Applied Statistics in Business and Economics David Doane 6th Edition Test Bank.

Applied Statistics in Business and Economics, 6e (Doane) Chapter 1 Overview of Statistics 1) Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data. Answer: TRUE Explanation: This is one of many good definitions of statistics. Difficulty: 1 Easy Topic: 01.01 What Is Statistics? Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Inferential statistics refers to generalizing from a sample to a population, estimating unknown parameters, drawing conclusions, and making decisions. Answer: TRUE Explanation: We can use statistics either to describe data or to infer something about a population. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Descriptive statistics refers to summarizing data rather than generalizing about the population. Answer: TRUE Explanation: When we do not infer, we are only describing the available sample data. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 4) Estimating parameters and testing hypotheses are important aspects of descriptive statistics. Answer: FALSE Explanation: When we generalize to a population, we are using inferential statistics. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Inconsistent treatment of data by a researcher is a symptom of poor survey or research design. Answer: FALSE Explanation: Good survey data can still be misused or misinterpreted. Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Empirical data are collected through observations and/or experiments. Answer: TRUE Explanation: Empirical data are contrasted with <i>a priori</i> estimates (e.g., expecting 10 heads in 20 coin flips). Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 7) Business intelligence refers to collecting, storing, accessing, and analyzing data on the company's operations in order to make better business decisions. Answer: TRUE Explanation: See Wikipedia for similar definitions of business intelligence. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 2 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 8) When a statistician omits data contrary to her findings in a study, she is justified as long as the sample supports her objective. Answer: FALSE Explanation: We do not omit data unless it is proven to be an error. Difficulty: 2 Medium Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 9) A strong correlation between A and B would imply that B is caused by A. Answer: FALSE Explanation: Temporal sequence does not prove causation. Difficulty: 1 Easy Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 10) The post hoc fallacy says that when B follows A then B is caused by A. Answer: TRUE Explanation: Temporal sequence does not prove causation. Difficulty: 1 Easy Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 11) A statistical test may be significant yet have no practical importance. Answer: TRUE Explanation: Large samples sometimes reveal tiny effects that may not matter very much. Difficulty: 1 Easy Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 12) Valid statistical inferences cannot be made when sample sizes are small. Answer: FALSE Explanation: Small samples may be all that we have, and statistics does have rules for them. Difficulty: 2 Medium Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 13) Statistics is an essential part of critical thinking because it allows us to transform the empirical evidence from a sample so it will agree with our preferred conclusions. Answer: FALSE Explanation: Ethical analysts challenge their beliefs with data rather than forcing data to fit their beliefs. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 14) Statistical challenges include imperfect data, practical constraints, and ethical dilemmas. Answer: TRUE Explanation: The list is longer, but these three are big challenges. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 15) A business data analyst needs a Ph.D. in statistics. Answer: FALSE Explanation: Every business person does some statistics. Difficulty: 1 Easy Topic: 01.02 Why Study Statistics? Learning Objective: 01-02 List reasons for a business student to study statistics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 16) The science of statistics tells us whether the sample evidence is convincing. Answer: TRUE Explanation: There are clear scientific rules for statistical inference. Difficulty: 1 Easy Topic: 01.01 What Is Statistics? Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Pitfalls to consider in a statistical test include nonrandom samples, small sample size, and lack of causal links. Answer: TRUE Explanation: These are among many other pitfalls. Difficulty: 1 Easy Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 18) In business communication, a table of numbers is preferred to a graph because it is more able to convey meaning. Answer: FALSE Explanation: Although tables can show exact numbers, a good graph may be more helpful. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-03 Explain the uses of statistics in business. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Statistical data analysis can often distinguish between real versus perceived ethical issues. Answer: TRUE Explanation: Proper framing of a question may reveal that there is no real ethical issue. