# Conversational Statistics for Business & Economics

## $138.34

### Ebook

## $111.72

New Fourth Edition Now Available!

* Conversational Statistics for Business and Economics* is a textbook like no other. Written in an entertaining narrative format that reads like a novel, the book talks the reader through a thought process that leads to logical conclusions without all of the clutter and jargon provided by other statistics textbooks.

Based on the author’s 25+ years of teaching, L. Van Jones anticipates the reader’s questions and has interspersed them at appropriate times throughout ** Conversational Statistics** to create a narrative textbook in an interactive format.

With content presented in an easy-to-understand and humorous manner by a native Texan, ** Conversational Statistics for Business and Economics** features:

- Coverage of 15 major subjects, including Descriptive and Inferential Statistics (Confidence Intervals and Hypothesis Testing), ANOVA, Quality Control with introduction to Six Sigma, Index Numbers, Regression, and Time Series Modeling.
- An accompanying detailed step-by-step solutions manual to help the reader understand the order of operation and allows the professor to concentrate on lectures and testing. Spiral bound in a tab format, the manual includes In-Class Problem Solutions, Homework Solutions, and Pop Quizzes.
- In-Class Problems to be used at the end of each lecture to help solidify and comprehend what has been discussed.
- Homework Problems with detailed solutions to aid in the reader learning the material.

**Preface**

**Chapter 1 Introduction to Definitions, Concepts and Graphics**

Introduction

Uses of Statistical Techniques

More General Ideas and a Couple of Specific Thoughts

Bias

Random Sample

Population versus Sample

Concept of Inferential Statistics

Sampling Error

Parameter and Statistic

Central Tendency

Dispersion

Variables

Raw (Ungrouped) and Grouped (Frequency Distribution) Data Sets

Other Terms and Calculations

Pictorial Displays

Caveat (Keep in Mind for Chapter 3)

Homework Problems Chapter 1

**Chapter 2 Descriptive Statistics—Raw Data**

Measures of Central Tendency for Raw (Ungrouped) Data Sets

Calculations for Measures of Dispersion for Raw (Ungrouped) Data Sets

Summary Chart for the Symbols I Am Using

Excel Calculations

Pearsonian Coefficient of Skewness

Example One

Example Two

Types of Distributions

Coefficient of Variation

In-Class Problems Chapter 2

Homework Problems Chapter 2

**Chapter 3 Descriptive Statistics—Grouped Data**

Measures of Central Tendency for Grouped Data Sets

Advantages and Disadvantages

Variance and Standard Deviation for Grouped Data Sets

Percentiles, Quartiles, and Deciles

Empirical Rule and Chebyshev’s Theorem

In-Class Problems Chapter 3

Homework Problems Chapter 3

**Chapter 4 Probability I—The Basics**

Three Important Theorems

Why Do You Study Probability?

Helpful Definitions or“Your New Foreign Language” Section

Let’s Look at Some Examples

Three Generally-Accepted Approaches to Probability

Odds Making—The Basics

Probability or Decision Tree

Events, Unions, Intersections, Addition, and Subtraction Rules

Unions and Intersections

Set A

Set B

Intersection

Union

Frequency Table and Probability Table

Summary of General Guidelines

Remember These Definitions

Frequency Table and Probability Table

Fun Applications

In-Class Problems Chapter 4

Homework Problems Chapter 4

**Chapter 5 Probabilities II—Probability Distributions**

Permutations and Combinations

Probability Distributions

Mathematical Expectations

Game

Uniform Probability Distribution (Continuous Data)

Other Probability Distributions

Binomial Distribution (Discrete Data)

Normal Distribution (Continuous Data)

Standard Normal Distribution

Tear-Out Normal Distribution Table

In-Class Problems Chapter 5

Homework Problems Chapter 5

**Chapter 6 Inferential Statistics—The Basics**

Inferential Statistics

Sampling Distribution

Sampling Error

Sampling Distribution of Sample Means

Standard Error (okay, start paying close attention from this point forward)

