ECON 3050 exam

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Section A: Fill-in-the-Blank QuestionsQuestion 1 (1 point)Another name for alternative hypothesis is research hypotheses.Question 1 options:TrueFalseQuestion 2 (1 point)In regression models, the independent variable is also called the explanatory or predictor variableQuestion 2 options:TrueFalseQuestion 3 (1 point)When we reject a null hypothesis, we have proven the alternative hypothesis is true.Question 3 options:TrueFalseQuestion 4 (1 point)As more variables are added to a regression model, the value of r² will always decrease. Question 4 options:TrueFalseQuestion 5 (1 point)To use the Chi Square Distribution, the expected frequency of every cell must be less than 5Question 5 options:TrueFalseQuestion 6 (1 point)In decision making, alternative are choices available to the decision maker.Question 6 options:TrueFalseQuestion 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:TrueFalseQuestion 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:TrueFalseQuestion 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 YQuestion 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 QuestionsQuestion 16 (1 point)The mean absolute deviation (MAD) will always beQuestion 16 options:PositiveNegativeBetween 0 and 1None of the aboveQuestion 17 (1 point)When the smoothing constant α is high, we are giving weight to data.Question 17 options:more, pastless, recentsame, allmore, recentQuestion 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, respectivelyintercept and coefficient, respectivelyBoth a) and b)None of the aboveQuestion 19 (1 point)Analysis of variance (ANOVA) is a statistical method of comparing the of several populationsQuestion 19 options:MeansVariancesProportionsNone of the aboveQuestion 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:122.4109.6114.1112Question 21 (1 point)Which of the following values of chi-square cannot occur?Question 21 options:8110025-36Question 22 (1 point)States of NatureState of Nature 1 (p = 0.40)State of Nature 2(p = 0.60)Alternative 1$1,000,000$1,500,000Alternative 2($700,000)$900,000The 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-$700,000Question 23 (1 point)The process of isolating linear trend and seasonal factors to develop more accurate forecasts is called:Question 23 options:Multiple regressionDecompositionLinearizationAll of the aboveQuestion 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 1Can be either -1 or +1Can be any value between -1 and +1Must be -1Question 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:68.4193.8197.66.84Question 26 (1 point)Absolute MeansAbsolute MeansCritical Range (CR)|x̄1 – x̄2||87 – 77| = 69.65|x̄1 – x̄3||83 – 73| = 1010.43|x̄2 – x̄3||83 – 66| = 179.65In 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 normalityTest for differences in pairwise meansTest for independence of errorsNone of the aboveQuestion 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 0.900.660.81None of the aboveQuestion 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 pastIt uses different techniquesIt is always perfectAll of the aboveQuestion 30 (1 point)The primary purpose of the mean absolute deviation (MAD) in forecasting is to:Question 30 options:Estimate trend lineEliminate forecast errorsMeasure forecast accuracySeasonally adjust the forecastQuestion 31 (1 point)When do you need to use dummy variables in multiple regression?Question 31 options:When performing residual analysisWhen correcting for multicollinearityWhen categorical variables are used in the modelAll of the aboveQuestion 32 (1 point)WeekNo. of Special Pizzas125223320422523624The 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:20212223Question 33 (1 point)WeekNo. of Special Pizzas125223320422523624What 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:23.2421.0826.35None of the aboveQuestion 34 (1 point)Which of the following could not represent a coefficient of determination (R2)?Question 34 options:0.970.450.36-0.49Question 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 ≠ 120Ho: µ ≥ 120; and H1: µ < 120Ho: µ ≤ 120; and H1: µ > 120Ho and H1 cannot be constructedQuestion 36 (1 point)SourceSum ofSquaresDegrees of FreedomMean Sum of SquaresFBetween50(b)12.51.5625Within(c)3(a)Total747Consider the above partially completed randomized block ANOVA summary Table. The mean sum of squares within (MSW) represented by (a) is:Question 36 options:12.5850None of the aboveQuestion 37 (1 point)SourceSum ofSquaresDegrees of FreedomMean Sum of SquaresFBetween50(b)12.51.5625Within(c)3(a)Total747Consider the above partially completed randomized block One-Way ANOVA summary Table. The degrees of freedom (df) represented by (b) is:Question 37 options:4735Question 38 (1 point)SourceSum ofSquaresDegrees of FreedomMean Sum of SquaresFBetween50(b)12.51.5625Within(c)3(a)Total747Consider the above partially completed randomized block One-Way ANOVA summary Table. The sum of squares within (SSW) represented by (c) is:Question 38 options:74502412.5Question 39 (1 point)Time PeriodActual (A)Forecast (F)Absolute|F – A|12312A2 = ?4-36514462The 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 = 3A2 = 5A2 = 4.5A2 = 3.5Question 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:0.20.40.50.8Section C: Calculation QuestionsChoose 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 OUTPUTRegression StatisticsMultiple R0.745027545R Square0.555066043Adjusted R Square0.471640926Standard Error3587.386821Observations20ANOVAdfSSMSFSignificance FRegression3256877169.585625723.186.6534643740.003984131Residual16205909507.312869344.2Total19462786676.8CoefficientsStandard Errort StatP-valueLower 95%Upper 95%Lower 95.0%Upper 95.0%Intercept27616.141383777.6910197.3103229571.74999E-0619607.7941735624.4885919607.7941735624.48859Mileage-0.143393390.041499622-3.4552938990.003256964-0.231368658-0.055418122-0.231368658-0.055418122Age of Car-1020.969913446.2836829-2.2877150840.036106422-1967.049057-74.89076862-1967.049057-74.89076862Seller’s Age21.1137159873.957744630.2854835030.77893643-135.6696988177.8971307-135.6696988177.8971307The 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=40d) 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)0.659Weight (X2)0.9500.407Body Sur. Area (X3)0.8660.3780.875Duration (X4)0.2930.3440.2010.131Pulse (X5)0.7210.6190.6590.4650.420Stress (X6)0.1640.3680.0340.0180.3120.406The 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.AlternativeDemandExpandsDemandHolds SteadyDemandDeclinesMove to Larger Facility$350,000$130,000-$90,000Add a Second Shift$275,000$90,000-$40,000Subcontract$190,000$20,000-$20,000a) 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