FAKULTI EKONOMI DAN PERNIAGAAN

UNIVERSITI MALAYSIA SARAWAK

94300 Kota Samarahan
Sarawak
EBQ2024 STATISTICS FOR ECONOMICS AND BUSINESS
TUTORIAL 3

INSTRUCTIONS TO STUDENTS
Students are required to prepare solutions before coming to tutorial class. You may be
requested to submit your solutions to your Tutor in the class.

QUESTION
Section A (20 marks)
1. A random variable that can assume only a finite number of values is referred to as a(n)
a. infinite sequence
b. finite sequence
c. discrete random variable
d. discrete probability function

2. A measure of the average value of a random variable is called a(n)

a. variance
b. standard deviation
c. expected value
d. coefficient of variation

3. Variance is
a. a measure of the average, or central value of a random variable
b. a measure of the dispersion of a random variable
c. the square root of the standard deviation
d. the sum of the squared deviation of data elements from the mean

The number of electrical outages in a city varies from day to day. Assume that the number of
electrical outages (x) in the city has the following probability distribution.
x f(x)
0 0.8
1 0.15
2 0.04
3 0.01

4. The mean and the standard deviation for the number of electrical outages (respectively) are
a. 2.6 and 5.77
b. 0.26 and 0.577
c. 3 and 0.01
 d. 0 and 0.8

5. In the textile industry, a manufacturer is interested in the number of blemishes or flaws

occurring in each 100 feet of material. The probability distribution that has the greatest chance
of applying to this situation is the
a. normal distribution
b. binomial distribution
c. Poisson distribution
d. uniform distribution

6. Assume that you have a binomial experiment with p = 0.5 and a sample size of 100. The
expected value of this distribution is
a. 0.50
b. 0.30
c. 100
d. 50

7. A production process produces 2% defective parts. A sample of five parts from the production
process is selected. What is the probability that the sample contains exactly two defective
parts?
a. 0.0004
b. 0.0038
c. 0.10
d. 0.02

Exhibit 1
Recent crime reports indicate that 3.1 motor vehicle thefts occur each minute in the United
States. Assume that the distribution of thefts per minute can be approximated by the Poisson
probability distribution.

8. Refer to Exhibit 1, what is the probability exactly four thefts occur in a minute?
a. 0.0345
b. 0.1346
c. 0.1733
d. 0.0618

9. Refer to Exhibit 1, what is the probability there is less than 4 thefts in a minute?
a. 0.1847
b. 0.6249
c. 0.4012
d. 0.5799

10. Which of the following is not a characteristic of the normal probability distribution?
a. The mean, median, and the mode are equal
b. The mean of the distribution can be negative, zero, or positive
c. The distribution is symmetrical
 d. The standard deviation must be 1

11. The function that defines the probability distribution of a continuous random variable is a
a. normal function
b. uniform function
c. either normal of uniform depending on the situation
d. probability density function

12. Larger values of the standard deviation result in a normal curve that is
a. shifted to the right
b. shifted to the left
c. narrower and more peaked
d. wider and flatter

Exhibit 2
The probability distribution for the number of goals the Lions soccer team makes per game is
given below.

Number of Goals Probability

0 0.05
1 0.15
2 0.35
3 0.3
4 0.15

13. Refer to Exhibit 2, the expected number of goals per game is

a. 0
b. 1
c. 2, since it has the highest probability
d. 2.35

14. Refer to Exhibit 2, what is the probability that in a given game the Lions will score at least 1
goal?
a. 0.20
b. 0.55
c. 1.0
d. 0.95

15. Refer to Exhibit 2, what is the probability that in a given game the Lions will score less than
3 goals?
a. 0.85
b. 0.55
c. 0.45
d. 0.80
16. Refer to Exhibit 2, what is the probability that in a given game the Lions will score no goals?
a. 0.95
b. 0.05
c. 0.75
d. 0.60

17. Thirty-two percent of the students in a management class are graduate students. A random
sample of 5 students is selected. What is the probability that the sample contains exactly 2
graduate students?
a. 0.322
b. 0.386
c. 0.423
d. 0.246

18. Twenty percent of the students in a class of 100 are planning to go to graduate school. The
standard deviation of this binomial distribution is
a. 20
b. 16
c. 4
d. 2

19. The weight of an object is an example of

a. a continuous random variable
b. a discrete random variable
c. either a continuous or a discrete random variable, depending on the weight of the
object
d. either a continuous or a discrete random variable depending on the units of
measurement

20. The sales of Lexus automobiles in the Detroit area follow a mean of 3 per day. What is the
probability that for five consecutive days at least one Lexus is sold?
a. 0.7746
b. 0.0498
c. 0.9502
d. 0.4488

Section B (30 marks)

1. Only 0.02% of credit card holders of a company report the loss or theft of their credit cards
each month. The company has 15,000 credit cards in the city of Memphis. Use the Poisson
probability tables to answer the following questions. What is the probability that during the
next month in the city of Memphis (12 marks)

a. no one reports the loss or theft of his or her credit cards? (2 marks)
b. every credit card is lost or stolen? (2 marks)
c. six people report the loss or theft of their cards? (2 marks)
 d. at least nine people report the loss or theft of their cards? (2 marks)
e. Determine the expected number of reported lost or stolen credit cards. (2 marks)
f. Determine the standard deviation for the number of reported lost or stolen cards. (2 marks)

2. The management of a grocery store has kept a record of bad checks received per day for a
period of 200 days. The data are shown below. (11 marks)

Number of Bad
Number of Days
Checks Received
0 8
1 12
2 20
3 60
4 40
5 30
6 20
7 10

a. Develop a probability distribution for the above data. (2 marks)

b. Is the probability distribution that you found in Part a a proper probability
distribution? Explain. (1 mark)
c. What is the expected number of bad checks received per day? (1.5 marks)
d Determine the standard deviation in the number of bad check received per day. (2
marks)
e. Determine the cumulative probability distribution F(x). (1.5 marks)
f. What is the probability that in a given day the store receives four or less bad checks?
(1.5 marks)
g. What is the probability that in a given day the store receives more than 3 bad checks?
(1.5 marks)

3. The Ludlow Wildcats baseball team, a minor league team in the Cleveland Indians
organization, plays 70 percent of their games at night and 30 percent during the day. The
team wins 50 percent, they won yesterday. What is the probability the game was played at
night? (7 marks)