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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Updated on: 04 Apr 2025, 12:54
Originally posted by Sajjad1994 on 16 Dec 2020, 05:58.
Last edited by Bunuel on 04 Apr 2025, 12:54, edited 4 times in total.
Last edited by Bunuel on 04 Apr 2025, 12:54, edited 4 times in total.
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Almost everyone purchases some snack foods. Data show that over the course of a year, about 91 percent of households purchased potato chips and, on average, households that purchased potato chips bought 9.8 pounds yearly, spending about $26. Examining a somewhat wider class of snacks—all chips (potato, corn, and tortilla)—shows that an even larger share of households, about 96 percent, purchased snacks. There are other salty snacks besides chips such as pretzels, cheese puffs, microwave popcorn, and nuts (packaged and bulk). These snacks were purchased by 96.8 percent of households. Considering all salty snacks, 99 percent of households purchased some, on average spending approximately $76 yearly on 31.8 pounds. The per capita quantity purchased was 14.5 pounds.
Salty snacks are a subset of all snack foods and focusing attention on this class of snack food is sufficient to show three points. First, snack food consumption is nearly universal, so almost all households will bear some burden for a tax that raises snack food prices. Second, descriptive statistics show that there are systematic differences among consumers, with both quantity purchased and expenditures following demographic and household characteristic lines. Third, despite the variance in quantities purchased and expenditures, this class of snack foods appears to be a relatively small expenditure for all types of households.
Salty snacks are a subset of all snack foods and focusing attention on this class of snack food is sufficient to show three points. First, snack food consumption is nearly universal, so almost all households will bear some burden for a tax that raises snack food prices. Second, descriptive statistics show that there are systematic differences among consumers, with both quantity purchased and expenditures following demographic and household characteristic lines. Third, despite the variance in quantities purchased and expenditures, this class of snack foods appears to be a relatively small expenditure for all types of households.
30 cents per pound: Fewer
35 cents per pound: Fewer
40 cents per pound: More
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
60% (03:42) correct
40%
(04:12)
wrong
based on 166
sessions
History
Date
Time
Result
Not Attempted Yet
1. If a government with a population of 50 million households were considering a tax on all salty snacks on a per pound basis, select Fewer, if based on the information in the tabs, it can be reasonably expected that the listed tax rate per pound would generate fewer than 555 million dollars in revenue. Otherwise, select More.
| Fewer | More | |
| 30 cents per pound | ||
| 35 cents per pound | ||
| 40 cents per pound |
ShowHide Answer
Official Answer
30 cents per pound: Fewer
35 cents per pound: Fewer
40 cents per pound: More
there were approximately two people per household in 1999.
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
85%
(hard)
Question Stats:
58% (01:30) correct
42%
(01:36)
wrong
based on 237
sessions
History
Date
Time
Result
Not Attempted Yet
2. The most reasonably inferred statement from the information in the tabs is that
| potato chips were the most popular type of chip in 1999. | |
| pretzels and microwave popcorn were less popular than potato chips in 1999. | |
| pretzels and microwave popcorn were more popular than potato chips in 1999. | |
| there were approximately two people per household in 1999. | |
| taxes on salty snacks were more popular than other food taxes in 1999. |
ShowHide Answer
Official Answer
there were approximately two people per household in 1999.
70 pounds of salty snack consumption was more than two deviations from the mean salty snack consumption in 1999.: Not supported
Approximately one-fifth of all households consumed 10 pounds or fewer of salty snacks in 1999.: Supported
The median range of salty snack consumption is approximately 70 pounds greater than the modal range of salty snack consumption.: Not supported
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
36% (02:31) correct
64%
(02:30)
wrong
based on 221
sessions
History
Date
Time
Result
Not Attempted Yet
3. For each of the following, select Supported if it is a statistical statement supported by the information in Tab 2. Otherwise, select Not supported.
| Supported | Not supported | |
| 70 pounds of salty snack consumption was more than two deviations from the mean salty snack consumption in 1999. | ||
| Approximately one-fifth of all households consumed 10 pounds or fewer of salty snacks in 1999. | ||
| The median range of salty snack consumption is approximately 70 pounds greater than the modal range of salty snack consumption. |
ShowHide Answer
Official Answer
70 pounds of salty snack consumption was more than two deviations from the mean salty snack consumption in 1999.: Not supported
Approximately one-fifth of all households consumed 10 pounds or fewer of salty snacks in 1999.: Supported
The median range of salty snack consumption is approximately 70 pounds greater than the modal range of salty snack consumption.: Not supported
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Improved version of this question is discussed HERE.
04 Jan 2022, 13:41
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1.1) If a government with a population of 50 million households were considering a tax on all salty snacks on a per pound basis, select Fewer, if based on the information in the tabs, it can be reasonably expected that the listed tax rate per pound would generate fewer than 555 million dollars in revenue. Otherwise, select More.
From tab 3, we can see 99.2% of the population would purchase salty snacks and each household that purchased salty snacks would purchase 31.81 pounds on average. Thus, 50 million households would purchase \(50 \text{ million} * 99.2\% * 31.81 = 1577.776 \text{ million pounds}\) of salty snacks.
In order to general 555 millions of tax, we need a tax of \(\frac{555}{1577.776} = 35.18\%\). Thus the first two rows are Fewer, the last row is More.
