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Econ 234: Economic Statistics Ii Question Paper
Econ 234: Economic Statistics Ii
Course:Bachelor Of Science In Economics And Statistics
Institution: Egerton University question papers
Exam Year:2015
UNIVERSITY EXAMINATIONS
REGULAR-NJORO CAMPUS
SECOND SEMESTER , 2014/2015 ACADEMIC YEAR
SECOND YEAR EXAMINATION FOR THE DEGREE OF BSC IN ECONOMICS AND STATISTICS,
AGRICULTURAL ECONOMICS, BACHELOR OF ARTS, ECONOMICS AND SOCIOLOGY AND ECONOMICS
AND HISTORY
ECON 234:ECONOMIC STATISTICS II TIME: 2HRS
STREAM:BA, ECON-STAT, ECON-HIST, ECON-SOC
EXAMINATION SESSION:MAY YEAR: 2015
INSTRUCTIONS
1) Question ONE is compulsory. Answer THREE questions in total
2) Question one carries 30 marks while other questions carry 20 marks each
3) Illustrate where possible.
QUESTION ONE (30 MARKS)
a) An advertising company estimates, historically its monthly sales to have averaged Ksh 36 million per depot with a standard deviation of Ksh 10 million. As a result of a marketing campaign, a random sample of 35 depots were taken this year and gave mean sales of Ksh 40 million. Test if the company has significantly gained sales. (5 marks)
b) Explain and demonstrate the classical assumption of the OLS method. (6 marks)
c) Given the following data on output and the amounts the firm has spent for six years as
Output Cost
0 100
5 150
8 160
10 240
15 230
23 370
25 410
i) Compute the least squares regression line/cost function (6 marks)
ii) Interpret the meaning of the function ( 2 marks)
iii) Calculate and interpret the overall explanatory power of the function (3 marks)
iv) Calculate the standard error of ß1 (3 marks)
v) Test for the significance of ß1 (5 marks)
QUESTION TWO (20 MARKS)
a) Explain the characteristics of t- distribution (3 marks)
b) Assume that workers in a small firm where you are the chief statistician have been complaining that similar firms pay higher than what your firm pays and this has pushed a morale down besides increasing the rate of labour turnover. As a practitioner, you have decided to establish statistically whether indeed there is a significant difference in the pay level. Taking samples of six workers from each firm and their respective net pay, the data below was generated.
Firm A 9.5 12.5 10.5 9.9 12.0 15.8
Firm B 8.8 12.0 11.1 8.9 11.5 16.2
i) Using suitable parametric method, determine whether there was any significant difference in the pay based on the results obtained from the two firms at 10% level of significance. (11 marks)
ii) Using a suitable non-parametic method, determine whether there was any significant difference in the results obtained from the two firms at 10% level of significance.
QUESTION THREE( 20 MARKS)
a) Explain what you understand by the sampling distribution of the mean (3 marks)
b) Consider that you have five products in the market. The new strategy is to market all the products taking three at each proportional tour to minimize costs of marketing. If the cost of product promotion is as follows;
Product Cost
A 2000
B 3000
C 3000
D 4000
E 1000
i) Generate sampling distribution of the mean (7 marks)
ii) Find the mean of the distribution (3 marks)
c) Assume that the study on labour turnover yielded the following cross tabulated data;
Secondary College Tertiary
Changed jobs 350 500 520
No changed in jobs 750 500 180
Test whether the level of education is associated with labour turnover.
(7 marks)
QUESTION FOUR (20 MARKS)
a) Distinguish between parametric and non-parametric tests (2 marks)
b) The proprietor of Lowland hospital in Nakuru town has been concerned about the loss of customers to his hospital. He luckily got some clandestine information that most patients prefer Highland hospital as opposed to his. He consequently decided to construct a private researcher who sent out 145 questionnaires to the patients and received the following .
Reasons for preference Highland Hospital Lowland hospital
Location 32 8
Quality of service 12 2
Cleanliness 13 3
Personal attention 56 35
Mechanised service 11 13
Staff appearence 6 9
Assuming that the researcher permits a 5% error, test whether the reasons given for hospital preference are related to the choice of the hospital. (8 marks)
c) The manager of Trans-National Bank in Nakuru thinks that customers who operate current accounts save on average as much as customers who operate savings account. A first random sample of 10 customers who operate current account is taken and its mean found to be 440. In the other sample of 8 customers operating savings account had mean of 400. Assuming the respective standard deviation are 60 and 70, is there any difference between the two categories of account operators? (6 marks)
d) Distinguish between Permutation and Combination (2 marks)
e) A consumer is requested to rank in order of preference the taste of seven brands. If she indifferent among these brands, what is the probability that an individual who is truly indifferent will select a specific ordering of four brands?
QUESTION FIVE (20 MARKS)
a) Periodically , Merril-Lynch are asked to evaluate Merril-Lynch Financial consultants and services (2010 Merril-Lynch Client Satisfaction Survey). Higher ratings on the Clients Satisfactory Survey indicates better service with 7 the maximum service rating. Independent samples of service ratings for two financial consultants are summarized below. Consultant A has 10 years of experience whereas consultant B has 1 year experience.
Consultant A Consultant B
X1=6.82 X2=6.25
S1=0.64 S2=0.75
n1=16 n2 =10
Test whether the consultant with more experience has the higher population mean rating
(6 marks)
b) 1)Under what circumstance is the Chi-square statistic used?
3 marks)
2)Genetic theory states that children having one parent of blood type A and the other blood type B will always be one of the three types: A,AB,B and that the proportion of the three types will on average be as :1:2:1. A report states that out of 300 children having one A parent and B parent, 30% were found to be type A , 45% type AB and the remainder type B. using the Chi-square statistic, test whether the data supports this genetic theory. (7 marks)
c) Suppose five students have the following grades in two courses:
Statistics Theory
85 93
60 80
73 65
40 50
90 75
Calculate and interpret the rank correlation coefficient. (4 marks)
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