Economics 302 Quiz #1 - Colgate University



Economics 302 Quiz #2

Professor Meyer Fall 1999

Name: _______________________________

1. A manufacturer of window frames knows from long experience that 5 percent of the production will have some type of minor defect that will require a slight adjustment. (12 points)

a. What is the appropriate probability distribution for the number of defective frames in a random sample of 20 frames? Defend your answer.

The appropriate probability distribution is a binomial distribution with n=20 and p=.05. You can view the outcome as a series of independent Bernoulli trials, each of which have an identical probability of success (.05). The number of successes is distributed as a binomial random variable.

b. What is the probability that in a sample of 20 window frames, none will need adjustment?

P(X=0) = .3585

c. What is the probability that in a sample of 20 window frames, more than 2 will need adjustment?

P(X>2) = 1-P(X(2) = 1-.9245 = .0755

2. Assume that Z is a standard normal random variable. (12 points)

a. What is the probability that Z is less than –1.4?

P(Z ................
................

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