Econ. 5 Chapter 15 Practice Assignment pt 2
Visa Card USA studied how frequently consumers of various age
groups use plastic (credit and debit cards) when making purchases.
Sample data for 300 customers show the use of plastic cards by four
age groups.
Age Group
Payment Type 18-24 25-34
35-44 45 and over
Total
Plastic 21 27
Cash 21 36 42 90 Total
27 36
Visa wants to determine if use of plastic is associated with age
group.
State the null and alternative hypotheses.
Use the table below to calculate the expected frequencies
Age Group
Payment Type 18-24 25-34 35-44
Plastic Cash Total
10. Calculate the χ2 test statistic.
45 and over
Total
Calculate the degrees of freedom.
Find a range for the p-value using the χ2 table.
What is your conclusion in statistical terms? Use α =
.05.
State your conclusion in business terms.
15. What implication does this result have for companies like
Visa? In other words, what should Visa do with this
information?