1-The owner of a small convenience store is trying to decide whether to discontinue selling magazines. He suspects that only 5% of the customers buy magazines and thinks that he might be able to sell something more profitable. Before making a final decision, he keeps track of the number of customers who buy magazines each day. On a typical day he has 280 customers in his store. On a typical day, what would be the mean number of customers who buy magazines?

2- Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Five years ago the average life expectancy of all policyholders was 77 years. ABI Insurance wants to determine if its clients now have a longer life expectancy compared to five years ago, on average, so it randomly samples some of its recently paid policies. The insurance company will only change its premium structure if there is evidence that people who buy their policies now are living longer than they were five years ago. The sample has a mean of 78.6 years and a standard deviation of 4.48 years. A Type II error in this context would be

a		Failing to detect an increase in the average life expectancy, when in fact it has
b		Failing to detect an increase in the average life expectancy, when in fact it hasn't
c		Detecting an increase in the average life expectancy, when in fact it has
d		Detecting an increase in the average life expectancy, when in fact it hasn't

3-A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that high employee turnover is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to provide additional training to those employees hired within the last year. After training was implemented, a sample of 450 chips revealed only 27 defects. Which of the following statements is true about this hypothesis test?

a		It is a two-tailed test about a proportion
b		It is a one-tailed test about a mean
c		It is a one-tailed test about a proportion
d		It is a two-tailed test about a mean

4- A walk-in medical clinic believes that arrivals are equally distributed over weekdays (Monday through Friday). It has collected the following data based on a random sample of 100 days.

	FREQUENCY
MONDAY	25
TUESDAY	22
WEDNESDAY	19
THURSDAY	18
FRIDAY	16
	100

At Alpha = 0.05,

a		we fail to reject the null hypothesis and conclude that arrivals are equally distributed based on this sample.
b		we reject the null hypothesis.
c		we fail to reject the alternative hypothesis and can conclude that arrivals are not equally distributed based on this sample.
d		we support the alternative hypothesis. There is strong evidence that arrivals are not the same over weekdays.

5- A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that high employee turnover is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to provide additional training to those employees hired within the last year. After training was implemented, a sample of 450 chips revealed only 27 defects. If the P-value associated with the test statistic is 0.0594, At Alpha = 0.01,

	a	We can conclude that the additional training significantly lowered the defect rate
	b	We can conclude that the additional training did not significantly lower the defect rate
	cc	We can conclude that the additional training significantly increased the defect rate
	d	We can conclude that the additional training did not affect the defect rate