THE UNIVERSITY OF THE WEST INDIES

ST. AUGUSTINE

EXAMINATIONS OF SEMESTER I 2024/2025 7

Code and Name of Course ECON1005: INTRODUCTION TO STATISTICS Paper: Theory

Date and Time: Duration: 2 hours

INSTRUCTIONS TO CANDIDATES: This paper has 6 page(s) and 4 questions.

Non-Programmable Calculators Yes No. of Answer Booklets Required 1

Required (Yes/No)
Model: Any______________
Graph Paper Required (Yes/No) No Multiple Choice Cards Required No
(Yes/No)
Handouts provided (Yes/No) Yes

Total Marks: __85________

Additional Instructions: Candidates are required to answer ALL Questions.

1|Page

© The University of the West Indies Course Code: ECON1005 2024/…../…..

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INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….

 1. A researcher at the UWI was interested in studying the property tax levels in the regions of Diego Martin,
Arima and Chaguanas. A random sample of properties was hence taken from each of these regions. The
data collected which focused on the annual property tax (measured in $000’s) paid by each property owner
was entered on a Minitab spreadsheet for analysis. Exhibit I below was subsequently generated.
Exhibit 1
Regions N Mean Median Std Dev SE Mean

Diego Martin 241 3.8 3.5 * 0.0709

Arima 105 4.7 4.1 1.9 0.1854

Chaguanas 121 6.2 5.5 2.2 **

Note: SE Mean is the Standard Error Mean.

(a) Identify the sampling method employed by the research team. [1 mark]

(b) Determine the values for * and **. [3 marks]

(c) Give the unbiased point estimator and point estimate for the average annual property tax paid by all
property owners in Diego Martin. [2 marks]

(d) Give the unbiased point estimator and point estimate for the variance of the annual property tax paid
by all property owners in Arima. [2 marks]

(e) Assuming normality, find the probability that a property selected at random in Arima will have an
annual property tax value above $5000. [5 marks]

(f) Assuming normality, construct and interpret a 90% confidence interval for the average annual property
tax paid by all property owners in Chaguanas. [6 marks]

(g) The government of Trinidad and Tobago has claimed that the average annual property tax paid by all
property owners in Diego Martin is $3500. You are required to test at the 5% level of significance the
validity of this claim.
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DO NOT WRITE OR TYPE ON THE BACK OF THIS SHEET: USE ONE SIDE ONLY

INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….

 Complete the following:
i. Give the null and alternative hypothesis of this test. [2 marks]
ii. Determine the critical value(s) of this test. [2 marks]
iii. Compute the value of the test statistic. [2 marks]
iv. State the decision rule. [1 mark]
v. Give your decision based on the available sample evidence. [1 mark]
vi. Hence, state your conclusion. [2 marks]

2. Complete the following:

(a) The Ministry of Tourism in Barbados has found that the number of cruise ships visiting Barbados
averages 21 per week.

i. Name the random variable present in the question and state its distribution. [2 marks]

ii. Hence find the probability that exactly 25 cruise ships visit Barbados next week. [3 marks]

iii. How many cruise ships are expected to visit Barbados tomorrow. [1 mark]

(b) The Valsayn branch of Republic Bank has found that 30% of their counter transactions have been deposits,
45% have been withdrawals and the remaining 25% of transactions involve some other counter service. If
6 customers have come to utilize the bank’s counter service this morning, find the probability that at most
4 of them will not be doing deposits. [5 marks]

(c) Starbucks claims that less than 10% of people that try their coffee switch to another brand. In a sample of
100 people that have had Starbucks coffee, only 8 have switched to another brand. Using this sample
information, a researcher would like to test the validity of Starbucks’ claim.

i. What would be the null and alternative hypothesis of this test. [2 marks]
ii. If the value of the test statistic was found to be 𝑍 = −0.67, determine the p-value of this test.
[2 marks]

3|Page

© The University of the West Indies Course Code: ECON1005 2024/…../…..

DO NOT WRITE OR TYPE ON THE BACK OF THIS SHEET: USE ONE SIDE ONLY

INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….

 iii. Hence, give the conclusion of this test at the 1% level of significance. Ensure to also state the
decision rule and decision. [3 marks]

3. Complete the following:

(a) ATF Ltd., a retailer, was interested in determining which brand of the vehicles they sell was the most
durable. The retailer subsequently surveyed a sample of their previous customers with cars that were over
5 years old. Each customer was asked the question ‘How long did it take before the car required a major
repair?’ The data so gathered was analyzed by ATF Ltd.’s data analyst and the results they obtained using
MINITAB are shown below. The numbers at the top of each cell represent the actual number of persons
indicating that choice. The numbers below represent the expected number of persons to make that choice.

