Exam 2: Lectures 5-7

Question 1

two-sample t-test

Answer 1

used to determine whether or not means on two independent samples from a normal distribution are equal or whether they differ

Question 2

hypotheses for two-sample t-tests

Answer 2

𝐻_0: 〖𝑀𝑒𝑎𝑛〗_1 = 〖𝑀𝑒𝑎𝑛〗_2
𝐻_𝑎: 〖𝑀𝑒𝑎𝑛〗_1 ≠〖𝑀𝑒𝑎𝑛〗_2

Question 3

Sensitivity analysis

Answer 3

to see whether the best decision changes as one or more inputs change

Question 4

two sample t-test info

Answer 4

If we fail to reject null hypothesis (p-value ≥ .05),

If we reject null hypothesis (p-value < .05),

Question 5

what assumption does a two sample t-test have?

Answer 5

that the variances of two groups are equal in the population

Question 6

Observational study

Answer 6

analyze data already available to us

Question 7

Designed experiment

Answer 7

control for various factors such as age, gender, or socioeconomic status so that we can learn more precisely what is responsible for the effects we observe

Question 8

Null hypothesis for one-way ANOVA

Answer 8

there are no differences in population means across conditions

Question 9

Alternative hypothesis for one-way ANOVA

Answer 9

at least one of them will be different

Question 10

what is the analysis of variance (ANOVA)

Answer 10

The procedure for analyzing difference between more than two population means

Question 11

experimental units

Answer 11

Entities measured at each treatment level (or combination of levels)

Question 12

In ANOVA, what is the variable of primary interest that we wish to measure?

Answer 12

dependent variable

Question 13

post hoc test

Answer 13

run to confirm where the differences occur between groups

Question 14

Given the 0.05 significance level, please understand hypothesis testing with a given p-value

Answer 14

If p-value < .05 , then reject the null hypothesis
If p-value >0.05, then fail to reject the null hypothesis

Question 15

decision tree

Answer 15

enables a decision maker to view all important aspects of the problem at once: the decision alternatives, the uncertain outcomes and their probabilities, the economic consequences, and the chronological order of events

Question 16

expected monetary value (EMV)

Answer 16

a weighted average of the possible payoffs for this decision, weighted by the probabilities of the outcomes

Question 17

what things do decision trees consist of

Answer 17

composed of nodes (circles, squares, and triangles) and branches (lines)

Question 18

decision node

Answer 18

represents a time when the decision maker makes a decision

Question 19

probability node

Answer 19

represents a time when the result of an uncertain outcome becomes known

Question 20

end node

Answer 20

indicates that the problem is completed—all decisions have been made, all uncertainty has been resolved, and all payoffs and costs have been incurred

Question 21

In every regression study, a single variable that we are trying to explain or predict is..

Answer 21

the dependent variable

Question 22

simple linear regression

Answer 22

quantifies the relationship where there is a single explanatory variable

Question 23

purpose of simple linear regression

Answer 23

Evaluate the significance of independent variable in explaining the behavior of dependent variable

Predict the values of dependent variable based on the values of independent variable

Question 24

r^2

Answer 24

the percentage of variation of the dependent variable explained by the regression

Question 25

rule of thumb about r^2

Answer 25

< .10: trivial
.10 – .30: small to medium
.30 – .50: medium to large
>.50: large to very large

Question 26

Please clearly understand the interpretation of the regression coefficients for simple linear regression

Answer 26

If Y is dependent variable, and X1 through Xk are explanatory variables, then a multiple regression equation has the form:
𝛽_0 is the Y-intercept, and 𝛽1 through 𝛽k are the slopes
General Multiple Regression Equation:
Y = 𝛽_0 + 𝛽1X1i + 𝛽2X2i + … + 𝛽kXki

𝛽_0 and 𝛽s in the equation are regression coefficients
Each slope coefficient is the expected change in Y when this particular X increases by one unit and the other Xs in the equation remain constant

Question 27

cross-sectional data

Answer 27

usually data gathered from approximately the same period of time from a population

Question 28

time series data

Answer 28

involve one or more variables that are observed at several, usually equally spaced, points in time

Question 29

correlation

Answer 29

numerical summary measures that indicate the strength of linear relationships between pairs of variables (continuous variables)

Question 30

how do we test the assumption of homogeneity in variance

Answer 30

Levene’s Test of Equality of Variances
H0: 〖𝜎” “ 〗_𝑋 = 〖𝜎” “ 〗_𝑌 (Two groups’ variances are equal)
H1: 〖𝜎” “ 〗_𝑋≠ 〖𝜎” “ 〗_𝑌 (Two groups’ variances are unequal)

Question 31

outlier

Answer 31

observations that fall outside of the general pattern of the rest of the observations