Confidence Interval Estimation

CHAPTER 9
CONFIDENCE INTERVAL ESTIMATION
MULTIPLE CHOICE QUESTIONS
In the following multiple-choice questions, please circle the correct answer.
1. The confidence interval for a proportion is based on the assumption of a large
sample size. rule of thumb for chec!ing the validit" of this assumption is if
, #1 $, , and #1 $
L L U U
np n p np n p
are all greater than what value%
a. &
b. n
c. '
d. (
e. )
ANSWER: e
'. *hen the samples we want to compare are paired in some natural wa", such as
pretest+posttest for each person or husband+wife pairs, a more appropriate form of
anal"sis is to not compare two separate variables, but their .
a. difference
b. sum
c. ratio
d. total
e. product
ANSWER: a
(. Confidence intervals are a function of which of the following three things%
a. The population, the sample, and the standard deviation
b. The sample, the variable of interest, and the degrees of freedom
c. The data in the sample, the confidence level, and the sample size
d. The sampling distribution, the confidence level, and the degrees of freedom
e. The mean, the median, and the mode
ANSWER: c
1,)
Chapter -
.. The chi-square and F distributions are used primaril" to ma!e inferences about
population ///////////.
a. means
b. variances
c. medians
d. modes
e. proportions
ANSWER: b
). If "ou increase the confidence level, the confidence interval .
a. decreases
b. increases
c. sta"s the same
d. ma" increase or decrease, depending on the sample data
ANSWER: b
0. random sample allows us to use1
a. the rules of probabilities
b. the rules of large numbers
c. the laws of parameters
d. the laws of distributions
e. the laws of gravit"
ANSWER: a
2. 3uppose there are )&& accounts in a population. 4ou sample )& of them and find
a sample total of 5),&&&. *hat would be "our estimate for the population total%
a. 5),&&&
b. 5)&,&&&
c. 5')&,&&&
d. 5',)&&,&&&
e. 6one of the above
ANSWER: b
,. 3uppose there are .&& accounts in a population. 4ou sample )& of them and find
a sample mean of 5)&&. *hat would be "our estimate for the population total%
a. 5),&&&
b. 5)&,&&&
c. 5')&,&&&
d. 5',)&&,&&&
e. 6one of the above
ANSWER: b
1,0
Confidence Interval Estimation
-. *hen we replace

with the sample standard deviation #s$, we introduce a new

source of variabilit" and the sampling distribution becomes the .
a. t distribution
b. F distribution
c. chi-square distribution
d. robust distribution
ANSWER: a
1&. nother commonl" used random mechanism, besides a simple random sample, is
called1
a. interval estimation
b. a random h"pothesis test
c. a randomized e7periment
d. a nuisance sample
ANSWER: c
11. If the odds of a horse winning a race are ' to 1, then the probabilit" of this horse
winning the race is .
a. 1+.
b. 1+(
c. 1+'
d. '+(
e. '+1&
ANSWER: d
1'. There are, generall" spea!ing, two t"pes of statistical inference. The" are1
a. sample estimation and population estimation
b. confidence interval estimation and h"pothesis testing
c. interval estimation for a mean and interval estimation for a proportion
d. independent sample estimation and dependent sample estimation
e. none of the above
ANSWER: b
1(. The t distribution has degrees of freedom.
a. n
b. '
c. 1&
d. n 8 1
e. trillion
ANSWER: d
1,2
Chapter -
1.. If "ou are constructing a confidence interval for a single mean, the confidence
interval will with an increase in the sample size.
a. decreases
b. increases
c. sta"s the same
d. ma" increase or decrease, depending on the sample data
ANSWER: a
1). s the sample size increases, the t distribution becomes more similar to the
// distribution.
a. normal
b. e7ponential
c. F
d. chi-square
e. binomial
ANSWER: a
10. parameter, such as