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 5 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 20) Excel has limited use in business because advanced statistical software is widely available. Answer: FALSE Explanation: Small businesses may lack advanced software (and the training to use it). Difficulty: 1 Easy Topic: 01.01 What Is Statistics? Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 21) Statistics helps surmount language barriers to solve problems in multinational businesses. Answer: TRUE Explanation: Statistics is part of the international language of science. Difficulty: 1 Easy Topic: 01.02 Why Study Statistics? Learning Objective: 01-02 List reasons for a business student to study statistics. Bloom's: Remember AACSB: Diversity Accessibility: Keyboard Navigation 22) Statistics can help you handle either too little or too much information. Answer: TRUE Explanation: Statistical tasks include sampling to obtain more information or finding meaning in large piles of data. <b> </b> Difficulty: 1 Easy Topic: 01.02 Why Study Statistics? Learning Objective: 01-02 List reasons for a business student to study statistics. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 23) Predicting a presidential candidate's percentage of the statewide vote from a sample of 800 voters would be an example of inferential statistics. Answer: TRUE Explanation: Generalizing from a sample is an <i>inference</i>. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 24) Surveying electric vehicle owners would provide a representative random sample of Americans' views on global warming policies. Answer: FALSE Explanation: They are not a random sample of all Americans. Difficulty: 1 Easy Topic: 01.05 Critical Thinking Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 25) An example of descriptive statistics would be reporting the percentage of students in your accounting class that attended the review session for the last exam. Answer: TRUE Explanation: As long as you do not generalize, it is a descriptive statistic. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) "Bob must be rich. He's a lawyer, and lawyers make lots of money." This statement best illustrates which fallacy? A) Using poor survey methods B) Confusing significance with importance C) Unconscious bias D) Generalizing from an average to an individual Answer: D Explanation: Many lawyers do not work for big firms. (Remember My Cousin Vinnie?) Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 7 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 27) Which is not an ethical obligation of a statistician? A) To know and follow accepted procedures B) To ensure data integrity and accurate calculations C) To support client wishes in drawing conclusions from the data D) To acknowledge sources of financial support Answer: C Explanation: The analyst must sometimes present findings that the client does not like. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 28) Which of the following statements is correct? A) A parameter is a measure that is calculated from a sample. B) Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data. C) For day-to-day business data analysis, most firms rely on a large staff of expert statisticians. D) A statistical test result that is significant also has practical importance. Answer: B Explanation: A parameter is a population characteristic. Firms often lack professional statisticians on staff, so all business graduates need some degree of statistical training to handle day-to-day problems. Sometimes an effect, while not due to chance, is too small to matter. Difficulty: 2 Medium Topic: 01.01 What Is Statistics? Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) Which is least likely to be an application where statistics will be useful? A) Predicting whether an airfare is likely to rise or fall B) Designing the most desirable features for a ski pass C) Deciding whether offering Rice Krispies improves restaurant sales D) Choosing the wording of a corporate policy prohibiting smoking Answer: D Explanation: Policy wording is probably left up to writers, not statisticians. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-02 List reasons for a business student to study statistics. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 30) Because 25 percent of the students in my morning statistics class watch eight or more hours of television a week, I conclude that 25 percent of all students at the university watch eight or more hours of television a week. The most important logical weakness of this conclusion would be A) relying on a sample instead of surveying every student. B) using a sample that may not be representative of all students. C) failing to correct for unconscious interviewer bias. D) assuming cause and effect where none exists. Answer: B Explanation: Generalizing from a nonrandom sample is risky. The morning class may not be representative of all students. Difficulty: 3 Hard Topic: 01.05 Critical Thinking Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 31) Which of the following is not a characteristic of an ideal statistician? A) Technically current (e.g., software) B) Communicates well (both written and oral) C) Advocates client's objectives D) Can deal with imperfect information Answer: C Explanation: There is an unattractive name for a consultant who always agrees with the client. