A Newspaper Is Conducting a Statewide Survey Concerning the Race

question 44

Multiple Choice

A newspaper is conducting a statewide survey concerning the race for governor.The newspaper will take a simple random sample of n registered voters and determine X = the number of voters that will vote for the Democratic candidate.Is there evidence that a clear majority of the population will vote for the Democratic candidate? To answer this,they will test the hypotheses H₀: p = 0.50 versus H_a: p > 0.50.Consider the two scenarios,where in Scenario 1,n = 1200 and X = 640.In Scenario 2,n = 120 and X = 64.Even though the values for are the same in the two scenarios,we come to opposite decisions (we reject H₀ in one scenario and we do not in the other) .What is the reason for these contrasting decisions?

• A)When the sample size is larger,the margin of error is larger.This may cause the results to be biased.
• B)The 64 people in the small sample must also be part of the 640 people in the big sample.This means we are counting them twice,causing the results of the test with the larger sample to be wrong.
• C)The sample size in the first scenario is much larger,leading to a test with higher power.
• D)We must have made a mistake.With equal values of ,we must come to equal decisions.

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Definitions:

Replacement

Refers to the process of substituting an old asset with a new one to maintain or improve operational efficiency.

Payback Period

A capital budgeting technique that rates projects according to the speed with which they return invested money.

Cumulative Profits

The total amount of profit a company has earned over a specific period, adding together all net profits and losses to date.

Initial Outlay

The initial investment or capital required to start a project or investment.