, is sometimes referred to as a //////// parameter,

because man" times we need its value even though it is not the parameter of
primar" interest.
a. special
b. random
c. nuisance
d. independent
e. dependent
ANSWER: c
12. *hen "ou calculate the sample size for a proportion, "ou use an estimate for the
population proportion #
est
p
$. conservative value for n can be obtained b" using
est
p
9 .
a. &.&
b. &.&)
c. &.1&
d. &.)&
e. 1.&&
ANSWER: d
1,,
Confidence Interval Estimation
QUESTIONS 18 THROUGH 2 ARE !ASED ON THE FOLLOWING INFORMATION:
The following values have been calculated using the T:I3T and TI6; functions in
E7cel. These values come from a t distribution with 1) degrees of freedom.
These values represent the probabilit" to the right of the given positive values.
Value t probability
1.00 0.1636
1.20 0.1209
1.40 0.0872
These values represent the t value for a given probabilit".
Probability t value
0.20 1.3178
0.10 1.7109
0.05 2.0639
1,. *hat is the probabilit" of a t-value smaller 1.&&%
a. &.1'&-
b. &.10(0
c. &.,(0.
d. &.,2-1
ANSWER: c
1-. *hat is the probabilit" of a t-value larger than 1.'&%
a. &.&,2'
b. &.1'&-
c. &.10(0
d. &.'&&&
ANSWER: b
'&. *hat is the probabilit" of a t-value between 81..& and <1..&%
a. &.2),'
b. &.,')0
c. &.-1',
d. &.-)&&
ANSWER: b
1,-
Chapter -
'1. *hat would be the t-value where &.&) of the values are in the upper tail%
a. <1.&&&
b. <1.(1,
c. <1.211
d. <'.&0.
ANSWER: c
''. *hat would be the t-values where &.1& of the values are in both tails #sum of both
tails$%
a. 81.&&&, <1.&&&
b. 81.(1,, <1.(1,
c. 81.211, <1.211
d. 8'.&0., <'.&0.
ANSWER: c
'(. *hat would be the t-values where &.-) of the values would fall within this interval%
a. 81.&&&, <1.&&&
b. 81.(1,, <1.(1)
c. 81.211, <1.211
d. 8'.&0., <'.&0.
ANSWER: d
QUESTIONS 2" THROUGH 29 ARE !ASED ON THE FOLLOWING INFORMATION:
The following values have been calculated using the T:I3T and TI6; functions in
E7cel. These values come from a t distribution with 1) degrees of freedom.
These values represent the probabilit" to the right of the given positive values.
Value t probability
0.95 0.1786
1.15 0.1341
1.20 0.1244
These values represent the t value for a given probabilit".
Probability t value
0.20 1.341
0.15 1.517
0.10 1.753
'.. *hat is the probabilit" of a t-value smaller than 1.'&%
1-&
Confidence Interval Estimation
a. &.,2)0
b. &.,0)-
c. &.1(.1
d. &.1'..
ANSWER: a
'). *hat is the probabilit" of a t-value larger than 1.1)%
a. &.12,0
b. &.1(.1
c. &.1'..
d. &.1)&&
ANSWER: b
'0. *hat is the probabilit" of a t-value between 8&.-) and <&.-)%
a. &.12,0
b. &.()2'
c. &.0.',
d. &.,'1.
ANSWER: c
'2. *hat would be the t-value where &.&2) of the values are in the upper tail%
a. <1.&&&
b. <1.(.1
c. <1.)12
d. <1.2)(
ANSWER: c
',. *hat would be the t-values where &.,& of the values would fall within this interval%
a. 81.&&&, <1.&&&
b. 81.(.1, <1.(.1
c. 81.)12, <1.)12
d. 81.2)(, <1.2)(
ANSWER: b
'-. *hat would be the t-values where &.1& of the values are in both tails #sum of both
tails$%
1-1
Chapter -
a. 81.&&&, <1.&&&
b. 81.(.1, <1.(.1
c. 81.)12, <1.)12
d. 81.2)(, <1.2)(
ANSWER: d
1-'
Confidence Interval Estimation
TEST QUESTIONS
(&. 4ou are told that a random sample of 1)& people from Iowa has been given
cholesterol tests, and 0& of these people had levels over the =safe> count of '&&.
Construct a -)? confidence interval for the population proportion of people in
Iowa with cholesterol levels over '&&.
ANSWER:

@ 1)&, 0&+1)& ..& n p = = =
@ @ @ #1 $ + &..& 1.-0 #..&$#.0&$ +1)& &..& &.&2,. p Z p p n = =
Aower limit 9 &.('10, and upper limit 9 &..2,.
(1. 4ou are tr"ing to estimate the average amount a famil" spends on food during a
"ear. In the past, the standard deviation of the amount a famil" has spent on food
during a "ear has been appro7imatel" 51'&&. If "ou want to be --? sure that "ou
have estimated average famil" food e7penditures within 50&, how man" families
do "ou need to surve"%
ANSWER:
. est

91'&&, z-multiple 9 '.)2), B 9 0& . The sample size for a mean is given b"
' '
'.)2) 1'&&
'0)(
0&
est
z multiple
n
B

= =


;
('. 4ou have been assigned to determine whether more people prefer Co!e to Bepsi.
ssume that roughl" half the population prefers Co!e and half prefers Bepsi.
Cow large a sample would "ou need to ta!e to ensure that "ou could
estimate, with -)? confidence, the proportion of people preferring Co!e within
(? of the actual value%
ANSWER:
. est
p
9 &.)&, z-multiple 9 1.-0, B 9 &.&(. The sample size for a proportion is given
b"
' '
. .
1.-0
#1 $ #&.)&$#&.)&$ 1&0,
&.&(
est est
z multiple
n p p
B