Central Limit Theorem and the Z-Process

Finite Population Correction Factor

Use of the Z-Process

Four Methods of Sampling Which Meet the Requirement of

Randomness

Quota or Mall Intercept Sampling

Non-Sampling Error

Tear-Out Sheet: Normal Distribution Table

In-Class Problems Chapter 6

Homework Problems Chapter 6

Extra Problems Chapter 6

**Chapter 7 Confidence Intervals—One Population Mean and Proportion Testing**

Confidence Intervals

Z-Values

Relationship Between Standard Error, Sample Size, and Interval Width

t-test

Rules to Remember

Controlling or Affecting the Interval Width

Sample Size

Four Properties of a Good Estimator

Proportions (Confidence Intervals)

Tear-Out Sheet: t-Distribution Table

In-Class Problems Chapter 7

Homework Problems Chapter 7

Extra Problems Chapter 7

**Chapter 8 Applying Inferential Statistics—Hypothesis Testing One Population**

Introduction: What Is Hypothesis Testing?

Confidence Intervals as Contrasted to Hypothesis Testing

Confidence Interval

Hypothesis Testing (Form III)

Example of Hypothesis Testing

An Overview of the Concept

Type I and Type II Errors (Side Bar as a Judge Would Say)

Five Steps for Working Hypothesis Testing Problems

Three Forms of Hypothesis Testing (Forms I, II and III)

The Statement of Conclusion

How to Set Up the Null Hypothesis

Three Critical Questions That Will Aid in Setting

Up the Alternate Hypothesis in Step I of the Process

Another Method of Setting Up the Alternate Hypotheses

A Complete Example

Permitted Substitutions

The Z-Test Approach

The p-value Approach

Using Excel for p-values

Final Thought on the p-value

“Professor, I Still Get Confused about What to Do with Critical and Calculated Values. Can You Help?”

How Do I Keep All of These Insane Rules Straight in My Mind?

Proportions

In-Class Problems Chapter 8

Homework Problems Chapter 8

Extra Problems Chapter 8

**Chapter 9 Hypothesis Testing and Confidence Intervals for Two Populations**

Two Populations

Confidence Intervals—Large Samples

Hypothesis Testing—Large Samples

Numerator Calculation

Denominator Calculation

Putting Them Together

Hypothesis Testing versus Confidence Intervals

Proportions

Use of Excel

t-test: Paired Two Sample Means

In-Class Problems Chapter 9

Homework Problems Chapter 9

Extra Problems Chapter 9

**Chapter 10 Applying Inferential Statistics—Chi-Square as a Parametric Test, the F-distribution, One-Way ANOVA Tests**

Introduction

Chi-Square as a Parametric Test

F-distribution

One-Way ANOVA Tests

Manual Calculations of ANOVA

In-Class Problems Chapter 10

Homework Problems Chapter 10

**Chapter 11 Forecasting—Simple and Multiple Regression**

Regression

Linear and Nonlinear Regression

Probabilistic or Stochastic or Random Model (All the Same)

Regression Using Excel

Coefficient of Determination and Correlation

Three Y-Values

Manual Approach to the Method of Least Squares or Ordinary Least Squares

Pizza Restaurant Study

Manual Calculation of the Predicting Equation

Goodness of Fit (Coefficient of Determination and Standard Error of Regression)

Computational Ease for SSR and SST

Standard Error of the Estimate

Coefficient of Correlation

Caveats

Beta and Rho Testing

More Accurate Uses of the Standard Error

The Predicting Interval and Confidence Interval

(Specific Names and Specific Solutions for Each)

Multiple Regression

Parsimonious Model

R-Square (Coefficient of Determination)

Excel Output ANOVA Portion

Additional Concepts

In-Class Problems Chapter 11

Homework Problems Chapter 11

**Chapter 12 Smoothing Techniques and Time-Series Qualitative and Quantitative Methods of Forecasting**

Business Forecasting and Planning

Qualitative Approaches

Quantitative Approaches

Several Observations and Definitions

Three Methods of Forecasting

Formula Terms Defined Separately

Chart Presentations Using Chart Wizard and Smoothing Using Excel

Why Do All of This or the “Who Cares”Question

Excel for Developing Forecasting Equations

In-Class Problems Chapter 12

Homework Problems Chapter 12

**Chapter 13 Index Numbers**

Index Numbers

Examples of Common Price Index Numbers

Other Links of Interest

Consumer Price Index (CPI)

Common Uses of the CPI

Weaknesses of CPI

CPI as an Inflation Calculator

The CPI as a Deflation Calculator

Calculating the Relative Price Change Between Two Periods

Is the CPI the Best Measure of Inflation?

