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ECON*2740 Economics Statistics Fall, 2018

Assignment #1

Due Fri. Oct. 5. A quiz will be created on the course’s Courselink site named

“Assignment 1 answers”. You will have two hours to type your assignment

answers in that “quiz”. You will not be able to submit answers after 11:59pm

on the due date. For full marks you need to define your events clearly and show

your work.

1. A restaurant manager classifies customers as regular, occasional, or new,

and finds that of all customers 50%, 40%, and 10%, respectively, fall into

these categories. The manager found that wine was ordered by 70% of the

regular customers, by 50% of the occasional customers, and by 30% of the

new customers.

(a) What is the probability that a randomly chosen customer orders

wine?

(b) If wine is ordered, what is the probability that the person ordering

is a regular customer?

is an occasional customer?

2. A lawn-care service makes telephone solicitations, seeking customers for

the coming season. A review of the records indicates that 15% of these

solicitations produce new customers and that, of these new customers,

80% had used some rival service in the previous year. It is also estimated

that, of all solicitation calls made, 60% are to people who had used a rival

service the previous year. What is the probability that a call to a person

who had used a rival service the previous year will produce a new customer

for the lawn care service?

3. Sally purchases hardwood lumber for a custom furniture-building shop.

She uses three suppliers, Northern Hardwoods, Mountain Top, and Spring

Valley. Lumber is classified as either clear or has defects. Sally estimates

that defects constitute 10% of the lumber pile. A recent analysis of the

defect lumber pile showed that 30% came from Northern Hardwoods and

50% came from Mountain Top. Analysis of the clear pile indicates that

40% came from Northern and 40% came from Spring Valley. What is the

percent of clear lumber from each of the three suppliers? What is the

percent of lumber from each of the three suppliers?

Assignment 1 - Three questions to answer consisting of first 4 chapters.

Economic Statistics FW (Econ2740)

University of Guelph

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