= =


;
QUESTIONS THROUGH # ARE !ASED ON THE FOLLOWING INFORMATION:
mar!eting research consultant hired b" Coca-Cola is interested in determining the
proportion of customers who favor Co!e over other soft drin!s. random sample of .&&
consumers was selected from the mar!et under investigation and showed that )(?
favored Coca-Cola over other brands.
1-(
Chapter -
((. Compute a -)? confidence interval for the true proportion of people who favor
Co!e. :o the results of this poll convince "ou that a majority of people favors
Co!e%
ANSWER:
&.)( &.&.,- 9 #&..,11, &.)2,-$.
3ince confidence interval ranges from .,? to )2.-?, it is difficult to conclude
that a maDorit" of people favors Co!e. It could be below )&?.
(.. 3uppose ',&&& #not .&&$ people were polled and )(? favored Co!e. *ould "ou
now be convinced that a majority of people favor Co!e% *h" might "our answer
be different than in Euestion ((%
ANSWER:
&.)( &.&'1- 9 #&.)&,1, &.))1-$.
In this case the -)? confidence interval is entirel" above )&?, the data is now
more convincing than it was previousl".
(). Cow man" people would have to be surve"ed to be -)? confident that "ou can
estimate the fraction of people who favor Coca-Cola within 1?%
ANSWER:
-,)0-..( or -,)2&.
QUESTIONS $ AND % ARE !ASED ON THE FOLLOWING INFORMATION:
The emplo"ee benefits manager of a medium size business would li!e to estimate the
proportion of full-time emplo"ees who prefer adopting plan of three available health
care plans in the coming annual enrollment period. reliable frame of the compan"Fs
emplo"ees and their tentative health care preferences are available. Gsing E7cel, the
manager chose a random sample of size )& from the frame. There were 12 emplo"ees in
the sample who preferred plan .
(0. Construct a --? confidence interval for the proportion of compan" emplo"ees
who prefer plan . ssume that the population consists of the preferences of all
emplo"ees in the frame.
ANSWER:
@ )&, 12 + )& &.(. n p = = =
@ @ @ #1 $ + &.(. '.)2) #&.(.$#&.00$ + )& &.(. &.12') p Z p p n = =
lower limit 9 &.102), upper limit 9 &.)1')
1-.
Confidence Interval Estimation
(2. Interpret the --? confidence interval constructed in Euestion (0.
ANSWER:
*e are --? confident that the proportion of all emplo"ees who prefer plan is
between &.102) and &.)1').
QUESTIONS 8 THROUGH "& ARE !ASED ON THE FOLLOWING INFORMATION:
E-Hart is interested in comparing its male and female customers. E-Hart would li!e to
!now if its female charge customers spend more mone", on average, than its male charge
customers. The" have collected random samples of ') female customers and '' male
customers. In average, women charge customers spend 51&'.'( and men charge
customers spend 5,0..0. 3ome information are shown below.
Summary statistics for two samples
Jemale Hale
3ample sizes ') ''
3ample means 1&'.'( ,0..0
3ample standard deviations -(.(-( )-.0-)
Confidence interval for difference between means
3ample mean difference 1).22
Booled standard deviation 2-..00
3td error of difference '(.'(
(,. Gsing a t-value of '.&1., calculate a -)? confidence interval for the difference
between the average female purchase and the average male purchase. *ould "ou
conclude that there is a significant difference between females and males in this
case% E7plain.
ANSWER:
1).22 .0.2,) 9 #-(1.&1), 0'.)))$. 3ince the range includes &, there does not
appear to be a significant difference between the means of the two groups.
(-. *hat are the degrees of freedom for the t-statistic in this calculation% E7plain
how "ou would calculate the degrees of freedom in this case.
ANSWER:
n1 < n' 8 ' 9 .)
1-)
Chapter -
.&. *hat is the assumption in this case that allows "ou to use the pooled standard
deviation for this confidence interval%
ANSWER:
In order to use the pooled standard deviation for this confidence interval, we must
assume that the two populations standard deviations are equal #
1 '
= $.
QUESTIONS "1 AND "2 ARE !ASED ON THE FOLLOWING INFORMATION:
compan" emplo"s two shifts of wor!ers. Each shift produces a t"pe of gas!et where
the thic!ness is the critical dimension. The average thic!ness and the standard deviation
of thic!ness for shift 1, based on a random sample of .& gas!ets, are 1&.,) mm and &.10
mm, respectivel". The similar figures for shift ', based on a random sample of (&
gas!ets, are 1&.-& mm and &.1- mm. Aet
1 '
be the difference in thic!ness between
shifts 1 and ', and assume that the population variances are equal.
.1. Construct a -)? confidence interval for
1 '
.
ANSWER:
1 1 1
.&, 1&.,), &.10 n X s = = =
' ' '
(&, 1&.-&, &.1- n X s = = =
The pooled standard deviation is
' '
1 1 ' '
1 '
# 1$ # 1$
'
p
n s n s
s
n n
+
=
+
9 &.12(.
1 '
1 1
1 '
# $ &.&) 1.--))#&.12(.$#&.'.1)$ &.&) &.&,(0
p n n
X X t s + = =

Aower limit 9 -&.1((0, and upper limit 9 &.&((0.

