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Econ 57 Fall 2001 Midterm

1. Legendary Harvard University statistics professor Frederick Mosteller reported that if you flip a coin in class and ask if anything suspicious is happening, “hands suddenly go up all over the room” after the fifth head or tail in a row, “so there is some empirical evidence that the rarity of events in the neighborhood of .05 begins to set people’s teeth on edge.” What is the probability that a fairly flipped coin will give the same result five times in a row (either five heads or five tails)?

2. To see who serves first in their Thursday squash games, Player A spins the racket while Player B guesses whether the racket logo will stop face up or face down. Player B initially believes that there is only a 5% chance that A cheats when he spins the racket. But after A wins the first five times he spins the racket, B isn’t so sure. Assuming that A will always win if he cheats and has a 50% chance of winning if he doesn’t cheat, what is B’s revised probability that A cheats?

3. The noon temperature on July 4 in two cities, A and B, is normally distributed with respective means MA and MB and standard deviations SA and SB. For each of these three cases, identify the city that has the higher probability of a noon July 4 temperature above 100 degrees.

5. Mark believes that there is a 4/5 probability that it will snow in Boston on New Year’s eve 2001; Mindy believes that the probability is only 2/3. What bet could they make that would give each a positive expected value? For example, Mark pays Mindy $2 if it snows and Mindy pays Mark $5 if it doesn’t.

6. For each of the following studies, identify the type of graph (1 histogram, side-by-side boxplots, 1 scatter diagram, or 1 time series graph) that would be MOST appropriate.

7. Answer this question to Ask Marilyn [Parade, September 10, 2000]: “Say we’re going to toss a coin repeatedly until we get one of these sequences in order: heads/tails (HT) or tails/tails (TT). If my sequence comes up first, you pay me a dollar; but if your sequence comes up first, I pay you a dollar. At that point, we stop and start all over again. Given that we’re going to play this game repeatedly, which sequence would you choose?

8. Bill is taking a multiple-choice test, where each question has 5 possible answers. Running out of time, he randomly guesses the answers to the last 5 questions.

9. Twenty-four female college seniors were asked how many biological children they expect to have during their lifetimes.

Of these four numbers (0, 1, 2, 2.3), one is the mean, one is the median, one is the standard deviation, and one is irrelevant. Identify which number is which.

10. Answer this question to Ask Marilyn: “I recently returned from a trip to China, where the government is so concerned about population growth that it has instituted strict laws about family size. In the cities, a couple is permitted to have only one child. In the countryside, where sons traditionally have been valued, if the first child is a son, the couple may have no more children. But if the first child is a daughter, the couple may have another child. Regardless of the sex of the second child, no more are permitted. How will this policy affect the mix of males and females?”