Download Ethics

Durham Industries, Inc.
Student Coaching Slides
Question 1A & 1B:
Histogram
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See Gateway web site for Excel steps
Use tools/data analysis/histogram
What proportion of Eastasia citizens
have disposable incomes > $1000 per
month? Approximate answer is ok here.
Question 1C:
Sample statistics
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See web site for Excel steps
Use tools/data analysis/descriptive
statistics/summary statistics
Mean: first line
Standard deviation: fifth line
Question 1D:
Hypothesis Testing
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Step 1: Ho: Null hypothesis = Eastasia’s claim
Step 2: H1 or Ha: Alternative hypothesis =
Oceana’s claim
(a) If Oceana wins the debate only when the
population mean is less than $1000, H1
should be one-tail
(b) Otherwise, H1 should be two-tail
Hypothesis Testing
(continued)
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Step 3: Critical Value
(a) Determine which statistical table to use
(b) If H1 is one-tail, put .05 in tail; if H1 is 2tail, put .025 in each tail
Step 4: Test Statistic = Sample Statistic
(a) Use sample mean and standard deviation
from Question 1c
(b) Use standard error of the mean
Hypothesis Testing
(continued)
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Step 5: Conclusion
(a) If sample statistic (absolute value)
exceeds critical value, reject Ho
(b) Otherwise, do not reject Ho
Question 2A:
Income Variation
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Standard deviation measures variation
If standard deviation = 0, no variation,
so each person has same income
High standard deviation implies high
variation
Question 2B:
Poverty Level
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Use Z table (normal area table)
Use standard deviation, NOT standard
error since this is not a sampling
distribution problem
Question 2B has 2 calculations, one for
Eastasia and the other for Oceana
Question 2B:
Skewed Distribution
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If mean > median, distribution is
skewed
Do you think mean > median for
income?
Use normal table only if distribution is
bell shaped
Bell shaped only if symmetric
Symmetric only if not skewed
Question 3:
Hypothesis Testing
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Ho: Population proportion = 1/3
(Amnesty International‘s claim)
Normal approximation to binomial
H1 is one-tail if Minister of Commerce
wins debate only when proportion is
less than 1/3. Otherwise, it is two-tail
Sample proportion = number of political
prisoners/sample size
Questions 4 and 5:
Factors Determining GDP/Capita
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Physical Capital
Human Capital
Level of Technology
Efficiency
Question 5:
Ethical Considerations
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Who benefits and who loses from the
firm’s decision?
Who does the firm have a responsibility
to?
What are those responsibilities?