.'. Kased on "our answer to Euestion .1, are "ou convinced that the gas!ets from
shift ' are, on average, wider than those from shift 1% *h" or wh" not%
ANSWER:
The confidence interval e7tends from a negative number #indicating shift '
thic!ness is larger$ to a positive number #indicating shift ' thic!ness is smaller$.
3o we are not absolutel" sure which mean is greater.
QUESTIONS " AND "" ARE !ASED ON THE FOLLOWING INFORMATION:
sample of - production managers with over 1) "ears of e7perience has an average
salar" of 521,&&& and a sample standard deviation of 51,,&&&.
.(. 4ou can be -)? confident that the mean salar" for all production managers with
at least 1) "ears of e7perience is between what two numbers #the t-statistic with ,
degrees of freedom is '.(&0$% *hat assumption are "ou ma!ing about the
distribution of salaries%
1-0
Confidence Interval Estimation
ANSWER:
521,&&& 51(,,(0 9 #5)2,10., 5,.,,(0$. The assumption is that the population is
normal or near normal. This is particularl" important since the sample size is so
small #-$. Cowever, the t distribution is rather robust to violations of normalit".
... *hat sample size would be needed to ensure that we could estimate the true mean
salar" of all production managers with more than 1) "ears of e7perience and have
onl" ) chances in 1&& of being off b" more than 50&&%
ANSWER:
0-.1, or 2&
QUESTIONS "# THROUGH #& REQUIRE THE USE OF E'CEL:
.). Compute
1& 1&
# 1.)& 1.&&$, where P t t
has a t-distribution with 1& degrees of
freedom.
ANSWER:
&.2.2(&
.0. Compute
1&& 1&&
# 1.)& 1.&&$, where P t t
has a t-distribution with 1&& degrees of
freedom.
ANSWER:
&.22120
.2. Compute
# 1.)& 1.&&$, P Z
where Z is a standard normal random variable.
ANSWER:
&.22.).
.,. Compare the result of Euestion .2 to the results obtained in Euestions .) and .0.
Cow do "ou e7plain the difference in these probabilities%
ANSWER:
The variance of t with a small degree of freedom is larger than a t with a large
degree of freedom, which is larger than for a Z. This e7plains wh" the =between>
probabilities in Euestions .), .0, and .2 increase.
.-. Jind the 2)
th
percentile of the t-distribution with ') degrees of freedom.
ANSWER:
&.(''12
1-2
Chapter -
)&. Jind the 2)
th
percentile of the t-distribution with ) degrees of freedom.
ANSWER:
&.((02'
QUESTIONS #1 a(d #2 ARE !ASED ON THE FOLLOWING INFORMATION:
sample of .& countr" C: recordings of *illie 6elson has been e7amined. The average
pla"ing time of these recordings is )1.( minutes, and the standard deviation is ).,
minutes.
)1. Construct a -)? confidence interval for the mean pla"ing time of all *illie
6elson recordings.
ANSWER:
n 9 1&,
X
9 ).&&&, s 9 1)&&&
# + $ )1.( '.&''2#).,+ .&$ )1.( 1.,)) X t s n = =
Aower limit 9 .-...), and upper limit 9 )(.1))
)'. Interpret the confidence interval "ou constructed.
ANSWER:
*e are -)? confident that the mean pla"ing time of all *illie 6elson recordings
is between. .-...) and )(.1)) minutes.
QUESTIONS # AND #" ARE !ASED ON THE FOLLOWING INFORMATION:
department store is interested in the average balance that is carried on its storeFs credit
card. sample of .& accounts reveals an average balance of 51,')& and a standard
deviation of 5()&.
)(. Jind a -)? confidence interval for the mean account balance on this storeFs credit
card #the t-statistic with (- degrees of freedom is '.&'$.
ANSWER:
51,')& 5111.2- 9 #51,1(,.'1, 51,(01.2-$.
).. *hat sample size would be needed to ensure that we could estimate the true mean
account balance and have onl" ) chances in 1&& of being off b" more than 51&&%
ANSWER:
.-.-, or )&.
1-,
Confidence Interval Estimation
QUESTIONS ## AND #$ ARE !ASED ON THE FOLLOWING INFORMATION:
mar!et research consultant hired b" Co!e Classic Compan" is interested in
estimating the difference between the proportions of female and male customers who
favor Co!e Classic over Bepsi Cola in Chicago. random sample of '&& consumers
from the mar!et under investigation showed the following frequenc" distribution.
Hale Jemale
Co!e 2' (, 11&
Bepsi ), (' -&
1(& 2& '&&

)). Construct a -)? confidence interval for the difference between the proportions of
male and female customers who prefer Co!e Classic over Bepsi Cola.
ANSWER:
1 '
number of males 9 1(&, n 9 number of females 9 2& n =
1
@
proportion of males who favor Co!e over Bepsi 9 2'+1(& 9 &.))(, P =
'
@
proportion of females who favor Co!e over Bepsi 9 &.).'- P =

