1. New Generation Innovation, Inc. Student Coaching Slides

2. Question 1A & 1B: Histogram
See Gateway web site for Excel steps
Use tools/data analysis/histogram
What proportion of Mountainia citizens have disposable incomes > $1000 per month? Approximate answer is ok here.

3. Question 1C: Sample statistics
See web site for Excel steps
Use tools/data analysis/descriptive statistics/summary statistics
Mean: first line
Standard deviation: fifth line

4. Question 1D: Hypothesis Testing
Step 1: Ho: Null hypothesis = Mountainia’s claim
Step 2: H1 or Ha: Alternative hypothesis = Desertia’s claim
(a) If Desertia wins the debate only when the population mean is less than $1000, H1 should be one-tail
(b) Otherwise, H1 should be two-tail

5. Hypothesis Testing (continued)
Step 3: Critical Value
(a) Determine which statistical table to use
(b) If H1 is one-tail, put .05 in tail; if H1 is 2-tail, put .025 in each tail
Step 4: Test Statistic = Sample Statistic
(a) Use sample mean and standard deviation from Question 1c
(b) Use standard error of the mean

6. Hypothesis Testing (continued)
Step 5: Conclusion
(a) If sample statistic (absolute value) exceeds critical value, reject Ho
(b) Otherwise, do not reject Ho

7. Question 2A: Income Variation
Standard deviation measures variation
If standard deviation = 0, no variation, so each person has same income
High standard deviation implies high variation

8. Question 2B: Poverty Level
Use Z table (normal area table)
Use standard deviation, NOT standard error since this is not a sampling distribution problem
Question 2B has 2 calculations, one for Mountainia and the other for Desertia

9. Question 2B: Skewed Distribution
If mean > median, distribution is skewed
Do you think mean > median for income?
Use normal table only if distribution is bell shaped
Bell shaped only if symmetric
Symmetric only if not skewed

10. Question 3: Hypothesis Testing
Ho: Population proportion = 1/3 (Amnesty International‘s claim)
Normal approximation to binomial
H1 is one-tail if Minister of Commerce wins debate only when proportion is less than 1/3. Otherwise, it is two-tail
Sample proportion = number of political prisoners/sample size

11. Questions 4 and 5: Factors Determining GDP/Capita
Physical Capital
Human Capital
Level of Technology
Efficiency

12. Question 5: Ethical Considerations
Who benefits and who loses from the firm’s decision?
Who does the firm have a responsibility to?
What are those responsibilities?