Estimating Prices or Cost Using CPI or Your Own Index Numbers

Producer Price Index

Industrial Production Index

Dow-Jones Industrial Average

Standard and Poor’s Composite Index

In General There Are Three Basic Types of Index

Numbers

Laspeyres Index Calculation

Paasche Index Calculation

Identifying Issues and Concerns

Can Index Numbers Be Manipulated?

In-Class Problems Chapter 13

Homework Problems Chapter 13

**Chapter 14 Assumption Free Distributions Chi-Square as a Nonparametric Test**

Chi-Square as a Nonparametric Test

Other Nonparametric Tests

Back to Chi-Square as a Nonparametric Test

Goodness of Fit

Setting Up the Null and Alternate Hypotheses

Solutions to Chi-Square Problems

Difference in the Solutions

Excel

In-Class Problems Chapter 14

Homework Problems Chapter 14

**Chapter 15 Quality Control Including Six Sigma™—Introduction**

Quality Control

Control Charts

Process Quality Control

Charts as an Aid

General Procedure

Rational Subgroups

The Mean Chart

The Range Chart

Control Charts for Attributes

P-Charts

C-Charts

Interpreting Control Charts

Acceptance Sampling

What Does This Mean?

Different Sampling Plans

Six Sigma™ Commuting

Professor, Why Don’t You Just Leave Earlier?

Thinking of It a Different Way

A Second Example

General Textbook Ending Comment

One Last Attempt at Humor

In-Class Problems Chapter 15

Homework Problems Chapter 15

**Appendix I My Personal Opinion on the Application of Probabilities to Evolutionary Theory – A Non-Testable Section**

**Appendix II Tables **

**Index **

New Fourth Edition Now Available!

* Conversational Statistics for Business and Economics* is a textbook like no other. Written in an entertaining narrative format that reads like a novel, the book talks the reader through a thought process that leads to logical conclusions without all of the clutter and jargon provided by other statistics textbooks.

Based on the author’s 25+ years of teaching, L. Van Jones anticipates the reader’s questions and has interspersed them at appropriate times throughout ** Conversational Statistics** to create a narrative textbook in an interactive format.

With content presented in an easy-to-understand and humorous manner by a native Texan, ** Conversational Statistics for Business and Economics** features:

- Coverage of 15 major subjects, including Descriptive and Inferential Statistics (Confidence Intervals and Hypothesis Testing), ANOVA, Quality Control with introduction to Six Sigma, Index Numbers, Regression, and Time Series Modeling.
- An accompanying detailed step-by-step solutions manual to help the reader understand the order of operation and allows the professor to concentrate on lectures and testing. Spiral bound in a tab format, the manual includes In-Class Problem Solutions, Homework Solutions, and Pop Quizzes.
- In-Class Problems to be used at the end of each lecture to help solidify and comprehend what has been discussed.
- Homework Problems with detailed solutions to aid in the reader learning the material.

**Preface**

**Chapter 1 Introduction to Definitions, Concepts and Graphics**

Introduction

Uses of Statistical Techniques

More General Ideas and a Couple of Specific Thoughts

Bias

Random Sample

Population versus Sample

Concept of Inferential Statistics

Sampling Error

Parameter and Statistic

Central Tendency

Dispersion

Variables

Raw (Ungrouped) and Grouped (Frequency Distribution) Data Sets

Other Terms and Calculations

Pictorial Displays

Caveat (Keep in Mind for Chapter 3)

