1. A regression analysis between sales (in $1000) and price (in dollars) resulted in the following equation

y-hat = 50,000 - 8x

The above equation implies that an

a. increase of $1 in price is associated with a decrease of $8 in sales

b. increase of $8 in price is associated with an increase of $8,000 in sales

c. increase of $1 in price is associated with a decrease of $42,000 in sales

d. increase of $1 in price is associated with a decrease of $8000 in sales

2. Regression analysis was applied between sales (in $1,000) and advertising (in $100), and the following regression function was obtained.

y-hat = 75 + 5.2 x

Based on the above estimated regression line, if advertising is $8,021, then the point estimate for sales (in dollars) is _______.

3. A computer disk drive manufacturer claims that the average time to failure for its hard drives is 14,400 hours. You work for a consumer group that has decided to examine this claim. Technicians ran 16 drives continuously for three years. The time to failure (in hours) are given in the table below. You want to test the manufacturer's claim.

Time Until Failure (Hours)
330	620	1870	2410	4620	6396	7822	8102
8309	12,882	14,419	16.092	18,384	20,916	23,812	25,814

What assumption did you make in performing the test? (Select one)

A. All variances are equal.

B. All means are equal.

C. The average time to failure was zero.

D. The time to failure for the hard drives is normally distributed.

E. No assumptions needed to be made.

3.1. In layman's terms, what would be the null hypotheses if you were conducting a hypothesis test to contest the manufacturer's claim?

A. The manufacturers believes the hard drives will not fail too soon.

B. The computer disk drive manufacturer believes that the time to failure for the hard drives is at least 14,400 hours.

C. The computer disk drive manufacturers believe that the hard drives will last up to 14,400 hours.

D. The computer disk drive manufacturers believe that the hard drives will not fail.

4. A confidence interval is used to estimate (Select one)

A. the shape of the population's distribution

B. the sampling distribution

C. a sample statistic

D. a population parameter

5. The ability of a confidence interval to contain the value of the population parameter is described by the (Select one)

A. confidence level

B. degrees of freedom

C. precise value of the population mean

D. Type II Error

6. Employees of MNM Corporation are about to undergo a retraining program. Management is trying to determine which of three programs is the best. They believe that the effectiveness of the programs may be influenced by gender. A factorial experiment was designed. You are given the following information.

	Male	Female
Program 1	320	380
	240	300
Program 2	160	240
	180	210
Program 3	240	360
	290	380

Below is the ANOVA table.

ANOVA
Source of Variation	SS	df	MS	F	P-value	F crit
Program	36150	2	18075.0000	12.7588	0.0069	5.1433
Gender	16133.3333	1	16133.3333	11.3882	0.0150	5.9874
Interaction	1516.6667	2	758.3333	0.5353	0.6111	5.1433
Within	8500	6	1416.6667
Total	62300	11

What advice would you give MNM about the effectiveness of programs about gender?

A. Since the interaction term is significant, we don't concern ourselves with the main effects (i.e., the differences between the three programs and the differences between gender) and conclude that there is a relationship between gender and programs.

B. Since the interaction term is not significant, we can now shift our focus to the main effects (Programs and Gender). The small p-values associated with Program effect and Gender effect indicates that we have a significant difference in average effectiveness. Specifically, the effectiveness between males and females is significantly different; and the average effectiveness between programs is significantly different. Further investigation is warranted to determine which of the three programs is different from the others.

C. The interaction term is significant so we can now test the differences between Program effects and Gender effects. This will allow us to determine the best Program-Gender combination for the retraining program.

D. Since the interaction term is not significant, we need to revisit the design or model and collect more data. The current two-way ANOVA is not very informative.

7. In an experiment to determine the best method by which to assess college students, a group of students were exposed to one of three types of tests. The three methods were: all multiple choice questions, all free-response questions, and a mix of question types (both multiple choice and free-response questions). The scores were recorded for each test taken. Fifteen students were used in the study, and grouped by class level (freshman, sophomore, junior, senior, and graduate). The following tables provide the results of the experiment.

Class Level	Multiple Choice	Free-Response	Mixed
Freshman	78	84	90
Sophomore	82	90	95
Junior	90	94	98
Senior	88	96	100
Graduate	95	98	99

Below is the ANOVA table.

ANOVA
Source of Variation	SS	df	MS	F	P-value	F crit
Class Level	337.0667	4	84.2667	22.0786	0.000222	3.8379
Testing Method	242.8	2	121.4	31.8079	0.000156	4.4590
Error	30.5333	8	3.8167
Total	610.4	14

What would you tell the researchers about their results?

A. At the 0.01 level of significance, there is a significant difference among testing methods, and blocking, based on Class Level was useful in the analysis.

B. At the 0.01 level of significance, there is a significant difference among testing methods, but blocking, based on Class Level was NOT useful in the analysis.

C. These results reveal no significant differences.

D. Graduate Students score significantly better than Freshman, regardless of the testing method.

8. You work for a regulatory agency that oversees the certification of the safety of pesticides. The manufacturer of a pesticide, used on tomatoes, claims that with proper use, the amount of the pesticide that will be in the tomatoes that go to market will be well below required standards. Your job is to set-up a statistical analysis of the amount of the pesticide measured in tomatoes. Which of the following approaches represents the best ethical choice, in terms of protecting human health?

A. Measure the pesticide level in a random sample of tomatoes, and set-up a hypothesis test, with the null hypothesis that the pesticide levels do not meet the standard. Assume that the pesticide is not safe, unless there is evidence to prove otherwise.

B. Measure the pesticide level in tomatoes from one crate, and if they are all meeting the standard, certify the pesticide.

C. Measure the pesticide level in a random sample of tomatoes, and set-up a hypothesis test, with the null hypothesis that the pesticide levels meet the standard. Assume that the pesticide is safe, as long as there is not evidence to prove otherwise.

9. Your company has found a new, less expensive, source of paint for the strollers that you manufacture. Since the paint is produced in a country with less stringent safety requirements than you are used to, you want to be sure that the lead level in the paint is well below safe levels. Which of the following approaches represents the best ethical choice, in terms of protecting human health?

A. Measure the lead level in a random sample of paint cans, and set-up a hypothesis test, with the null hypothesis that the lead levels are not safe.

B. Measure the lead level in a random sample of paint cans, and set-up a hypothesis test, with the null hypothesis that the lead levels are safe.

C. Measure the lead level in the first 10 cans of paint provided, and if they are all within safe levels, buy paint from the new source.