1 1 ' '
1 '
1 '
@ @ @ @ #1 $ #1 $
@ @ # $
p p p p
SE p p
n n

= +
9 &.&2(,
1 ' 1 '
@ @ @ @
# $ # $ &.&1&- 1.-0#.&2(,$ &.&1&- &.1..0 P P Z SE P P = =
Aower limit 9 -&.1((2, and upper limit 9 &.1)))
)0. Interpret the constructed confidence interval.
ANSWER:
*e are -)? confident that the population difference between these proportions is
between 81(.(2? and 1).))?.
QUESTIONS #% THROUGH $& ARE !ASED ON THE FOLLOWING INFORMATION:
The percent defective for parts produced b" a manufacturing process is targeted at .?.
The process is monitored dail" b" ta!ing samples of sizes n 9 10& units. 3uppose that
toda"Fs sample contains 1. defectives.
)2. :etermine a -)? confidence interval for the proportion defective for the process
toda".
ANSWER:
&.&,2) &.&.(, 9 #&.&.(2, &.1(1($.
1--
Chapter -
),. Kased on "our answer to Euestion )2, is it still reasonable to thin! the overall
proportion defective produced b" toda"Fs process is actuall" the targeted .?%
E7plain "our reasoning.
ANSWER:
6o, since .? falls outside of this range.
)-. The confidence interval in Euestion )2 is based on the assumption of a large
sample size. Is this sample size sufficientl" large in this e7ample% E7plain how
"ou arrived at "our answer.
ANSWER:
4es. Kecause
, #1 $, , and #1 $
L L U U
np n p np n p
are all greater than ).&.
0&. Cow man" units would have to be sampled to be -)? confident that "ou can
estimate the fraction of defective parts within '? #using the information from
toda"Fs sample$%
ANSWER:
200..& or 202.
QUESTIONS $1 AND $2 ARE !ASED ON THE FOLLOWING INFORMATION:
uditors of Independent Kan! are interested in comparing the reported value of all 122)
customer saving account balances with their own findings regarding the actual value of
such assets. Lather than reviewing the records of each savings account at the ban!, the
auditors randoml" selected a sample of 1&& savings account balances from the frame.
The sample mean and sample standard deviations were 5)&).2) and (0&.-), respectivel".
01. Construct a -&? confidence interval for the total value of all savings account
balances within this ban!. ssume that the population consists of all savings
account balances in the frame.
ANSWER:
122), 1&&, )&).2), (0&.-) N n X s = = = =
1.00&.# + $ 122)#)&).2)$ 1.00&.#122) (0&.-)+ 1&&$ NX Ns n =
,-22&0.') 1&0(2-.)) =
9 #521-,('0.2&, 51,&&.,&,).,$
0'. Interpret the -&? confidence interval constructed in Euestion 01.
ANSWER:
*e are -&? confident that the total balance of all 122) savings account balances
within the ban! are between 52-1,('2 and 51,&&.,&,0.
'&&
Confidence Interval Estimation
QUESTIONS $ AND $" ARE !ASED ON THE FOLLOWING INFORMATION:
real estate agent has collected a random sample of .& houses that were recentl" sold in
Mrand Lapids, Hichigan. 3he is interested in comparing the appraised value and recent
selling price #in thousands of dollars$ of the houses in this particular mar!et. The values
of these two variables for each of the .& randoml" selected houses are shown below.
House Value Price House Value Price
1 140.93 140.24 21 136.57 135.35
2 132.42 129.89 22 130.44 121.54
3 118.30 121.14 23 118.13 132.98
4 122.14 111.23 24 130.98 147.53
5 149.82 145.14 25 131.33 128.49
6 128.91 139.01 26 141.10 141.93
7 134.61 129.34 27 117.87 123.55
8 121.99 113.61 28 160.58 162.03
9 150.50 141.05 29 151.10 157.39
10 142.87 152.90 30 120.15 114.55
11 155.55 157.79 31 133.17 139.54
12 128.50 135.57 32 140.16 149.92
13 143.36 151.99 33 124.56 122.08
14 119.65 120.53 34 127.97 136.51
15 122.57 118.64 35 101.93 109.41
16 145.27 149.51 36 131.47 127.29
17 149.73 146.86 37 121.27 120.45
18 147.70 143.88 38 143.55 151.96
19 117.53 118.52 39 136.89 132.54
20 140.13 146.07 40 106.11 114.33
0(. Gsing the sample data, generate a -)? confidence interval for the mean
difference between the appraised values and selling prices of the houses sold in
Mrand Lapids.
ANSWER:
*e applied the paired sample anal"sis using .&, 1.01', 0.2-.
D D
n X s = = = ,
where1 : 9 :ifference 9 ppraised value 8 selling price.
# + $ 1.01' '.&''2#0.2-.+ .&$ 1.01' '.12(
D D
X t s n = =
Aower limit 9 -(.2,), and Gpper limit 9 &.)01 #in thousands of dollars$
0.. Interpret the constructed confidence interval for the real estate agent.
ANSWER:
*e are -)? confident that the actual mean difference between the appraised
values and selling prices of all the houses sold in Mrand Lapids is between -5(2,)
and 5)01.
'&1
Chapter -
QUESTIONS $# THROUGH $9 REQUIRE THE USE OF E'CEL:
0). Compute
1) 1)
# '.&$, where P t t
has a t-distribution with 1) degrees of freedom.
ANSWER:
&.&(1-2
00. Compute
1)& 1)&
# '.&$, where P t t
has a t-distribution with 1)& degrees of freedom.
ANSWER:
&.&'(0)
02. Cow do "ou e7plain the difference between the results obtained in Euestions 0)
and 00%
ANSWER:
The smaller the degrees of freedom, the higher the variance of t, and so the larger
the tail probabilities are.
0,. Compute
# '.&$, P Z
where Z is a standard normal random variable.
ANSWER:
&.&''2)
0-. Compare the results of Euestion 0, to the results obtained in Euestions 0) and 00.
Cow do "ou e7plain the difference in these probabilities%
ANSWER:
Jirst, the variance of t with a small degree of freedom is larger than a t with a
large degree of freedom, which is larger than for a Z. This e7plains wh" the
probabilities in Euestions 0), 00, and 0, increases. 3econd, when the sample size
is large, the degrees of freedom of t are largeN and that the t distribution and the
standard normal distribution are practicall" indistinguishable. This e7plains wh"
the probabilities in Euestions 00 and 0, are close.
QUESTIONS %& THROUGH %2 ARE !ASED ON THE FOLLOWING INFORMATION:
3enior management of a consulting services firm is concerned about a growing decline in
the firmFs wee!l" number of billable hours. The firm e7pects each professional emplo"ee
to spend at least .& hours per wee! on wor!. In an effort to understand this problem
better, management would li!e to estimate the standard deviation of the number of hours
their emplo"ees spend on wor!-related activities in a t"pical wee!. Lather than
reviewing the records of all the firmFs full-time emplo"ees, the management randoml"
selected a sample of size )& from the available frame. The sample mean and sample
standard deviations were .,.) and 2.) hours, respectivel".
'&'
Confidence Interval Estimation
2&. Construct a --? confidence interval for the standard deviation of the number of
hours this firmFs emplo"ees spend on wor!-related activities in a t"pical wee!.
ANSWER:
)&, .,.), 2.) n X s = = =
Aower limit 9
'
+ '
1 + .-#2.)$ + 2,.'(&) n s

