You may use the extra sheets of paper to solve the following questions, but please report your results and conclusions in the space provided. Whenever possible, show your work for potential partial credit. NOTE: When performing numerical calculations, keep at least 4 digits after a decimal. (I.e., do NOT round .2265 to .23 or .227) BUDGET YOUR TIME WISELY.

1. The following is a rendition of a customer comment card at a local restaurant. Use it as the basis for the questions below.

			El Diablo
Buenos Dias! We are extremely happy that you have chosen to dine at El Diablo’s! Please take a moment to tell us how you enjoyed our hospitality. Gracias!			Server’s Name ______________
Food Quality:	Excellent = 1	Good = 2	Satisfactory = 3	Unsatisfactory = 4
Service Quality:	Excellent = 1	Good = 2	Satisfactory = 3	Unsatisfactory = 4
Excluding tax and tip, approximately how much did you spend on your entire meal? ______			Zip code:_______

a. Which of the elements of this comment card would generate qualitative and which would generate quantitative data? Carefully explain. (5 points)

b. Is this an example of gathering primary or secondary data? Explain. (4 points)

2. The following table represents sales in millions of dollars for a sample of 20 companies in the health care services industry during third quarter 1997 (Business Week, November 17, 1997).

a. Construct a frequency, relative frequency, and cumulative frequency distribution to summarize the data. (12 points)

b. With the above tabular summary of the data, make at least two specific statistical inferences about third quarter sales in the health care services industry. (6 points)

805	445	274	374	389
307	1968	1614	393	362
320	472	357	486	845
748	377	284	2331	1512

c. Use the above data to calculate the median and mean of the sales data in the health care services industry. Interpret these values. (4 points)

d. Use the above data to calculate the standard deviation of the sales data in the health care services industry. Interpret this value. (6 points)

e. Sometimes the Empirical Rule is used to identify outliers in the data. Why? Are there any outliers in the above sales data? Explain your reasoning. (8 points)

3. The table below displays the advertising expenditures and sales levels for a small business over an 8-month span.

Advertising Expenditures X ($1000s)	Sales Level Y ($1000s)
1	30
3	40
5	40
4	50
2	35
5	50
3	35
2	25

a. Compute the covariance and correlation coefficient to measure how these variables are related. Interpret these values. (10 points)

b. Does the estimated relationship between these two variables make economic sense? Thoroughly explain. (8 points)

4. Suppose that an aerospace company feels that it has a 60% chance of winning contract A and a 30% chance of winning contract B. Given that it wins contract B, the company believes it has an 80% chance of winning contract A.

a. What is the probability that the company will win both contracts? (4 points)

b. What is the probability that the company will win at least one of the two contracts? (4 points)

c. Is the event of winning contract A independent from the event of winning contract B? Explain using probabilities. (7 points)

d. Are these two events mutually exclusive? Explain using probabilities. (5 points)

5. During the summer months (June to August, inclusive), an average of 5 marriages per month take place in a small city. Assuming that these marriages occur randomly and independently of one another, find the probability of the following:

a. Fewer than 3 marriages will occur in June. (4 points)

b. Exactly 10 marriages will occur during the 2 months of July and August. (3 points)

6. A student majoring in economics is trying to decide on the number of firms to which she should apply. Given her work experience, grades, and extracurricular activities, she has been told by a placement counselor that she can expect to receive a job offer from 80% of the firms to which she applies. Wanting to save time, the student applies to only 5 firms. Assuming the counselor is correct, find the probability that the student receives the following.

a. No offers. (2 points)

b. Between two and four offers (inclusive). (3 points)

c. What assumptions have you made in solving the first two parts of this problem? Explain. (5 points)