Unit 2: Testing of Hypothesis for two population parameters

Test of hypothesis for difference between two populations’ means

1. A random sample of size 35 taken from normal populations with a standard deviation 5.2
has a mean 81. A second sample of size 36 taken from other normal population with a
standard deviation 3.4 has a mean 76. Test whether the two sample means do not differ
significantly at 5% level of significance.

2. A random sample of heights of 1600 Nepalese has a mean of 67.85 inches and a standard
deviation 2.56 inches. Another random sample of heights of 6400 Indians has a mean of
68.55 inches and a standard deviation of 2.52 inches. Do the data support the research
hypothesis that Indians are on average taller than Nepalese?

3. Two research laboratories have independently produced drugs that provide relief of
cough. The first drug was tested on a group of 90 cough suffers and produced an average
of 8.5 hrs relief and a sample standard deviation of 1.8 hrs. The second drug tested on 80
cough suffers, producing an average of 7.9 hrs of relief and a sample standard deviation
of 2.1 hrs. at 0.05 level of significance, does the second drug provide a significantly
shorter period of relief?

4. A survey found that the average hotel rate in New Orleans is $ 88.42 and average room
rate in Phonix is $80.61. Assume that the data were obtained from two samples of 50
hotels each and that the standard deviations were $5.62 and $ 4.83 respectively. At œ =
0.05 can it be calculated that there is no significant difference in the rate.

5. The purchasing director for an industrial parts factory is investigating the possibility of
purchasing a new type of milling machine. She determines that the new machine will be
bought if there is evidence that the parts produced have a higher breaking strength than
those from the old machine. The population standard deviation of the breaking strength
for the old machine is 10 kgs and for the new machine is 9 kgs. A sample of 100 parts
taken from the old machine indicates a sample mean of 65 kgs, whereas a similar sample
of 100 from the new machine indicates a sample mean of 72 kgs. Using the 0.01 level of
significance, is there evidence that the purchasing director should buy the new machine?
Also compute p – value and interpret its meaning.

6. A real estate agency wants to compute the appraised values of single family homes in two
Nassau County, New York, communities. A sample of 60 listings in Farmingdale and 99
listings in Levittown yields the following results
FARMINGDALE LEVITTOWN
At Sample mean 191.33 172.34 the 0.05
level Sample standard deviation 32.60 16.92 of
Sample size 60 99 significance,
is there evidence of a difference in the average appraised values for single family homes
in the two Nassau County communities?
7.

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Unit 2: Testing of Hypothesis for two population parameters

8. Thirty five
City Mean hourly earning Standard Size of major
from sample deviation of sample employers
sample were asked
to Pokhara $8.95 $0.40 200 give the
Butwal $9.1 $0.60 175 expected
increase (in percentages) between their 1999 costs and their year 2000 costs. The
companies’ prescription drug benefit costs were expected to increase, on average, 11.5%
for workers and 15.7% for retirees. Assume that the population standard deviation of
increased costs for workers is 5% and for retirees is 6%. Using the 0.05 level of
significance, is there evidence that the average prescription drug costs for retirees is
expected to increase more than the average prescription drug costs for workers?

9. Are Japanese managers more motivated than American manager? A randomly

Test the hypothesis at 5% level of significance that the average SATL scores of Japanese
managers is significantly higher than the average SATL scores of American mangers.

10. A consumer research organization routinely selects several car models each year and
evaluates their fuel efficiency. In this year’s study of two similar subcompact models
from two different automakers, the average gas mileage for 50 cars of brand A was 27.2
miles per gallon (mpg), and the standard deviation was 3.8 mpg. The 60 brand B cars that
were tested averaged 32.1 mpg, and the standard deviation was 4.3 mpg. At œ = 0.01,
should it be concluded that brand A cars have lower average gas mileage than do brand B
cars?
11. A manpower development statistician is asked to determine whether the hourly wages of
semi-skilled workers are the same in two cities. The test is to be done at the 0.05
significance level. The sample results are given in the following table.

12. You are a financial analyst for Charles Schwab. Is there a difference in average dividend
yield between stocks listed on the NYSE and NASDAQ? You collect the following data:
NYSE NASEAQ
Number 15 15
Sample mean 3.27 2.53
Sample st.dev. 1.3 1.16
Assuming equal variances, is there a difference in average yield (œ = 0.05)

13. The operation manager at a light bulb factory wants to determine if there is any
difference in the average life expectancy of bulbs manufactured on two types of machine.

