A store surveys its target demographic and learns that 86% of people would purchase the product they’ve been heavily advertising. Is this an experiment or an observational study? Can they conclude their current advertising strategy caused the high percentage of interest?
Table of contents
- 1. Introduction to Statistics53m
- 2. Describing Data with Tables and Graphs2h 1m
- 3. Describing Data Numerically1h 48m
- 4. Probability2h 26m
- 5. Binomial Distribution & Discrete Random Variables2h 55m
- 6. Normal Distribution & Continuous Random Variables1h 48m
- 7. Sampling Distributions & Confidence Intervals: Mean2h 8m
- 8. Sampling Distributions & Confidence Intervals: Proportion1h 20m
- 9. Hypothesis Testing for One Sample2h 23m
- 10. Hypothesis Testing for Two Samples3h 25m
- 11. Correlation1h 6m
- 12. Regression1h 4m
- 13. Chi-Square Tests & Goodness of Fit1h 30m
- 14. ANOVA1h 4m
1. Introduction to Statistics
Intro to Collecting Data
Struggling with Statistics for Business?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A regional store manager wants to test whether increasing store hours increases profits, so they randomly select half of their locations to stay open an extra hour later in the evenings and compare profits between stores at the end of the month. They notice that stores open later saw higher profits on average. Is this an experiment or an observational study? Can they determine the extra hours caused the increase in sales?
A
Observational study; no
B
Experiment; yes
C
Observational study; yes
D
Experiment; no

1
Step 1: Understand the difference between an experiment and an observational study. An experiment involves actively manipulating one or more variables (e.g., increasing store hours) and observing the effect on another variable (e.g., profits). In contrast, an observational study involves observing and measuring variables without manipulation.
Step 2: Identify the key elements of the scenario. The manager randomly selects half of the stores to stay open an extra hour, which is an active manipulation of the store hours. This indicates that the study is an experiment, not an observational study.
Step 3: Consider whether causation can be determined. In an experiment, random assignment helps control for confounding variables, allowing the researcher to infer causation. Since the manager randomly assigned stores to the treatment (extra hour), they can reasonably conclude that the extra hours caused the increase in profits.
Step 4: Eliminate incorrect options. 'Observational study' is incorrect because the study involves manipulation of store hours. 'Experiment; no' is incorrect because causation can be inferred due to random assignment.
Step 5: Conclude that the correct answer is 'Experiment; yes,' as the study is an experiment and causation can be determined due to the random assignment of the treatment.
Watch next
Master Introduction to Collecting Data with a bite sized video explanation from Patrick
Start learningRelated Videos
Related Practice
Multiple Choice