Econ 3050 exam

Section A: Fill-in-the-Blank Questions

Question 1 (1 point)

Another name for alternative hypothesis is research hypotheses.

Question 1 options:

	True
	False

Question 2 (1 point)

In regression models, the independent variable is also called the explanatory or predictor variable

Question 2 options:

	True
	False

Question 3 (1 point)

When we reject a null hypothesis, we have proven the alternative hypothesis is true.

Question 3 options:

	True
	False

Question 4 (1 point)

As more variables are added to a regression model, the value of r² will always decrease.

Question 4 options:

	True
	False

Question 5 (1 point)

To use the Chi Square Distribution, the expected frequency of every cell must be less than 5

Question 5 options:

	True
	False

Question 6 (1 point)

In decision making, alternative are choices available to the decision maker.

Question 6 options:

	True
	False

Question 7 (1 point)

The proportion of variability in Y that is explained by the regression equation is called the coefficient of determination (R2).

Question 7 options:

	True
	False

Question 8 (1 point)

A t-test statistic is the value used to make a decision about the null hypothesis and is derived from a population parameter.

Question 8 options:

	True
	False

Question 9 (1 point)

Question 9 options:

The Maximin criteria is a(an) _____________ (optimistic/pessimistic) criteria.

Question 10 (1 point)

Question 10 options:

—————– (standard error/correlation coefficient) measure tells us the strength and direction of linear relationship between variables X and Y

Question 11 (1 point)

Question 11 options:

The ————- (maximax/maximin) criterion is used to find the alternative that maximizes the maximum payoff or consequence for every alternative.

Question 12 (1 point)

Question 12 options:

In regression analysis, dependent variables are sometimes called the __________ (explanatory/response) variables.

Question 13 (1 point)

Question 13 options:

If two variables were perfectly correlated, the correlation coefficient would be ————(greater than 1/exactly 1)

Question 14 (1 point)

Question 14 options:

Decision making under ————- (uncertainty/risk) is used when one has information about the probability of the various state of nature occurring.

Question 15 (1 point)

Question 15 options:

The options from which a decision maker chooses a course of action are called ———— (state of nature/ alternatives).

Section B: Multiple Choice Questions

Question 16 (1 point)

The mean absolute deviation (MAD) will always be

Question 16 options:

	Positive
	Negative
	Between 0 and 1
	None of the above

Question 17 (1 point)

When the smoothing constant α is high, we are giving weight to data.

Question 17 options:

	more, past
	less, recent
	same, all
	more, recent

Question 18 (1 point)

In a typical simple linear regression regression y = bo + b1X1. The descriptive interpretation of bo and b1 is:

Question 18 options:

	coefficient and intercept, respectively
	intercept and coefficient, respectively
	Both a) and b)
	None of the above

Question 19 (1 point)

Analysis of variance (ANOVA) is a statistical method of comparing the of several populations

Question 19 options:

	Means
	Variances
	Proportions
	None of the above

Question 20 (1 point)

Assume that the actual value for the month of January was 120, and the forecast for the month of January was 112. What is the forecast for the month of February if we used exponential smoothing with an α = 0.3? Use the formula Ft = Ft-1 + α(At-1 – Ft-1)

Question 20 options:

	122.4
	109.6
	114.1
	112

Question 21 (1 point)

Which of the following values of chi-square cannot occur?

Question 21 options:

	81
	100
	25
	-36

Question 22 (1 point)

	States of Nature
	State of Nature 1 (p = 0.40)	State of Nature 2 (p = 0.60)
Alternative 1	$1,000,000	$1,500,000
Alternative 2	($700,000)	$900,000

The Table above shows payoff matrix. The probability of State of Nature 1 is 0.4; that of State of Nature 2 is 0.6. If we were to make a decision based on maximizing Expected Monetary Value (EMV), we will receive:

Question 22 options:

	$1,300,000
	$260,000
	$1,500,000
	-$700,000

Question 23 (1 point)

The process of isolating linear trend and seasonal factors to develop more accurate forecasts is called:

Question 23 options:

	Multiple regression
	Decomposition
	Linearization
	All of the above

Question 24 (1 point)

If the coefficient of determination (R2) is equal to 1, then the correlation coefficient (r):

Question 24 options:

	Must also be equal to 1
	Can be either -1 or +1
	Can be any value between -1 and +1
	Must be -1

Question 25 (1 point)

The following linear trend expression was estimated using a time series with 17 time periods. Tt = 129.2 + 3.8t. The calculated trend projection for time period 18 (t = 18) is:

Question 25 options:

	68.4
	193.8
	197.6
	6.84

Question 26 (1 point)

Absolute Means	Absolute Means	Critical Range (CR)
|x̄1 – x̄2|	|87 – 77| = 6	9.65
|x̄1 – x̄3|	|83 – 73| = 10	10.43
|x̄2 – x̄3|	|83 – 66| = 17	9.65

In the table above are absolute differences in pairs of population means for x̄1 , x̄2 , and x̄3 and their associate critical ranges. Using the decision rule for comparing pairs of population means, which of the statements is correct?

