Question

You have been hired to test whether the demand for a product that your client produces varies between two demographic markets – the Urban and Rural markets.

As such, in each market, you run a short survey that gauges customers demand for your product and assigns them to one of three categories – (i) High (ii) Medium or (iii) Low.

You survey 70 people in the “Urban” market and find that their demand falls into the following “buckets”

High                32

Medium         20

Low                 18

You survey 30 people in the “Rural” market time. Their demand for the product its reflected below.

High                  8

Medium           10

Low                   12

The Null hypothesis that you are asked to test is that "the demand for the product is INDEPENDENT of the whether the market is Urban or Rural".

1. Under this null hypothesis, what is the EXPECTED NUMBER OF PEOPLE THAT WILL ANSWER "HIGH" in the URBAN Market?

Question 1 options:

	28
	20
	22
	16
	26
	32
	30
	24
	21
	18

2. Under this null hypothesis, what is the EXPECTED NUMBER OF PEOPLE THAT WILL ANSWER "LOW" in the RURAL Market?

Question 2 options:

	16
	22
	14
	21
	12
	17
	4
	9
	5
	15

3. CALCULATE THE TEST STATISTIC FOR THE NULL HYPOTHESIS ABOVE

Enter the answer below as a number with two significant decimal places (such as 8.94 or 2.34 or 213.45)

4. For the hypothesis and date above, what is the correct number of degrees of freedom for the Chi-Square distribution?

Question 4 options:

	30
	2
	10
	3
	4
	32
	9
	6
	70
	5
	1
	50
	12

5. Assuming that you can tolerate no more than a 5% probability of a Type I error ("p" no larger than 0.05), what is the critical value for the Chi-Square test of the above hypothesis?

Question 5 options:

	5.024
	3.841
	6.251
	7.815
	7.378
	2.833
	2.706
	1.696
	11.143
	5.991
	2.204

6. Using the critical values for the 5% and 1% levels of the Chi-Square Distribution from your text, which of the following statements is true

Question 6 options:

	We cannot reject the null hypothesis at the 5% or 1% level
	We can reject the null hypothesis at the 5% level.
	We can reject the null hypothesis at the 1% level.
	We can reject the null hypothesis at both the 5% and the 1% levels.

Answer 1