Statistics

1.In the attached essay the CEO of Coca-Cola argues that soft drinks should not be subject to special taxes simply because they are high in calories. While Americans have increased their caloric intake, he argues, they also have become more sedentary. “It’s not just about calories in. It’s also about calories out.” Since soft drinks contribute 5.5% of US calories, he fails to understand why soft drinks are being targeted when 94.5% of caloric intake comes from other foods and beverages. He points out that the average caloric content of soft drinks has dropped by nearly 25% thanks to diet/light drinks like Diet Coke. Common snacks, breakfast foods and most desserts have even more calories. And while obesity rates have skyrocketed, soft drink sales have decreased by 10% from 2000 to 2008.
Which of the author’s arguments against a tax on soft drinks are valid? There are at least two to three good points the author makes which might hold sway with legislators! Which of the author’s arguments against a tax on soft drinks are specious? There are at least 3-4 points that legislators of any intelligence would not find convincing! For example, what is wrong with the following argument: “Will a soft drink tax change behavior? Two states currently have a tax on sodas-West Virginia and Arkansas-and they are among the states with the highest rates of obesity in the nation.”

2. Gold has been touted through history as a hedge against inflation, yet few want to hold gold in their safe deposit boxes. What are some of the issues that make gold’s investment risk something that most avoid? What are some of the elements (not Au, but market elements) that generate volatility in the gold market? Please review the attached Economist Espresso article to get started.

3. The five-step hypothesis testing process. Here are the five steps:
Step 1: State null and alternate hypotheses
Step 2: Select a level of significance
Step 3: Identify the test statistic
Step 4: Formulate a decision rule
Step 5: Take a sample, arrive at a decision
One of the first challenges is stating the null and alternate hypotheses. Once that’s done you have to guard against Type I and II errors. What are some of the problems that might result from either a Type I or II error?