# Applied Statistics in Business and Economics

10.30 In Dallas, some fire trucks were painted yellow (instead of red) to heighten their visibility. During a test period, the fleet of red fire trucks made 153,348 runs and had 20 accidents, while the fleet of yellow fire trucks made 135,035 runs and had 4 accidents. At α = .01, did the yellow fire trucks have a significantly lower accident rate? (a) State the hypotheses. (b) State the decision rule and sketch it. (c) Find the sample proportions and z test statistic. (d) Make a decision. (e) Find the p-value and interpret it. (f ) If statistically significant, do you think the difference is large enough to be important? If so, to whom, and why? (g) Is the normality assumption fulfilled? Explain.

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Accident Rate for Dallas Fire Trucks

Statistic Red Fire Trucks Yellow Fire Trucks

Number of accidents x1 = 20 accidents x2 = 4 accidents

Number of fire runs n1 = 153,348 runs n2 = 135,035 runs

10.44 Does lovastatin (a cholesterol-lowering drug) reduce the risk of heart attack? In a Texas study, researchers gave lovastatin to 2,325 people and an inactive substitute to 2,081 people (average age 58). After 5 years, 57 of the lovastatin group had suffered a heart attack, compared with 97 for the inactive pill. (a) State the appropriate hypotheses. (b) Obtain a test statistic and p-value. Interpret the results at α = .01. (c) Is normality assured? (d) Is the difference large enough to be important? (e) What else would medical researchers need to know before prescribing this drug widely?

10.46 To test the hypothesis that students who finish an exam first get better grades, Professor Hardtack kept track of the order in which papers were handed in. The first 25 papers showed a mean score of 77.1 with a standard deviation of 19.6, while the last 24 papers handed in showed a mean score of 69.3 with a standard deviation of 24.9. Is this a significant difference at α = .05? (a) State the hypotheses for a right-tailed test. (b) Obtain a test statistic and p-value assuming equal variances. Interpret these results. (c) Is the difference in mean scores large enough to be important? (d) Is it reasonable to assume equal variances? (e) Carry out a formal test for equal variances at α = .05, showing all steps clearly.

10.56 A sample of 25 concession stand purchases at the October 22 matinee of Bride of Chucky showed a mean purchase of $5.29 with a standard deviation of $3.02. For the October 26 evening showing of the same movie, for a sample of 25 purchases the mean was $5.12 with a standard deviation of $2.14. The means appear to be very close, but not the variances. At α = .05, is there a difference in variances? Show all steps clearly, including an illustration of the decision rule.

11.24 In a bumper test, three types of autos were deliberately crashed into a barrier at 5 mph, and the resulting damage (in dollars) was estimated. Five test vehicles of each type were crashed, with the results shown below. Research question: Are the mean crash damages the same for these three vehicles?

Crash Damage ($)

Goliath Varmint Weasel

1,600 1,290 1,090

760 1,400 2,100

880 1,390 1,830

1,950 1,850 1,250

1,220 950 1,920

https://brainmass.com/statistics/hypothesis-testing/applied-statistics-in-business-and-economics-246906

#### Solution Summary

The solution provides step by step method for the calculation of hypothesis testing problems . Formula for the calculation and Interpretations of the results are also included. The questions are from

Applied Statistics in Business and Economics by David P Doane and Lori E. Seward, McGraw Hill; 1st Edition (2006)