Question 26 options:

	Population means of x̄1 and x̄2 are different.
	Population means of x̄1 and x̄3 are different.
	Population means of x̄2 and x̄3 are different.
	Neither of the above statements is correct.

Question 27 (1 point)

The Tukey-Kramer procedure is used for which of the following purposes?

Question 27 options:

	Test for normality
	Test for differences in pairwise means
	Test for independence of errors
	None of the above

Question 28 (1 point)

If the coefficient of determination (R2) is 0.81, the coefficient of correlation (r) is:

Question 28 options:

	Either -0.90 or 0.90
	0.66
	0.81
	None of the above

Question 29 (1 point)

What is NOT true about forecasting?

Question 29 options:

	It is based on the same underlying causal assumptions that prevailed in the past
	It uses different techniques
	It is always perfect
	All of the above

Question 30 (1 point)

The primary purpose of the mean absolute deviation (MAD) in forecasting is to:

Question 30 options:

	Estimate trend line
	Eliminate forecast errors
	Measure forecast accuracy
	Seasonally adjust the forecast

Question 31 (1 point)

When do you need to use dummy variables in multiple regression?

Question 31 options:

	When performing residual analysis
	When correcting for multicollinearity
	When categorical variables are used in the model
	All of the above

Question 32 (1 point)

Week	No. of Special Pizzas
1	25
2	23
3	20
4	22
5	23
6	24

The above Table shows the weekly demand for pizza. Using a 3-week moving average, what is the forecast demand for week 7?

Question 32 options:

	20
	21
	22
	23

Question 33 (1 point)

Week	No. of Special Pizzas
1	25
2	23
3	20
4	22
5	23
6	24

What is the weighted 4-week moving average? Assume that the weights are 0.75, 0.25, 0.15, and 0.10. (Hint: Apply the highest weight to the most recent week).

Question 33 options:

	23.24
	21.08
	26.35
	None of the above

Question 34 (1 point)

Which of the following could not represent a coefficient of determination (R2)?

Question 34 options:

	0.97
	0.45
	0.36
	-0.49

Question 35 (1 point)

An ECON 3050 Professor at the Tennessee State University claims that the average IQ of his students is more than120. However, a researcher believes that this average IQ is not correct. Construct the Ho and H1.

Question 35 options:

	Ho: µ = 120; and H1 µ ≠ 120
	Ho: µ ≥ 120; and H1: µ < 120
	Ho: µ ≤ 120; and H1: µ > 120
	Ho and H1 cannot be constructed

Question 36 (1 point)

Source	Sum of Squares	Degrees of Freedom	Mean Sum of Squares	F
Between	50	(b)	12.5	1.5625
Within	(c)	3	(a)
Total	74	7

Consider the above partially completed randomized block ANOVA summary Table. The mean sum of squares within (MSW) represented by (a) is:

Question 36 options:

	12.5
	8
	50
	None of the above

Question 37 (1 point)

Source	Sum of Squares	Degrees of Freedom	Mean Sum of Squares	F
Between	50	(b)	12.5	1.5625
Within	(c)	3	(a)
Total	74	7

Consider the above partially completed randomized block One-Way ANOVA summary Table. The degrees of freedom (df) represented by (b) is:

Question 37 options:

	4
	7
	3
	5

Question 38 (1 point)

Source	Sum of Squares	Degrees of Freedom	Mean Sum of Squares	F
Between	50	(b)	12.5	1.5625
Within	(c)	3	(a)
Total	74	7

Consider the above partially completed randomized block One-Way ANOVA summary Table. The sum of squares within (SSW) represented by (c) is:

Question 38 options:

	74
	50
	24
	12.5

Question 39 (1 point)

Time Period	Actual (A)	Forecast (F)	Absolute|F – A|
1	2	3	1
2	A2 = ?	4	–
3	6	5	1
4	4	6	2

The formula for calculating the mean absolute deviation (MAD) = ∑|At – Ft|/n. Given the data above, if MAD = 1.25, the actual demand in period 2 (A2) must have been:

Question 39 options:

	A2 = 3
	A2 = 5
	A2 = 4.5
	A2 = 3.5

Question 40 (1 point)

A forecasting model with α = 0.4 will respond more quickly to past changes in the data than a forecasting model with α = ______?

