D. 0.3628
E. 0.4772 146. One survey conducted by a major leasing company determined that the Lexus is the
favorite luxury car for 25% of leases in Atlanta. Suppose a US car manufacturer conducts its
own survey in an effort to determine if this figure is correct. Of the 384 leases in Atlanta
surveyed, 79 lease a Lexus. Calculate a confidence interval that tests the hypotheses at α = .
02.
A. [.165 .246]
B. [.179 .232]
C. [.142 .269]
D. [.153 .259]
E. [.158 .254] 147. If you live in California, the decision to buy earthquake insurance is an important one. A
survey revealed that only 133 of 337 randomly selected residences in one California county
were protected by earthquake insurance. Calculate the appropriate test statistic to test the
claim that less than 40% of the residents in the county are protected by earthquake insurance.
A. 0.20
B. 0.40
C. 0.13
D. 0.20
E. 0.40 1751 Chapter 01  An Introduction to Business Statistics 148. If you live in California, the decision to buy earthquake insurance is an important one. A
survey revealed that only 133 of 337 randomly selected residences in one California county
were protected by earthquake insurance. What is the pvalue associated with the test statistic
calculated to test the claim that less than 40% of the county residents are protected by
earthquake insurance.
A. 0.0793
B. 0.1554
C. 0.3446
D. 0.4207
E. 0.4483 1752 Chapter 01  An Introduction to Business Statistics Chapter 09 Hypothesis Testing Answer Key True / False Questions 1. The manager of the quality department for a tire manufacturing company wants to know
the average tensile strength of rubber used in making a certain brand of radial tire. The
population is normally distributed and the population standard deviation is known. She uses a
Z test to test the null hypothesis that the mean tensile strength is less than or equal to 800
pounds per square inch. The calculated Z test statistic is a positive value that leads to a pvalue of .067 for the test. If the significance level is .10, the null hypothesis would be
rejected.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Hypothesis testing 2. The manager of the quality department for a tire manufacturing company wants to know
the average tensile strength of rubber used in making a certain brand of radial tire. The
population is normally distributed and the population standard deviation is known. She uses a
Z test to test the null hypothesis that the mean tensile strength is 800 pounds per square inch.
The calculated Z test statistic is a positive value that leads to a pvalue of .045 for the test. If
the significance level (α) is .05, the null hypothesis would be rejected.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Hypothesis testing 1753 Chapter 01  An Introduction to Business Statistics 3. A Type I error is rejecting a true null hypothesis.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Type I or Type II error 4. The larger the pvalue, the more we doubt the null hypothesis.
FALSE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Hypothesis testing 5. A Type II error is failing to reject a false null hypothesis.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Type I or Type II error 1754 Chapter 01  An Introduction to Business Statistics 6. You cannot make a Type II error when the null hypothesis is true.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Type I or Type II error 7. For a hypothesis test about a population proportion or mean, if the level of significance is
less than the pvalue, the null hypothesis is rejected.
FALSE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Hypothesis testing 8. Alpha (α) is the probability that the test statistic would assume a value as or more extreme
than the observed value of the test.
FALSE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Hypothesis testing 9. Everything else being constant, increasing the sample size decreases the probability of
committing a Type II error.
TRUE AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Topic: Type I or Type II error 1755 Chapter 01  An Introduction to Business Statistics 10. The null hypoth...
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