= 9).-(0
Gpper limit 9
'
1 + '
1 + .-#2.)$ + '2.'.-. 1&.&)2 n s

= =
21. Interpret the --? confidence interval constructed in Euestion 2&.
ANSWER:
*e are --? confident that the population standard deviation is between ).-(0 and
1&.&)2.
2'. Miven the target range of .& to 0& hours of wor! per wee!, should senior
management be concerned about the number of hours their emplo"ees are
currentl" devoting to wor!% E7plain wh" or wh" not.
ANSWER:
The best guess for the population mean is .,.) hours per wee!, and about -)? of
all emplo"ees are within ' standard deviations of this, where we are almost sure
#--? sure$ that this standard deviation is between ).- and 1&.1. Kut even if the
standard deviation is onl" ).-, then .,.) ' standard deviations will produce the
range (0.2 to 0&.(. Ha"be management should be concerned.
QUESTIONS % THROUGH %# REQUIRE THE USE OF E'CEL:
2(. Compute
'& '&
# &.-)$, where P t t
has a t-distribution with '& degrees of
freedom.
ANSWER:
Kecause of the s"mmetr" of the t distribution, this left-hand tail probabilit" can be
calculated e7actl" li!e right-hand tail. The answer is &.1202(.

2.. Compute
' '
# &.-)$, where P t t has a t-distribution with ' degrees of freedom.
ANSWER:
Kecause of the s"mmetr" of the t distribution, this left-hand tail probabilit" can be
calculated e7actl" li!e right-hand tail. The answer is &.''11-.
'&(
Chapter -
2). Cow do "ou e7plain the difference between the results obtained in Euestions 2(
and 2.%
ANSWER:
The larger the degrees of freedom, the lower the variance of t, so the smaller the
tail probabilities are. This e7plains wh" the probabilit" in Euestion 2( is smaller
than that in Euestion 2..
QUESTIONS %$ AND %% ARE !ASED ON THE FOLLOWING INFORMATION:
sample of 1& qualit" control managers with over 1) "ears of e7perience has an average
salar" of 5).,&&& and a standard deviation of 51),&&&.
20. 4ou can be -)? confident that the mean salar" for all qualit" control managers
with at least 1) "ears of e7perience is between what two numbers% *hat
assumptions are "ou ma!ing about the distribution of salaries%
ANSWER:
n 9 1&,
X
9 ).&&&, s 9 1)&&&
# + $ ).&&& '.'0''#1)&&&+ 1&$ ).&&& 1&2(&.))2 X t s n = =
Aower limit 9 .(,'0-...(, and upper limit 9 0.,2(&.))2
*e must assume that the population distribution of salaries is normal, especiall"
since the sample size is so small.
22. *hat size sample would be needed to ensure that we could estimate the true mean
salar" of all qualit" control managers with more than 1) "ears of e7perience and
have onl" ' chances in 1&& of being off b" more than 5,&&%
ANSWER:
. est