Question 40 options:

	0.2
	0.4
	0.5
	0.8

Section C: Calculation Questions

Choose only two out of three questions. Please do not do all the questions. If you do all three, I will only grade the first two!

Question 41 (5 points)

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.745027545
R Square	0.555066043
Adjusted R Square	0.471640926
Standard Error	3587.386821
Observations	20
ANOVA
	df	SS	MS	F	Significance F
Regression	3	256877169.5	85625723.18	6.653464374	0.003984131
Residual	16	205909507.3	12869344.2
Total	19	462786676.8
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	27616.14138	3777.691019	7.310322957	1.74999E-06	19607.79417	35624.48859	19607.79417	35624.48859
Mileage	-0.14339339	0.041499622	-3.455293899	0.003256964	-0.231368658	-0.055418122	-0.231368658	-0.055418122
Age of Car	-1020.969913	446.2836829	-2.287715084	0.036106422	-1967.049057	-74.89076862	-1967.049057	-74.89076862
Seller’s Age	21.11371598	73.95774463	0.285483503	0.77893643	-135.6696988	177.8971307	-135.6696988	177.8971307

The above Table shows multiple regression output. It provides the relationship between the dependent variable Car Prices (Y) and independent variables Mileage (X1), Age of the Car (X2), and Age of the Seller (X3). Using the ouput, answer the questions below.

a) Identify the values and coefficients for: (i) the intercept; (ii) mileage; (iii) car age; and (iv) seller’s age.

b) Using the information in a) above, construct a multiple regression equation.

c) Predict the price of a car when X1=40,000; X2=10, and X3=40

d) What can you say about the overall significance of the multiple regression equation? Support your answer?

e) Using the p-value, identify multiple regression coefficients that are significant. Why your answer?

Question 41 options:

Question 42 (5 points)

	Blood Pressure (Y)	Age (X1)	Weight (X2)	Body Surface Area (X3)	Duration (X4)	Pulse (X5)
Age (X1)	0.659
Weight (X2)	0.950	0.407
Body Sur. Area (X3)	0.866	0.378	0.875
Duration (X4)	0.293	0.344	0.201	0.131
Pulse (X5)	0.721	0.619	0.659	0.465	0.420
Stress (X6)	0.164	0.368	0.034	0.018	0.312	0.406

The above table shows correlation coefficients between blood pressure (Y) — as dependent variable, and 6 independent variables namely Age (X1), Weight (X2), Body Surface Area (X3), Duration (X4), Pulse (X5), and Stress (X6). It also depicts correlation coefficients between independent variables themselves.

a) Which independent variable shows the highest correlation coefficient with Blood Pressure (Y)?

b) Calculate the coefficient of determination (R2) for the independent variable you selected in a) above.

c) Which independent variable shows the lowest correlation coefficient with Blood Pressure (Y)?

d) Which independent variables show the highest chance of having the presence of multicollinearity?

e) Which independent variables shows the lowest chance of having the presence of multicollinearity?

Question 42 options:

Question 43 (5 points)

A Candy Manufacturing Company has been growing and having difficulty meeting the demand for its products. The Company has three choices to meet the demand. It can either move to a larger facility, add a second shift, or subcontract its production. The expected payoff for each combination of the different alternatives and state of demand are shown below.

Alternative	Demand Expands	Demand Holds Steady	Demand Declines
Move to Larger Facility	$350,000	$130,000	-$90,000
Add a Second Shift	$275,000	$90,000	-$40,000
Subcontract	$190,000	$20,000	-$20,000

a) Using the Maximax Criterion, what is the payoff?

b) Using the Maximin Criterion, show the payoff.

c) Using the Equally Likely Criterion, what is the average payoff?

d) Using the Minimax Regret Criterion, what is the payoff to minimize decision maker’s regret?

e) Calculate the payoff using the Hurwicz Criterion. Assume that α = 0.7 for highest payoffs, and 0.3 for lowest payoffs.

Question 43 options:

Submit Quiz0 of 43 questions