Homework Problems Chapter 1

**Chapter 2 Descriptive Statistics—Raw Data**

Measures of Central Tendency for Raw (Ungrouped) Data Sets

Calculations for Measures of Dispersion for Raw (Ungrouped) Data Sets

Summary Chart for the Symbols I Am Using

Excel Calculations

Pearsonian Coefficient of Skewness

Example One

Example Two

Types of Distributions

Coefficient of Variation

In-Class Problems Chapter 2

Homework Problems Chapter 2

**Chapter 3 Descriptive Statistics—Grouped Data**

Measures of Central Tendency for Grouped Data Sets

Advantages and Disadvantages

Variance and Standard Deviation for Grouped Data Sets

Percentiles, Quartiles, and Deciles

Empirical Rule and Chebyshev’s Theorem

In-Class Problems Chapter 3

Homework Problems Chapter 3

**Chapter 4 Probability I—The Basics**

Three Important Theorems

Why Do You Study Probability?

Helpful Definitions or“Your New Foreign Language” Section

Let’s Look at Some Examples

Three Generally-Accepted Approaches to Probability

Odds Making—The Basics

Probability or Decision Tree

Events, Unions, Intersections, Addition, and Subtraction Rules

Unions and Intersections

Set A

Set B

Intersection

Union

Frequency Table and Probability Table

Summary of General Guidelines

Remember These Definitions

Frequency Table and Probability Table

Fun Applications

In-Class Problems Chapter 4

Homework Problems Chapter 4

**Chapter 5 Probabilities II—Probability Distributions**

Permutations and Combinations

Probability Distributions

Mathematical Expectations

Game

Uniform Probability Distribution (Continuous Data)

Other Probability Distributions

Binomial Distribution (Discrete Data)

Normal Distribution (Continuous Data)

Standard Normal Distribution

Tear-Out Normal Distribution Table

In-Class Problems Chapter 5

Homework Problems Chapter 5

**Chapter 6 Inferential Statistics—The Basics**

Inferential Statistics

Sampling Distribution

Sampling Error

Sampling Distribution of Sample Means

Standard Error (okay, start paying close attention from this point forward)

Central Limit Theorem and the Z-Process

Finite Population Correction Factor

Use of the Z-Process

Four Methods of Sampling Which Meet the Requirement of

Randomness

Quota or Mall Intercept Sampling

Non-Sampling Error

Tear-Out Sheet: Normal Distribution Table

In-Class Problems Chapter 6

Homework Problems Chapter 6

Extra Problems Chapter 6

**Chapter 7 Confidence Intervals—One Population Mean and Proportion Testing**

Confidence Intervals

Z-Values

Relationship Between Standard Error, Sample Size, and Interval Width

t-test

Rules to Remember

Controlling or Affecting the Interval Width

Sample Size

Four Properties of a Good Estimator

Proportions (Confidence Intervals)

Tear-Out Sheet: t-Distribution Table

In-Class Problems Chapter 7

Homework Problems Chapter 7

Extra Problems Chapter 7

**Chapter 8 Applying Inferential Statistics—Hypothesis Testing One Population**

Introduction: What Is Hypothesis Testing?

Confidence Intervals as Contrasted to Hypothesis Testing

Confidence Interval

Hypothesis Testing (Form III)

Example of Hypothesis Testing

An Overview of the Concept

Type I and Type II Errors (Side Bar as a Judge Would Say)

Five Steps for Working Hypothesis Testing Problems

Three Forms of Hypothesis Testing (Forms I, II and III)

The Statement of Conclusion

How to Set Up the Null Hypothesis

Three Critical Questions That Will Aid in Setting

Up the Alternate Hypothesis in Step I of the Process

Another Method of Setting Up the Alternate Hypotheses

A Complete Example

Permitted Substitutions

The Z-Test Approach

The p-value Approach

Using Excel for p-values

Final Thought on the p-value

“Professor, I Still Get Confused about What to Do with Critical and Calculated Values. Can You Help?”

How Do I Keep All of These Insane Rules Straight in My Mind?