91)&&&, z-multiple 9 '.('0, B 9 ,&&

The appro7imate sample size required to produce a -,? confidence interval for
the mean is given b"
' '
'.('0 1)&&&
1-&(
,&&
est
z multiple
n
B

= =


;
QUESTIONS %8 THROUGH 8& ARE !ASED ON THE FOLLOWING INFORMATION:
E-Hart is interested in comparing customer who used its own charge card with those who
use other t"pes of credit cards. E-Hart would li!e to !now if customers who use the E-
Hart card spend more mone" per visit, on average, than customers who use some other
t"pe of credit card. The" have collected information on a random sample of (, charge
customers and the data is presented below. In average, the person using a E-Hart card
'&.
Confidence Interval Estimation
spends 51-'.,1 per visit and customers using another t"pe of card spend 51&...2 per
visit. Gse the information below to answer the following questions.
Summary statistics for two samples
E-Hart Ither Charges
3ample sizes 1( ')
3ample means 1-'.,1 1&...2
3ample standard deviations 11).'.( 21.1(-
Confidence interval for difference between means
3ample mean difference ,,.(.
Booled standard deviation ,,.('(
3td error of difference (&.'&1
2,. Gsing a t-value of '.&'(, calculate a -)? confidence interval for the difference
between the average E-Hart charge and the average charge on another t"pe of
credit card. *ould "ou conclude that there is a significant difference between the
two t"pes of customers in this case% E7plain.
ANSWER:
,,.(. 01.&-00 9 <'2.'.(. 8 <1.-..(00. 3ince the range does not include &,
there appears to be a significant difference between the means of the two groups.
In this case, it appears as though the E-Hart charge card holders spend more
mone" than those who use other t"pes of charge cards.
2-. *hat are the degrees of freedom for the t-statistic in this calculation% E7plain
how "ou would calculate the degrees of freedom in this case.
ANSWER:
n1 < n' 8 ' 9 (0
,&. *hat is the assumption in this case that allows "ou to use the pooled standard
deviation for this confidence interval%
ANSWER:
In order to use the pooled standard deviation for this confidence interval, we must
assume that the two populations standard deviations are equal #
1 '
= $.
'&)
Chapter -
QUESTIONS 81 THROUGH 8" ARE !ASED ON THE FOLLOWING INFORMATION:
The average annual household income levels of citizens of selected G.3. cities are shown
below.
,1. Gse E7cel to obtain a simple random sample of size 1& from this frame.
ANSWER:
I used 3tatBroFs Menerate Landom 3amples to generate a sample of size 1&, then
used the ;AIIOGB function to get the corresponding incomes. The following
sample is obtained1
Cit" Inde7 Income
)& 01,,&&
1. .0,'&&
. )&,,&&
)0 0).)&&
., )1,)&&
.- )(,)&&
, 0(,'&&
11 22,0&&
(, 02,.&&
)' )2,.&&
'&0
City Househol City Househol City Househol
!"e# !"co$e !"e# !"co$e !"e# !"co$e
1 %54&300 21 %53&500 41 %61&500
2 %61&800 22 %45&600 42 %53&000
3 %61&400 23 %70&100 43 %51&000
4 %50&800 24 %108&700 44 %55&600
5 %56&200 25 %46&400 45 %51&600
6 %48&300 26 %56&700 46 %57&200
7 %61&600 27 %59&100 47 %54&300
8 %63&200 28 %46&300 48 %51&500
9 %55&200 29 %52&900 49 %53&500
10 %58&000 30 %56&300 50 %61&800
11 %77&600 31 %67&300 51 %44&800
12 %47&600 32 %63&800 52 %57&400
13 %62&700 33 %70&600 53 %48&100
14 %46&200 34 %49&800 54 %52&700
15 %64&300 35 %51&300 55 %57&400
16 %56&000 36 %56&600 56 %65&500
17 %53&400 37 %49&600 57 %59&600
18 %56&800 38 %67&400 58 %62&000
19 %51&200 39 %53&700 59 %49&700
20 %59&000 40 %48&700 60 %54&400
Confidence Interval Estimation
,'. Gsing the sample generated in Euestion ,1, construct a -)? confidence interval
for the mean average annual household income level of citizens in the selected
G.3. cities. ssume that the population consists of all average annual household
income levels in the given frame.
ANSWER:
1&, n =
)-, .-&, -, .(-.,&( X s = =
'.'0''# + $ )-, .-& '.'0''#-, .(-.,&(+ 1&$ )-, .-& 0, 2)'.-)01 X s n = =
Aower limit 9 )',2(2.&.(-, upper limit 9 00,'.'.-)01
,(. Interpret the -)? confidence interval constructed in Euestion ,'.
ANSWER:
*e are -)? confident that the average of all incomes is between 5)',2(2 and
500,'.(.
,.. :oes the -)? confidence interval contain the actual population mean% If not,
