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Salaries of postgraduates
The Economics of Education Review (Vol. 21, 2002) published a paper on the relationship
between education level and earnings. The date for the research were obtained from the National
Adult Literacy Survey of more than 25,000 respondents. The survey revealed that males with a
postgraduate degree have a mean salary of $61,340 (with standard error Sx̄ = $2,185), while
females with a postgraduate degree have a mean of $32,227 (with standard error Sx̄ = $932).
Questions
1. The article reports that a 95% confidence interval for μM, the population mean salary of all
males with postgraduate degree, is ($57,050, $65,631). Based on this interval, is there
evidence to say that μM differs from $60,000? Explain.
2. Use the 5-step process to test the hypothesis that the true mean salary of males with
postgraduate degree differs from $60,000. Use α = .50.
Shipping Vehicle and judgment
The authors of an article within the Journal of Marketing Research (Dec. 2011) study grocery
store shopper’ judgments. For one part of the study, 11 consumers were told to put their arm in a
flex position (similar to a shopping basket) and then each consumer was offered several choices
between a vice product and a virtue product (e.g., a movie ticket vs. a shopping coupon, pay later
with a larger amount vs. pay now). Based on these choices, a vice choice score was determined
on a scale of 0 to 100 (where higher scores indicate a greater preference for vice options). The
data in the table are (simulated) choice scores for the 11 consumers. Suppose that the average
choice score for consumers with an extended arm position (similar to pushing a shopping cart) is
known to be μ= 50. The researchers theorize that the mean choice score for consumers shopping
with a flexed arm will be higher than 43 (reflecting their higher propensity to select a vice
product.)
Question
Using the 5-step process, test this hypothesis at α= .05.
Organic–certified coffee
Coffee markets that conform to organic standards focus on the environmental aspects of coffee
growing, such as the use of shade trees and reduced reliance on chemical pesticides. A study of
organic coffee growers was published in Food Policy (Vol. 36, 2010). In a representative sample
of 845 coffee growers from southern Mexico, 417 growers were certified to sell to organic coffee
markets while 77 growers were transitioning to become organic certified. In the United States,
60% of coffee growers are organic certified.
Question
Is there evidence to indicate that fewer than 60% of the coffee growers in southern Mexico are
either organic certified or transitioning to become organic certified? Use the 5-step process for
hypothesis testing and calculate the probability of a Type I error.
Fingerprint expertise
Refer to the Psychological Science (August 2011) study of fingerprint identification. The study
found that when presented with prints from the same individual, a fingerprint expert will
correctly identify the match 92% of the time. In contrast, a novice will correctly identify the
match 75% of the time. Consider a sample of five different parts of fingerprints, where each pair
is a match.
Questions
1. What is the probability that an expert will correctly identify the match in all five pairs of
fingerprints?
2. What is the probability that a novice will correctly identify the match in all five pairs of
fingerprints?
Airline fatalities
U.S. airlines average about 4.5 fatalities per month (Statistics Abstract of the United States:
2012). Assume the probability distribution for x, the number of fatalities per month, can be
approximated by a Poisson probability distribution.
1. Find E (x) and the standard deviation of x.
Problem #5
CHOICE
56
76
62
57
55
61
62
43
57
61
58
Salaries of postgraduates
The Economics of Education Review (Vol. 21, 2002) published a paper on the relationship
between education level and earnings. The date for the research were obtained from the National
Adult Literacy Survey of more than 25,000 respondents. The survey revealed that males with a
postgraduate degree have a mean salary of $61,340 (with standard error Sx̄ = $2,185), while
females with a postgraduate degree have a mean of $32,227 (with standard error Sx̄ = $932).
Questions
1. The article reports that a 95% confidence interval for μM, the population mean salary of all
males with postgraduate degree, is ($57,050, $65,631). Based on this interval, is there
evidence to say that μM differs from $60,000? Explain.
2. Use the 5-step process to test the hypothesis that the true mean salary of males with
postgraduate degree differs from $60,000. Use α = .50.
Judgment
The authors of an article within the Journal of Marketing Research (Dec. 2011) study grocery
store shopper’ judgments. For one part of the study, 11 consumers were told to put their arm in a
flex position (similar to a shopping basket) and then each consumer was offered several choices
between a vice product and a virtue product (e.g., a movie ticket vs. a shopping coupon, pay later
with a larger amount vs. pay now). Based on these choices, a vice choice score was determined
on a scale of 0 to 100 (where higher scores indicate a greater preference for vice options). The
data in the table are (simulated) choice scores for the 11 consumers. Suppose that the average
choice score for consumers with an extended arm position (similar to pushing a shopping cart) is
known to be μ= 50. The researchers theorize that the mean choice score for consumers shopping
with a flexed arm will be higher than 43 (reflecting their higher propensity to select a vice
product.)
Question
Using the 5-step process, test this hypothesis at α= .05.
Organic–certified coffee
Coffee markets that conform to organic standards focus on the environmental aspects of coffee
growing, such as the use of shade trees and reduced reliance on chemical pesticides. A study of
organic coffee growers was published in Food Policy (Vol. 36, 2010). In a representative sample
of 845 coffee growers from southern Mexico, 417 growers were certified to sell to organic coffee
markets while 77 growers were transitioning to become organic certified. In the United States,
60% of coffee growers are organic certified.
Question
Is there evidence to indicate that fewer than 60% of the coffee growers in southern Mexico are
either organic certified or transitioning to become organic certified? Use the 5-step process for
hypothesis testing and calculate the probability of a Type I error.
Fingerprint expertise
Refer to the Psychological Science (August 2011) study of fingerprint identification. The study
found that when presented with prints from the same individual, a fingerprint expert will
correctly identify the match 92% of the time. In contrast, a novice will correctly identify the
match 75% of the time. Consider a sample of five different parts of fingerprints, where each pair
is a match.
Questions
1. What is the probability that an expert will correctly identify the match in all five pairs of
fingerprints?
2. What is the probability that a novice will correctly identify the match in all five pairs of
fingerprints?
Airline fatalities
U.S. airlines average about 4.5 fatalities per month (Statistics Abstract of the United States:
2012). Assume the probability distribution for x, the number of fatalities per month, can be
approximated by a Poisson probability distribution.
1. Find E (x) and the standard deviation of x.