Clarion ECON 222 Assignment 2016

Question 1 (2 points)

Data for Questions 1-3

In an article in Accounting and Business Research, Carlsow and Kaplan study the effect of control on audit delay. Two levels of control are considered, owner vs. manager controlled. Audit delay is the number of days between the company’s financial year-end to the auditor’s report. The mean audit delays for the two types of control and the Excel analysis of the data are summarized in the box below. 1. Which of the following is the correct the null and alternative hypotheses to determine if the average audit delay of Manager-controlled firms exceeds the average audit delays for Owner-controlled firms?

Question 1 options:

H0: ?O - ?M ? 0 versus H1: ?O - ?M < 0

H0: ?O - ?M ? 0 versus H1: ?O - ?M > 0

H0: ?O - ?M = 0 versus H1: ?O - ?M ? 0

H0: O - M = 0 versus H1: O - M ? 0

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Question 2 (4 points)

Refer to the information given in question 1 above.
Compute the value of the Z test statistic for this test (use 3 decimal places, i.e. 1.234).

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Question 3 (3 points)

Refer to the information given in question 1 above.
a. Based on these results, what conclusions can you draw?
b. Make an appropriate statement to interpret these results. Be sure to use the information provided by the p-value.

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Question 4 (2 points)

Use the following data and table for questions 4-7

A company in has developed a device that can be attached to car engines which they believe will increase the miles per gallon that cars will get. The owners are interested in testing to determine if their device will increase mean mpg for cars using the device versus those that are not using the device. In order to isolate the effect of the device and to control for the variability in mpg from vehicle-to-vehicle and driver-to-driver, the researchers devised an experiment where they test each vehicle and driver both with and without the device installed. The summary results represent the difference in mpg for a random sample of cars. The variances are assumed equal and the populations normally distributed.

Question 4: Specify appropriate null and alternative hypotheses.

H₀:

H₁:

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Question 5 (2 points)

Refer to the information given in question 4 above.
What is the critical value if the owners wish to test at the 0.10 significance level (3 decimal places, i.e. 1.234)?

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Question 6 (4 points)

Refer to the information given in question 4 above.
Compute the value of the test statistic (3 decimal places, i.e. 1.234).

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Question 7 (3 points)

Refer to the information given in question 4 above.
a. What conclusion can you make regarding these results?
b. Make an appropriate statement to interpret these results.

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Question 8 (2 points)

Use the provided data table for Questions 8-13

An article in the Journal of Advertising examines the use of humor in television ads in the United States. It has long been believed that humorous advertising appeals more to men than women and that humorous advertising should not, therefore, be used to market products to women. To test this belief, independent random samples of men and women were shown television commercials and the number preferring humorous ads for each group determined. The following results were obtained:

Question 8.

Report the sample proportion of males that prefer humorous ads,

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Question 9 (2 points)

Refer to the information given in question 8 above.

Report the sample proportion of female that prefer humorous ads,

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Question 10 (2 points)

Refer to the information given in question 8 above.
Report the pooled proportion of males and females that prefer humorous ads (four decimal places of accuracy is expected),

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Question 11 (4 points)

Refer to the information given in question 8 above.

Report the value of the test statistic (3 decimal places of accuracy is expected, i.e. 1.234):

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Question 12 (2 points)

Refer to the information given in question 8 above.
Using a significance level equal to 0.01, what critical value should be used for this test (3 decimal places, i.e. 1.234)?

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Question 13 (3 points)

Refer to the information given in question 8 above.
What conclusion should be reached based on the sample data? Make an appropriate statement to interpret these results.

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Question 14 (2 points)

Use the following material to answer Questions 14 and 15

A fast food restaurant that sells burritos is concerned about the variability in the amount of filling that different employees place in the burritos. To achieve product consistency they need the standard deviation of filling weight to be no more 1.5 ounces. A sample of n = 13 burritos showed a sample variance of 2.89 ounces.

Question 14. Using a 0.05 level of significance, report the critical value of chi-square (3 decimal places, i.e. 1.234).

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Question 15 (4 points)

Refer to the information given in question 14 above.
Report the chi-square test statistic for this test (3 decimal places of accuracy is expected, i.e. 1.234).

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Question 16 (2 points)

Use the following information to answer Questions 16-18

A frozen food company that makes burritos currently has employees making burritos by hand. They are considering purchasing equipment to automate the process and want to determine if the automated process would result in lower variability of burrito weights. They take a random sample from each process as shown below.

Question 16.
Report the critical value that would be used to conduct a hypothesis test using a 0.05 level (2 decimal places, i.e. 1.234).

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Question 17 (4 points)

Refer to the information given in question 16 above.
In conducting the hypothesis test, the test statistic is (3 decimal places of accuracy is expected, i.e. 1.234):

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Question 18 (3 points)

Refer to the information given in question 16 above.
What conclusions can be drawn from these results? Make an appropriate statement to interpret these results.

Question 18 options:

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