Expected counts are printed below observed counts.

Time Until Major Repair
Car Brand Never Within 1 Year 1 – 3 Years Over 3 Years Total
Toyota 40 10 20 25 95
(24.32) (27.36) (*) (21.66)
Nissan 8 27 22 13 70
(17.92) (20.16) (15.96) (15.96)
Honda 16 35 15 19 **
(21.76) (24.48) (19.38) (19.38)
Total 39 72 57 57 250

Chi-sq = 10.11+ ***+ 0.13+ 0.52+

5.49+ 2.32+ 2.29+ 0.55+
1.52+ 4.52+ 0.99+ 0.01= 39.46

DF = ? , p-value = ??

i. Carefully define the null and alternative hypotheses of the 𝜒 2 test underlying the generation of
the above table. [2 marks]
ii. What is the assumption on which the above calculations are based? [1 mark]
iii. Find the missing values ‘*’, ‘**’, ‘***’, ‘?’ and ‘??’. [8 marks]
iv. What is the conclusion of this test? Give reasons for your answer. [2 marks]

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© The University of the West Indies Course Code: ECON1005 2024/…../…..

DO NOT WRITE OR TYPE ON THE BACK OF THIS SHEET: USE ONE SIDE ONLY

INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….

 (b) A recent census in Antigua revealed the following probability distribution for the number of children
under 18 per household (X):
X 0 1 2 3 4

P(X = x) 0.06 0.28 0.37 * 0.15

i. Determine the missing value *. [2 marks]

ii. Hence, determine the expected value of this random variable. [3 marks]

4. A researcher interested in explaining the level of GDP of St. Lucia, developed the following multiple
linear regression model:
𝐺𝐷𝑃 = 𝛽0 + 𝛽1 𝐹𝐷𝐼 + 𝛽2 𝑃𝑂𝑃 + 𝛽3 𝑇𝑂𝑈
where GDP = annual GDP (US$mil.), FDI = annual foreign direct investment (US$mil.), POP = annual
population (000’s) of St. Lucia and TOU = annual tourist spending in St. Lucia (US$mil.). A sample of
annual data was taken for the period 2000 - 2022 and processed using MINITAB, the following is an
extract of the output obtained:

The regression equation is *****

Predictor Coef Std Dev t-ratio p-value
Constant 131 35.79 3.66 0.0017

FDI -24.48 106.43 -0.23 **

POP -0.701 0.3560 * 0.0631

TOU 0.401 0.1064 3.77 0.0013

R-sq = 87.6% R-sq(adj) = 85.2%

Analysis of Variance
Source DF SS MS F p
Regression 3 1601.7 533.9 42.62 ?
Error 19 238.08 12.53
Total 22

a) Write out the regression equation. [2 marks]

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© The University of the West Indies Course Code: ECON1005 2024/…../…..

DO NOT WRITE OR TYPE ON THE BACK OF THIS SHEET: USE ONE SIDE ONLY

INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….

 b) Fill in the missing values ‘*’, ‘**’ and ‘?’. [4 marks]
c) Test whether 𝜷𝟑 (the coefficient of TOU) is significant. Give reasons for your answer [Use 𝛼 = 5%].
[4 marks]
d) Perform the F Test making sure to state the null and alternative hypothesis [Use 𝛼 = 5%]. [4 marks]
e) Given an interpretation of the term “R-sq” and comment on its value. [3 marks]
f) The following correlation matrix was developed from the data used above.
Exhibit II

GDP FDI POP TOU

GDP 1.0 -0.72 -0.86 0.92

FDI -0.72 1 0.69 -0.75

POP -0.86 0.69 1 -0.84

TOU 0.92 -0.75 -0.84 1

What is the correlation between FDI and POP? Interpret this number. [3 marks]

END OF EXAMINATION PAPER

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© The University of the West Indies Course Code: ECON1005 2024/…../…..

DO NOT WRITE OR TYPE ON THE BACK OF THIS SHEET: USE ONE SIDE ONLY

INSTRUCTIONS: Each page must be signed by the Examiners and where applicable, the University Examiner and/or the
External Examiner. Where the examination does not require a University Examiner, the form must be signed by the First and
Second Examiners. Completed forms should be handed to the Assistant Registrar (Examinations). The EXTERNAL
EXAMINER is requested to sign the question paper and return it with comments, if any (on a separate sheet), to the Assistant
Registrar (Examinations).

………………………………….. ………………………………………
First Examiner University Examiner

………………………………….. ……………………………………….
Second Examiner External Examiner (where applicable)

Date: 2024/…/….. Date: 2024/…../.….