EC/315 Midterm Examination
Name:__________________________________________
Directions:
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 20 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.
PROBLEM 2: (Weight 20 points).
Suppose Babsie generated the following probability distribution:
X
p(x)
5
7
10
12
15
.25
.30
.25
.05
.15
a.
b.
c.
d.
Is this probability distribution discrete or continuous? Explain your reasoning.
Calculate the expected value of X. Show your work!!
Calculate the variance of X. Show your work!!!
Calculate the standard deviation. Show your work!!
PROBLEM 3: (Weight 20 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 students at four year universities study at least four hours per week. Seventy percent of one hundred randomly selected Park University students surveyed claimed to study more than four hours per week. Should the University retract its previous statement? Explain why or why not. Answer using a 95 percent confidence interval.