1.2) The most reasonably inferred statement from the information in the tabs is that
The information is mostly found in tab 1 and tab 3, so focus on those tabs.
a. potato chips were the most popular type of chip in 1999
We can see 91.3% of households purchased potato chips from tab 3 but that does not mean potato chips are the most popular type. Maybe 95% of the households purchased corn chips as 95.5% of the population purchased some type of chips.
b. pretzels and microwave popcorn were less popular than potato chips in 1999
Pretzels and microwave popcorn are categorized in "other salty snacks", which 96.8% of households have purchased. Then it is possible that more households purchased pretzels and microwave popcorn, compared to the 91.3% potato chips.
c. pretzels and microwave popcorn were more popular than potato chips in 1999
We can use the reasoning in (a) to see this is not true.
d. there were approximately two people per household in 1999
Focus on tab 3. If we divide the average quantity purchased per household (2nd column) by per capital purchased (3rd column), we will get approximately 2 for each row.
e. taxes on salty snacks were more popular than other food taxes in 1999
We did not mention taxes in these tabs.
Therefore the answer to this question is D.
1.3) For each of the following, select Supported if it is a statistical statement supported by the information in Tab 2. Otherwise, select Not supported.
1) 70 pounds of salty snack consumption was more than two deviations from the mean salty snack consumption in 1999.
We are essentially asking if 70 is far enough away from the mean of the data. Observing tab 2, we cannot identify the mean of this plot due to the last bar of ">150." If we put extreme values in for that last bar, it is possible to raise the mean up to 70, so we cannot tell where the mean lies and it might just be near 70. Thus this statement is NOT SUPPORTED.
2) Approximately one-fifth of all households consumed 10 pounds or fewer of salty snacks in 1999.
Note how the prompt mentions the modal is 10-12 pounds, we can observe there are 6 bars before the highest bar. Thus the 1st bar represents the number of households who purchased 0 pounds, and we have 0-2, 2-4, ..., 8-10 for the next 5 bars. Adding those 6 bars up gives us roughly 20, which represents 20% of the households. Thus this statement is SUPPORTED.
3) The median range of salty snack consumption is approximately 70 pounds greater than the modal range of salty snack consumption.
The median range is the bar that contains the 50% cutoff of all households. Using the information from earlier, 0-12 pounds represents a total of 25% of the households. We look 5 bars further which represent 12-22, and they represent roughly 4% * 5 = 20% of the entire population which brings us up to 45% of the population. We can see the median is going to lie somewhere between 24~28 then. Thus this statement is NOT SUPPORTED.
From tab 3, we can see 99.2% of the population would purchase salty snacks and each household that purchased salty snacks would purchase 31.81 pounds on average. Thus, 50 million households would purchase \(50 \text{ million} * 99.2\% * 31.81 = 1577.776 \text{ million pounds}\) of salty snacks.
In order to general 555 millions of tax, we need a tax of \(\frac{555}{1577.776} = 35.18\%\). Thus the first two rows are Fewer, the last row is More.
1.2) The most reasonably inferred statement from the information in the tabs is that
The information is mostly found in tab 1 and tab 3, so focus on those tabs.
a. potato chips were the most popular type of chip in 1999
We can see 91.3% of households purchased potato chips from tab 3 but that does not mean potato chips are the most popular type. Maybe 95% of the households purchased corn chips as 95.5% of the population purchased some type of chips.
b. pretzels and microwave popcorn were less popular than potato chips in 1999
Pretzels and microwave popcorn are categorized in "other salty snacks", which 96.8% of households have purchased. Then it is possible that more households purchased pretzels and microwave popcorn, compared to the 91.3% potato chips.
c. pretzels and microwave popcorn were more popular than potato chips in 1999
We can use the reasoning in (a) to see this is not true.
d. there were approximately two people per household in 1999
Focus on tab 3. If we divide the average quantity purchased per household (2nd column) by per capital purchased (3rd column), we will get approximately 2 for each row.
e. taxes on salty snacks were more popular than other food taxes in 1999
We did not mention taxes in these tabs.
Therefore the answer to this question is D.
1.3) For each of the following, select Supported if it is a statistical statement supported by the information in Tab 2. Otherwise, select Not supported.
1) 70 pounds of salty snack consumption was more than two deviations from the mean salty snack consumption in 1999.
We are essentially asking if 70 is far enough away from the mean of the data. Observing tab 2, we cannot identify the mean of this plot due to the last bar of ">150." If we put extreme values in for that last bar, it is possible to raise the mean up to 70, so we cannot tell where the mean lies and it might just be near 70. Thus this statement is NOT SUPPORTED.
2) Approximately one-fifth of all households consumed 10 pounds or fewer of salty snacks in 1999.
Note how the prompt mentions the modal is 10-12 pounds, we can observe there are 6 bars before the highest bar. Thus the 1st bar represents the number of households who purchased 0 pounds, and we have 0-2, 2-4, ..., 8-10 for the next 5 bars. Adding those 6 bars up gives us roughly 20, which represents 20% of the households. Thus this statement is SUPPORTED.
3) The median range of salty snack consumption is approximately 70 pounds greater than the modal range of salty snack consumption.
The median range is the bar that contains the 50% cutoff of all households. Using the information from earlier, 0-12 pounds represents a total of 25% of the households. We look 5 bars further which represent 12-22, and they represent roughly 4% * 5 = 20% of the entire population which brings us up to 45% of the population. We can see the median is going to lie somewhere between 24~28 then. Thus this statement is NOT SUPPORTED.