Proportions

In-Class Problems Chapter 8

Homework Problems Chapter 8

Extra Problems Chapter 8

**Chapter 9 Hypothesis Testing and Confidence Intervals for Two Populations**

Two Populations

Confidence Intervals—Large Samples

Hypothesis Testing—Large Samples

Numerator Calculation

Denominator Calculation

Putting Them Together

Hypothesis Testing versus Confidence Intervals

Proportions

Use of Excel

t-test: Paired Two Sample Means

In-Class Problems Chapter 9

Homework Problems Chapter 9

Extra Problems Chapter 9

**Chapter 10 Applying Inferential Statistics—Chi-Square as a Parametric Test, the F-distribution, One-Way ANOVA Tests**

Introduction

Chi-Square as a Parametric Test

F-distribution

One-Way ANOVA Tests

Manual Calculations of ANOVA

In-Class Problems Chapter 10

Homework Problems Chapter 10

**Chapter 11 Forecasting—Simple and Multiple Regression**

Regression

Linear and Nonlinear Regression

Probabilistic or Stochastic or Random Model (All the Same)

Regression Using Excel

Coefficient of Determination and Correlation

Three Y-Values

Manual Approach to the Method of Least Squares or Ordinary Least Squares

Pizza Restaurant Study

Manual Calculation of the Predicting Equation

Goodness of Fit (Coefficient of Determination and Standard Error of Regression)

Computational Ease for SSR and SST

Standard Error of the Estimate

Coefficient of Correlation

Caveats

Beta and Rho Testing

More Accurate Uses of the Standard Error

The Predicting Interval and Confidence Interval

(Specific Names and Specific Solutions for Each)

Multiple Regression

Parsimonious Model

R-Square (Coefficient of Determination)

Excel Output ANOVA Portion

Additional Concepts

In-Class Problems Chapter 11

Homework Problems Chapter 11

**Chapter 12 Smoothing Techniques and Time-Series Qualitative and Quantitative Methods of Forecasting**

Business Forecasting and Planning

Qualitative Approaches

Quantitative Approaches

Several Observations and Definitions

Three Methods of Forecasting

Formula Terms Defined Separately

Chart Presentations Using Chart Wizard and Smoothing Using Excel

Why Do All of This or the “Who Cares”Question

Excel for Developing Forecasting Equations

In-Class Problems Chapter 12

Homework Problems Chapter 12

**Chapter 13 Index Numbers**

Index Numbers

Examples of Common Price Index Numbers

Other Links of Interest

Consumer Price Index (CPI)

Common Uses of the CPI

Weaknesses of CPI

CPI as an Inflation Calculator

The CPI as a Deflation Calculator

Calculating the Relative Price Change Between Two Periods

Is the CPI the Best Measure of Inflation?

Estimating Prices or Cost Using CPI or Your Own Index Numbers

Producer Price Index

Industrial Production Index

Dow-Jones Industrial Average

Standard and Poor’s Composite Index

In General There Are Three Basic Types of Index

Numbers

Laspeyres Index Calculation

Paasche Index Calculation

Identifying Issues and Concerns

Can Index Numbers Be Manipulated?

In-Class Problems Chapter 13

Homework Problems Chapter 13

**Chapter 14 Assumption Free Distributions Chi-Square as a Nonparametric Test**

Chi-Square as a Nonparametric Test

Other Nonparametric Tests

Back to Chi-Square as a Nonparametric Test

Goodness of Fit

Setting Up the Null and Alternate Hypotheses

Solutions to Chi-Square Problems

Difference in the Solutions

Excel

In-Class Problems Chapter 14

Homework Problems Chapter 14

**Chapter 15 Quality Control Including Six Sigma™—Introduction**

Quality Control

Control Charts

Process Quality Control

Charts as an Aid

General Procedure

Rational Subgroups

The Mean Chart

The Range Chart

Control Charts for Attributes

P-Charts

C-Charts

Interpreting Control Charts

Acceptance Sampling

What Does This Mean?

Different Sampling Plans

Six Sigma™ Commuting

Professor, Why Don’t You Just Leave Earlier?

Thinking of It a Different Way

A Second Example

General Textbook Ending Comment

One Last Attempt at Humor

In-Class Problems Chapter 15

Homework Problems Chapter 15

**Appendix I My Personal Opinion on the Application of Probabilities to Evolutionary Theory – A Non-Testable Section**

**Appendix II Tables **

**Index **