This test is open-book and open notes and covers the content from weeks 1 through week 4 of EC/315. The test will be typed and submitted in the Dropbox marked Midterm Exam. The midterm is due the last day of Week 4.
PROBLEM 1 (Weight 40 points).
NBC TV news, in a segment on the price of gasoline, reported last evening that the mean price nationwide is $1.50 per gallon for self-serve regular unleaded. A random sample of 35 stations in the Milwaukee, WI, area revealed that the mean price was
$1.52 per gallon and that the standard deviation was $0.05 per gallon. At the .05 significance level, can we conclude that the price of gasoline is higher in the Milwaukee area? Calculate the p-value and interpret.
Ho: u < 1.50 H1>1.50
Reject Ho and accept H1
PROBLEM 2: (Weight 40 points).
Suppose Babsie generated the following probability distribution:
X p(x) | 5 .25 | 7 .30 | 10 .25 | 12 .05 | 15 .15 |
a. Is this probability distribution discrete or continuous? Explain your reasoning.
This probability distribution is continuous because it is a variable that can assume one of an infinitely large number of values within limitations. a. Calculate the expected value of X. Show your work!! u=.25(5)+.30(7)+.25(10)+.05(12)+.15(15)=1.25+2.1+2.5+.6+2.25=8.7
b. Calculate the variance of X. Show your work!!! o^2=(5-8.7)^2(.25)+(7-8.7)^2(.30)+(10-8.7)^2(.25)+(12-8.7)^2(.05)+(15-8.7)^2(.15)= 3.4225+.867+.4225+.5445+5.9535=11.21 c. Calculate the standard deviation. Show your work!!
PROBLEM 3: (Weight 40 points).
Babsie is a public affairs specialist at Park University. A press release issued by Babsie based on some research claims that Park University students study at least as much as the national average for students at four year universities. Across the nation, 73 percent of all