Problem 79E

The manufacturer of a machine to package soap powder claimed that her machine could load cartons at a given weight with a range of no more than .4 ounce. The mean and variance of a sample of eight 3-pound boxes were found to equal 3.1 and .018, respectively. Test the hypothesis that the variance of the population of weight measurements is σ 2 = .01 against the alternative that σ 2 > .01.

a Use an α = .05 level of significance. What assumptions are required for this test?

b What can be said about the attained significance level using a table in the appendix?

c Applet Exercise What can be said about the attained significance level using the appropriate applet?

EXAMPLE QUESTIONS CHAPTER 5 If the price of coffee increases by 20% and sales fall by 30% then what is the price elasticity of demand for coffee Ed = % change quantity demanded / % change in price Ed = 30%/ + 20% = |1.5| Suppose the price increase and quantity demanded decreases by some amount. We find that the elasticity value is 3. Which of the following accurately explains this value Ed = % change quantity demanded/ % change in price A. For every 1% increase in price, quantity demanded will decline by 3% B. For every 3% increase in price , quantity demanded will decline by 1% Answer: A. If prices were to change dramatically, and sales did not change much, what type of elasticity is this A) Inelastic B) Elastic C) Unitary elastic D) Perfectly e