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Unit 2: Testing of Hypothesis for two population parameters

The process standard deviation of machine I is 110 hours and of machine II is 125 hours.
A random sample of 25 light bulbs obtained from machine I indicates a sample mean of
375 hours and a similar sample of 25 from machine II indicates a sample mean of 362
hours. Using the 5% level of significance, is there any evidence of a difference in the
average life of bulbs produced by the two types of machine?

14. The average gas mileage for 12 cars of brand A was 27.2 miles per gallon and the
standard deviation was 3.8 mpg. The nine brand B cars that were tested averaged 32.1
mpg and the s.d. was 4.3 mpg. At œ = 0.01 should it conclude that brand A cars have
lower average gas mileage than do brand B cars?

15. A credit insurance organization has developed a new hi – tech method of training new
sales personnel. The company sampled 16 employees who were trained the original way
and found average daily sales to be Rs. 60000 and sample standard deviation was Rs.
2545. They also sampled 11 employees who were trained using the new method and
found average sales to be Rs. 75000 and sample s.d. was Rs. 1980. At œ = 0.05, can the
company conclude that average daily sales have increased markedly under the new plan?

16. A company claims that its light bulbs are superior to those of the competitor on the basis
of a study which showed that a sample of 40 of its bulbs had an average life time 628
hours of continuous use with a standard deviation of 27 hours. While sample of 30 bulbs
made by competitor had an average life time of 619 hours of continuous use with a
standard deviation of 25 hours. Test at the 5% level of significance, whether this claim is
justified.

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Unit 2: Testing of Hypothesis for two population parameters

Paired t-test for difference of Means:

1. The sales of an items in eight shops before and after advertisement is given as:
Before 70 65 48 72 80 92 98 100
After 72 70 53 75 84 95 105 104
Test whether advertisement was effective or not.
2. Ten accountants were given intensive coaching and four tests were conducted in a month.
The scores of tests 1 and 4 are given below.

Accountants 1 2 3 4 5 6 7 8 9 10
Marks in 1 test
st
50 42 51 42 60 41 70 55 62 38
Marks in 4th test 62 40 61 52 68 51 64 63 72 50
Does the score from 1 to 4th test shows an improvement? Test at the 5% level of
st

significance.
3. BBA students were selected by a big organization and they were given an IQ test
immediately after the selection and their scores out of 50 were noted. A two months
training was arranged for them and on completion IQ test was given and scores recorded.
Students 1 2 3 4 5 6 7 8 9
Scores (Before) 31 35 38 25 40 45 40 28 18
Scores (After) 32 30 32 37 38 37 42 40 27

On the basis of the results can it be concluded that the training has benefited the students?
Use the 0.01 level of significance.

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Unit 2: Testing of Hypothesis for two population parameters

Two samples test of hypothesis for difference between two proportions

1. Surveys were conducted in Katmandu and Pokhara to ascertain viewer’s habits regarding
Kantipur T.V. In Katmandu, 1,000 people were interviewed and 680 said they viewed
Kantipur T.V. In Pokhara 600 people were interviewed and 444 said they viewed
Kantipur T.V. Is there s significant difference between viewing habits in Katmandu and
Pokhara? Support your answer at 1% level of significance level.
2. Two different large groups of people are being considered as focus group for reading
English newspaper. Of 200 people surveyed in one group (the government employees),
52 percent read the English newspaper. In another group (private employees), 40 percent
of the 150 people surveyed read the English newspaper. At the 0.05 level of significance,
is there evidence to conclude that there is significantly higher percentage of government
employees who read English newspaper than do private employees?
3. A sample of 500 respondents was selected in a large metropolitan area to determine
various information concerning consumer behaviors. Among the question was, “Do you
enjoy shopping for clothing?” Of 240 males, 168 answered yes. Of 260 females, 220
answered yes. (a) is there evidence of significant difference between males and females
in the proportion that enjoy shopping for clothing at 0.01 level of significance? (b) Find
the p-value in (a), and interpret its meaning.
4. Are whites more likely than blacks to claims bias? A survey conducted by Barry
Goldman, found that of 56 white workers terminated, 29 claimed bias. Of 407 black
workers terminated, 126 claimed bias.
a) At the 0.05 level of significance, is there evidence that white workers are more likely to
claim likely to claim bias than black workers?
5. A survey of investors who have Internet access divided these into two groups, those who
trade online and those who do not (traditional traders). Of the traditional investors 48%
were bullish on the market, and of the online investors 69% were bullish on the market.
Suppose that the survey was based on 500 traditional investors and 500 online investors.
a) At the 0.05 level of significance, is there a significant difference between the proportion
of traditional and online investors who are bullish on the market?