Econ3205 Assignment – Economic & Business Statistics

Econ Business Statistics

Econ 3205 – Economic & Business Statistics

Chap3&4Hw Assignment (50 points)

 Instructions:

1. Students should review Appendix 3.2 (Anderson et. al., 9th edition) and Chapters 3&4 Supplemental Note (Excel Lab Solutions) posted in GaView, Module 2, for guidance and examples.

 2. Each student must submit his/her current original work on this assignment. Students may contact/see the instructor for assistance on the assignment.

3. Any form of cheating, including copied work or work allowed to be copied or any form of plagiarism, will result in cancellation of Hw assignment, and a zero score will be assigned. Late assignment or assignment not submitted/uploaded in GaView Assignment Folder will not be graded but assigned zero.

4. Provide Microsoft Excel solutions to each question as applicable. Excel solutions must contain verifiable Excel formulas/commands; credit will not be given for typing manual solutions into Excel Spreadsheet.

5. Submit/upload your Excel Spreadsheets (one file) with clearly shown answers to each of the exercises below (Anderson et. al., 9th edition). Students must manually enter data on the Excel Spreadsheet for each question.

1. Chap 3, Exercise #10, p. 119.

2. Chap 3, Exercise #74, p. 161. Assume that a sample data set is provided.

3. Chap 3, Exercise #59, p. 149. “SmokeDetectors Datafile” is as follows:

Observation Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 4. Percentage of Homes with Smoke Detectors 0.50 0.67 0.74 0.76 0.77 0.82 0.81 0.85 0.86 0.88 0.90 0.92 0.95 0.96 0.97 0.96 0.96 Home Fire Deaths per Million of Population 22.9 20.8 17.3 20.5 19.4 18.9 17.6 16.2 13.6 14.4 14.3 13.0 10.9 10.9 10.2 8.4 8.1

4. A real estate company in Albany, Georgia, claims that the probabilities that a house listed with the company will be sold under 30 days, between 30-59 days, between 60-89 days, or at least 90 days are 0.20, 0.30, 0.35, and 0.15, respectively. A summary of the company’s home sales in the past year is as follows:

 Initial Asking Price Days Listed Until Sold Under $50,000 $(50,000-99,999) at least $100,000 0-29 45 85 30 30-59 95 125 85 60-89 125 165 95 >= 90 15 50 45

(a) Apply Bayes’ theorem and estimate appropriate posterior (revised conditional) probabilities (in 4 decimal points) for the events in the situation presented. Provide an Excel Spreadsheet showing your analytical results and the steps taken for your analysis.

(b) With your estimates in your Excel Spreadsheet in (a), answer the following questions (in 4 decimal points):

1. What is the probability that a house will be sold in 60-89 days, if its initial asking price is $75,000?

2. What is the probability that a house will be sold in 90 days or more, if its initial asking price is $150,000?

(c) What are the conditions that must be met for your estimates in (a) above to be valid? Explain how these conditions are met in this case.