Sampling Distribution: Hypothesis Testing - Two sample

problem

November 29, 2024

Q1 Greystone Department Stores, Inc., operates two stores in Buffalo, New York
: One is in the inner city and the other is in a suburban shopping center.
The regional manager wants to analyse whether the customer demographics at
the two locations contribute to the different selling patterns in them. Suppose
the manager asks to investigate the difference between the mean ages of the
customers who shop at the two stores. The data collected from the two inde-
pendent simple random samples of Greystone customers provided the following
results.

Inner City Store Suburban Store

Sample size n1 = 36 n2 = 49
Sample mean x̄1 = 40 years x̄2 = 35 years

Based on the data from previous customer demographic studies, the two pop-
ulation standard deviations are known to be σ1 = 9 years and σ2 = 10 years.
Perform a hypothesis test to determine whether the customer age plays a sig-
nificant role in the sales of two locations.

Q2 As part of a study to evaluate differences in education quality between two

training centers, a standardized examination is given to individuals who are
trained at the centers. The standardized examination given previously in a
variety of settings always resulted in an examination score standard deviation

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 near 10 points. Thus, we will use this information to assume that the popu-
lation standard deviation are known with σ1 = 10 and σ2 = 10. Independent
random samples of n1 = 30 individuals from training center A and n2 = 40
individuals from training center B are taken. The respective sample means are
x̄1 = 82 and x̄2 = 78. Do these data suggest a significant difference between
the population means at the two training centers?

Q3 Clearwater National Bank would like to test the hypothesis that the mean
checking account balance maintained by the population of Cherry Grove cus-
tomers and the population of Beechmount customers are different. The sample
data shows n1 = 28, x̄1 = $1025, s1 = $150 and n2 = 22, x̄2 = $910, s2 = $125.

Q4 The Tippie College of Business obtained the following results on the salaries of
a recent graduating class:

Finance Majors Business Analytics Majors

n1 = 110 n2 = 30
x̄1 = $48, 537 x̄2 = $55, 317
s1 = $18, 000 s2 = $17, 500

(a) Formulate the hypothesis so that, if null hypothesis is rejected, we can

conclude that salaries for Finance majors are significantly lower than the
salaries of Business Analytics majors. Use α = 0.05.
(b) What is the value of the test statistic?
(c) What is the p-value?
(d) What is your conclusion?

Q5 Suppose employees at a manufacturing company can use two different methods

to perform a production task. To maximize production output, the company
wants to identify the method with the smaller mean completion time. One
simple random sample of workers is selected. Each worker first uses one method
and then uses the other method. The data on task completion times for both
the methods is presented below:

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 Worker Method 1 Method 2
1 6.0 5.4
2 5.0 5.2
3 7.0 6.5
4 6.2 5.9
5 6.0 6.0
6 6.4 5.8

Perform a hypothesis test to determine the effectiveness of both the methods.

Q6 Bank of America’s Consumer spending survey collected data on annual credit

card charges in seven different categories of expenditures : transportation,
groceries, dining out, household expenses, home furnishings, apparel, and en-
tertainment. Using data from a sample of 42 credit card accounts, assume
that each account was used to identify the annual credit card charges for gro-
ceries and dining out. Using difference data, the sample mean difference was
d¯ = $850, and the sample standard deviation was sd = $1123.

(a) Formulate the hypotheses to test for no difference between the population
mean credit card charges for groceries and the population mean credit
card charges for dining out.
(b) What is your conclusion at α = 0.05 level of significance.
(c) Calculate the p-value.
(d) Which category, groceries or dining out, has a higher population mean
annual credit card charge?

Q7 Researchers with Oceana, a group dedicated to preserving the ocean ecosystem,

reported finding that 33% of fish sold in retail outlets, grocery stores, and sushi
bars throughout the united states had been mislabeled. The following data
show the number labeled incorrectly for samples of tuni and mahi mahi.

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 Tuna Mahi Mahi
Sampled 220 160
Mislabeled 99 56

Does this mislabeling differ for different species of fish?

Q8 Investors commonly use the standard deviation of the monthly percentage re-
turn for a mutual fund as a measure of the risk for the fund; in such cases,
a fund that has a larger standard deviation is considered more risky than a
fund with lower standard deviation. The standard deviation for the American
Century Equity Growth and the Fidelity Growth Discovery fund were recently
reported to be 15.0% and 18.9%, respectively. Assume that each of these stan-
dard deviations is based on a sample of 60 months of returns. Do the sample
results support the conclusion that the Fidelity fund has a larger population
variance than the American Century fund? Which fund is more risky?

Q9 Sample data showing battery life between charges for the Samsung Galaxy
S9 when the primary use is talk time and when the primary use is Internet
applications is as follows:

Primary use : Talking

35.8, 22.2, 24.0, 32.6, 18.5, 42.5, 28.0, 23.8, 30.0, 22.8, 20.3, 35.5.

Primary use : Internet

14.0, 12.5, 16.4, 11.9, 9.9, 3.1, 5.4, 11.0, 15.2, 4.0, 4.7.

(a) Formulate hypotheses about the two population variances that can be
used to determine if the variance in battery life is greater for the talk
time application.
(b) Conduct the hypothesis test to determine if the population variance in
battery life is greater for the talk time application.

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(c) What are the estimates of the standard deviations of battery life for the
two populations.