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-03 Explain the uses of statistics in business. Bloom's: Remember AACSB: Ethics Accessibility: Keyboard Navigation 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 32) Which of the following statements is not true? A) Statistics helps refine theories through ongoing hypothesis testing. B) Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data. C) Estimating parameters is an important aspect of descriptive statistics. D) Statistical challenges include imperfect data and practical constraints. Answer: C Explanation: Estimating a population parameter is an inference rather than a description. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) Which is not a practical constraint facing the business researcher or data analyst? A) Time and money are always limited. B) The world is no laboratory, so some experiments are impractical. C) Research on human subjects is fraught with danger and ethical issues. D) Survey respondents usually will tell the truth if well compensated. Answer: D Explanation: Paid respondents may try to tell you what you want to hear. Difficulty: 2 Medium Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 34) Which is not an essential characteristic of a good business data analyst? A) Effective writer B) Stays current on techniques C) Has a Ph.D. or master's degree in statistics D) Can deal with imperfect information Answer: C Explanation: No advanced degree is required for ordinary data analysis, which is why all business students study it. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-03 Explain the uses of statistics in business. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 35) An ethical statistical consultant would not always A) follow accepted statistical procedures. B) support management's desired conclusions. C) acknowledge sources of financial support. D) report limitations of the data. Answer: B Explanation: There is a nasty name for a consultant who always agrees with management. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 36) GM's experience with ignition switches suggests that A) statistics is not applicable to automotive manufacturing. B) limited data may still contain important clues. C) good engineers can eliminate all risks. D) ignition switches are inherently dangerous. Answer: B Explanation: When small samples are all that we have, we must study them carefully, especially when the consequences are extreme (e.g., car crashes). Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 37) Which is not a goal of the ethical data analyst? A) To be an honest broker of data. B) To learn to downplay inconvenient data. C) To understand the firm's code of ethics (or help create one). D) To look for hidden agendas in data collection. Answer: B Explanation: We do not ignore data unless it is an actual error. Difficulty: 2 Medium Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Remember AACSB: Ethics Accessibility: Keyboard Navigation 11 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 38) Which of the following statements is not true? A) A statistic is a single measure (usually numerical) that is calculated from a sample. B) Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data. C) For day-to-day business data analysis, most firms rely on a large staff of expert statisticians. D) A statistical test may be significant yet have no practical importance. Answer: C Explanation: Few firms have staffs of statistics experts, so all of us need to know the basics. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) "Smoking is not harmful. My Aunt Harriet smoked, but lived to age 90." This best illustrates which fallacy? A) Unconscious bias B) Significance versus practical importance C) Post hoc reasoning D) Small sample generalization Answer: D Explanation: Individual cases sometimes deviate from the average. Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 40) Which best illustrates the distinction between statistical significance and practical importance? A) "In 2016, 240 out of 400 statistics students at Oxnard Technical College sold their textbooks at the end of the semester, compared with 220 out of 330 students in 2015, a significant decrease." B) "Our new manufacturing technique has increased the life of the 80 GB USB AsimoDrive external hard disk significantly, from 240,000 hours to 250,000 hours." C) "In 50,000 births, the new vaccine reduced the incidence of infant mortality in Morrovia significantly from 14.2 deaths per 1000 births to 10.3 deaths per 1000 births." D) "The new Sky Penetrator IV business jet's cruising range has increased significantly from 3,975 miles to 4,000 miles." Answer: B Explanation: Consumers would not notice because 240,000 hours is approximately 27 years. Difficulty: 3 Hard Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Evaluate AACSB: Reflective Thinking Accessibility: Keyboard Navigation 41) "Circulation fell in the month after the new editor took over the newspaper Oxnard News Herald. The new editor should be fired." Which is not a serious fallacy in this conclusion? A) Generalizing from a small sample B) Applying post hoc reasoning C) Failing to identify causes D) Using a biased sample Answer: D Explanation: There is no apparent bias here, just a shaky inference from a small sample with no apparent causal link. Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Evaluate AACSB: Reflective Thinking Accessibility: Keyboard Navigation 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 42) An ethical data analyst would be least likely to A) check data for accuracy. B) cite his/her data sources and their limitations. C) acknowledge sources of financial support. D) rely on consultants for all calculations. Answer: D Explanation: When you farm out your calculations, you have lost control of your work. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 43) "Tom's SUV rolled over. SUVs are dangerous." This best illustrates which fallacy? A) Unconscious bias B) Significance versus practical importance C) Post hoc reasoning D) Small sample generalization Answer: D Explanation: One instance proves little. Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 44) "Bob didn't wear his lucky T-shirt to class, so he failed his chemistry exam." This best illustrates which fallacy? A) Small sample generalization B) Poor survey methods C) Post hoc reasoning D) More than one of the above Answer: C Explanation: There is no credible causal link between these two events. Difficulty: 2 Medium Topic: 01.05 Critical Thinking Learning Objective: 01-05 List and explain common statistical pitfalls. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 14 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 45) Which is not a reason for an average student to study statistics? A) Improve technical writing skills B) Gain information management skills C) Enhance technical literacy D) Learn stock market strategies Answer: D Explanation: Statistics helps improve writing and technical literacy, but to learn about the stock market, you should probably study finance. Difficulty: 1 Easy Topic: 01.02 Why Study Statistics? Learning Objective: 01-02 List reasons for a business student to study statistics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 46) Which is not a likely area of application of statistics in business? A) Auditing supplier invoices for correct payment B) Questioning the executives' strategic decisions C) Looking for patterns in a large marketing database D) Making forecasts of several key product lines Answer: B Explanation: Business strategy may involve statistics, but not as much as the others listed here. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-03 Explain the uses of statistics in business. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) Which is not a likely task of descriptive statistics? A) Summarizing a sample B) Describing data numerically C) Estimating unknown parameters D) Making visual displays of data Answer: C Explanation: Estimating a population parameter is an inference. Difficulty: 2 Medium Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 48) We would associate the term inferential statistics with which task? A) Making visual displays of data B) Estimating unknown parameters C) Describing a sample of data D) Tabulating a survey Answer: B Explanation: Estimating a population parameter is an inference. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-01 Define statistics and explain some of its uses. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) A good data analyst A) removes data if so instructed by client. B) works alone to avoid team conflicts. C) communicates with numbers rather than with graphs. D) reports findings that may contradict client's ideas. Answer: D Explanation: Analysts study all the data, work on teams, and use charts to clarify all findings. Difficulty: 1 Easy Topic: 01.04 Statistical Challenges Learning Objective: 01-04 State the common challenges facing business professionals using statistics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) Which is not an analytical method commonly used to improve business decisions? A) Descriptive analytics. B) Predictive analytics. C) Prescriptive analytics. D) Reactive analytics. Answer: D Explanation: See Minicase 1.1 Using Analytics to Improve Business. Difficulty: 1 Easy Topic: 01.03 Statistics in Business Learning Objective: 01-03 Explain the uses of statistics in business. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Applied Statistics in Business and Economics, 6e (Doane) Chapter 2 Data Collection 1) Categorical data have values that are described by words rather than numbers. Answer: TRUE Explanation: Categories are nominal data but may sometimes also be ranked (e.g., sophomore, junior, senior). Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Numerical data can be either discrete or continuous. Answer: TRUE Explanation: Numerical data can be counts (e.g., cars owned) or continuous measures (e.g., height). Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Categorical data are also referred to as nominal or qualitative data. Answer: TRUE Explanation: Categories are nominal data (nonnumerical), sometimes called qualitative data. Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 4) The number of checks processed at a bank in a day is an example of categorical data. Answer: FALSE Explanation: Integers are numerical data. Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) The number of planes per day that land at an airport is an example of discrete data. Answer: TRUE Explanation: Integers are discrete numerical data. Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The weight of a bag of dog food is an example of discrete data. Answer: FALSE Explanation: Weight is measured on a continuous scale. Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 7) In last year's annual report, Thompson Distributors indicated that it had 12 regional warehouses. This is an example of ordinal level data. Answer: FALSE Explanation: "Number of" is ratio data because a zero exists. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 8) Nominal data refer to data that can be ordered in a natural way. Answer: FALSE Explanation: Nominal (categorical) data would be called ordinal only if categories can be ranked. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) This year, Oxnard University produced two football All-Americans. This is an example of continuous data. Answer: FALSE Explanation: The "number of" anything is discrete. Difficulty: 1 Easy Topic: 02.01 Variables and Data Learning Objective: 02-02 Explain the difference between numerical and categorical data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10) The type of statistical test that we can perform is independent of the level of measurement of the variable of interest. Answer: FALSE Explanation: Some statistical operations are restricted unless you have ratio or interval data. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Your weight recorded at your annual physical would not be ratio data, because you cannot have zero weight. Answer: FALSE Explanation: Zero is only a reference point, not necessarily an observable data value. Difficulty: 2 Medium Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 12) The level of measurement for categorical data is nominal. Answer: TRUE Explanation: Categorical and nominal are equivalent terms. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 13) Temperature measured in degrees Fahrenheit is an example of interval data. Answer: TRUE Explanation: For temperature, scale distances are meaningful (20 to 25 is the same as 50 to 55 degrees), and 0 degrees Fahrenheit does not mean the absence of heat, so it is not a ratio measurement. Difficulty: 2 Medium Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) The closing price of a stock is an example of ratio data. Answer: TRUE Explanation: True zero exists as a reference point, whether or not it is observed. Difficulty: 2 Medium Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) The Statistical Abstract of the United States is a huge annual compendium of data for the United States, and it is available online free of charge. Answer: FALSE Explanation: In 2012 the U.S. Census Bureau ceased publishing this free compendium of data, but students can buy it for $199 from a private publisher. Difficulty: 1 Easy Topic: 02.05 Data Sources Learning Objective: 02-08 Find everyday print or electronic data sources. Bloom's: Remember AACSB: Technology 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Accessibility: Keyboard Navigation 16) Ordinal data can be treated as if it were nominal data but not vice versa. Answer: TRUE Explanation: You can always go back to a lower level of measurement (but not vice versa). Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Responses on a seven-point Likert scale are usually treated as ratio data. Answer: FALSE Explanation: No true zero point exists on a Likert scale. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) Likert scales are especially important in opinion polls and marketing surveys. Answer: TRUE Explanation: Likert scales are used in all kinds of surveys. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-05 Recognize a Likert scale and know how to use it. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) Ordinal data are data that can be ranked based on some natural characteristic of the items. Answer: TRUE Explanation: For example, the eras Jurassic, Paleozoic, and Mesozoic can be ranked in time. Difficulty: 1 Easy Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 20) Ratio data are distinguished from interval data by the presence of a zero reference point. Answer: TRUE Explanation: The true zero is a reference that need not be observable. Difficulty: 2 Medium Topic: 02.02 Level of Measurement Learning Objective: 02-04 Recognize levels of measurement in data and ways of coding data. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) It is better to attempt a census of a large population instead of relying on a sample. Answer: FALSE Explanation: A census may flounder on cost and time, while samples can be quick and accurate. Difficulty: 2 Medium Topic: 02.03 Sampling Concepts Learning Objective: 02-06 Use the correct terminology for samples and populations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 22) Judgment sampling and convenience sampling are nonrandom sampling techniques. Answer: TRUE Explanation: To be random, every item must have the same chance of being chosen. Difficulty: 1 Easy Topic: 02.04 Sampling Methods Learning Objective: 02-07 Explain the common sampling methods and how to implement them. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) A problem with judgment sampling is that the sample may not reflect the population. Answer: TRUE Explanation: While better than mere convenience, judgment may still have flaws. Difficulty: 1 Easy Topic: 02.04 Sampling Methods Learning Objective: 02-07 Explain the common sampling methods and how to implement them. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation