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Econ 232: Economic Statistics 1 Question Paper

Econ 232: Economic Statistics 1

Course:Bachelor Of Science In Economics And Statistics

Institution: Chuka University question papers

Exam Year:2010

CHUKA UNIVERSITY

COLLEGE

UNIVERSITY EXAMINATIONS

SECOND YEAR EXAMINATION FOR THE AWARD OF DEGREE OF BACHELOR OF SCIENCE (ECONOMICS & STATISTICS)

ECON 232: ECONOMIC STATISTICS 1

STREAM: B.SC (ECON & STATISTICS) Y2S1 TIME: 2 HOURS

DAY/DATE: TUESDAY 27/7/2010 8.30 A.M. – 10.30 A.M.
INSTRUCTIONS

Answer QUESTION ONE (1) and any other TWO questions.
Question one (1) carries 30 marks and the rest 20 marks each.

1. (a) Discuss the reasons why a researcher may decide to collect data from the
sample and not the whole population. [8 mark]

(b) Using examples, explain when it will be appropriate for a researcher to use the following sampling techniques;

(i) Stratified sampling
(ii) Systematic sampling
(iii) Purposive sampling [6 marks]

(c) Discuss the importance of statistics in economics. [6 marks]

(d) The table shows the marks obtained by 12 students in Economics and
Statistics paper.

Student
A
B
C
D
E
F
G
H
I
J
K
L
Economics %(y)
24
32
36
44
54
50
55
58
60
74
85
88
Statistics %(x)
17
40
10
50
20
43
54
38
47
66
33
50

(i) Using the method of least square, determine the equation of the regression line of y on x. [8 marks]

(ii) A student obtained 75% marks in economics, use the equation in (i) above to
estimate his marks in statistics. [2 marks]

2. (a) Discuss the problems encountered in the construction of index numbers.
[10 marks]

(b) The following data gives the changes in the prices and consumption (quantity) of certain major constituents of the consumption-basket of goods of the labour class

1988

2008
Commodity
Unit
Price
(Ksh)
Consumption
(Quantity)
Price
(Ksh)
Consumption
(Quantity)
Rice
Kg
250
16
320
20
Wheat
Kg
120
12
160
10
Cloth
Meter
8
50
10
35

Required:

Compute the Fisher’s Ideal Price and Quantity Index number for 2008 with base
of 1998 and comment whether Laspeyres and Paasche Index numbers are closer to the Fishers Index number. [10 marks]

3. (a) A company has three production sections S1,S2 and S3 , which contribute
40%, 35% and 25% respectively. The following percentages of faulty units have been observed; S1 = 2% (0.2), S3 = 4% (0.04).

There is a final check before outputs is dispatched.

Required:

(i) Draw the Decision tree to illustrate the above information.
[4 marks]

(ii) Calculate the probability that a unit found faulty at the check has
come from section (S1) [8 marks]

(b) Explain the following terms:

(i) Mutually exclusive events

(ii) Independent events

(iii) Collective exhaustive events

(iv) Complementary events [8 marks]

4. (a) Discuss the limitations of statistics in its usefulness in different fields.
[5 marks]

(b) The table below gives the number of companies belonging to two areas A and B according to the amount of profits earned by them.

Profits earned
‘000’
No. of Companies

Area A
Area B
6
6
2
25
11
38
60
13
52
84
14
28
105
15
38
150
17
26
170
10
12
400
14
4

Draw in the same diagram their Lorenz curves and interpret them. [15 marks]

5. (a) The following table shows the weekly earnings of workers in two similar
companies.

Weekly earnings (Ksh)
Number of workers

Company A
Company B
400-600
5
15
600-800
7
30
800-1000
7
28
1000-1200
18
14
1200-1400
23
7
1400-1600
14
3
1600-1800
10
2
1800-2000
16
1

Calculate: (i) The mean

(ii) The standard deviation

(iii) The Coefficient of variation

(iv) Comment on the Variability of the two distributions.
[14 marks]

(b) Explain the various requirements to be followed in a questionnaire design.
[6 marks]

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Econ 232: Economic Statistics 1 Question Paper

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