e7plain wh" not. *hat proportion of man" similarl" constructed confidence
intervals should include the true population mean value%
ANSWER:
This confidence interval easil" captures the true population mean of 5)2,&.(.
ppro7imatel" -)? of the confidence intervals constructed in this wa" should
contain the true population mean.
QUESTIONS 8# THROUGH 91 ARE !ASED ON THE FOLLOWING INFORMATION:
The personnel department of a large corporation wants to estimate the famil" dental
e7penses of its emplo"ees to determine the feasibilit" of providing a dental insurance
plan. random sample of 1' emplo"ees reveals the following famil" dental e7penses #in
dollars$ for the "ear '&&1.
11) (2& ')& -( ).& '') 122 .') (1, 1,' '2) '',
,). Construct a -&? confidence interval estimate of the mean famil" dental e7penses
for all emplo"ees of this corporation.
ANSWER:
'&2
Chapter -
,0. *hat assumption about the population distribution must be made to answer
Euestion ,)%
ANSWER:
The population of dental e7penses must be appro7imatel" normall" distributed.
,2. Interpret the -&? confidence interval constructed in question ,).
ANSWER:
*e are -&? confident that the mean famil" dental e7penses for all emplo"ees of
this corporation is between 51--.'0 and 5(((.2..
,,. 3uppose "ou used a -)? confidence interval in Euestion ,). *hat would be "our
answer to Euestion ,)%
ANSWER:
'&,
Confidence Interval Estimation
,-. 3uppose the fourth value were )-( instead of -(. *hat would be "our answer to
Euestion ,,% *hat effect does this change have on the confidence interval%
ANSWER:
The additional 5)&& in dental e7penses, divided across the sample of 1', raises
the mean b" 5.1.02 and increases the standard deviation b" nearl" 51,.'&. The
interval width increases over 5'( in the process.
-&. Construct a -&? confidence interval estimate for the standard deviation of famil"
dental e7penses for all emplo"ees of this corporation.
ANSWER:
-1. Interpret the -&? confidence interval constructed in question -&.
ANSWER:
*e are -&? confident that the standard deviation for famil" dental e7penses for
all emplo"ees of this corporation is between 11&.01 and ''-.(,.
'&-
Chapter -
QUESTIONS 92 AND 9 ARE !ASED ON THE FOLLOWING INFORMATION:
n automobile dealer wants to estimate the proportion of customers who still own the
cars the" purchased si7 "ears ago. random sample of '&& customers selected from the
automobile dealerFs records indicates that ,, still own cars that were purchased si7 "ears
earlier.
-'. Construct a -)? confidence interval estimate of the population proportion of all
customers who still own the cars the" purchased si7 "ears ago
ANSWER:
@ @ #18 $ &...#&.)0$
@ &... 1.-0
'&&
p p
p Z
n
= 9 &... &.&0,,
Aower limit 9 &.(21', and upper limit 9 &.)&,,
-(. Cow can the result in Euestion -' be used b" the automobile dealer to stud"
satisfaction with cars purchased at the dealership%
ANSWER:
The dealer can infer that the proportion of all customers who still own the cars the"
purchased at the dealership 0 "ears earlier is somewhere between &(21' and &.)&,,
with a -)? level of confidence.
'1&
Confidence Interval Estimation
TRUE ) FALSE QUESTIONS
-.. The degrees of freedom for the t and chi-square distributions is a numerical
parameter of the distribution that defines the precise shape of the distribution.

ANSWER: T
-). *hen all possible samples of size n are drawn from an" population, then the
sampling distribution of the sample mean
X
is appro7imatel" normal provided
that n is reasonabl" large.
ANSWER: T
-0. The mean of the sampling distribution of the sample proportion
@ p
, when the
sample size n 9 1&& and the population proportion p 9 &.),, is ),.&.
ANSWER: F
-2. The standard error of the sampling distribution of the sample proportion
@ p
, when
the sample size n 9 )& and the population proportion p 9 &.'), is &.&&(2).
ANSWER: F
-,. In developing a confidence interval for the population standard deviation

, we
ma!e use of the fact that the sampling distribution of the sample standard
deviation S is not the normal distribution or the t distribution, but rather a right-
s!ewed distribution called the chi-square distribution, which #for this procedure$
has n 8 1 degrees of freedom.
ANSWER: T
--. s a general rule, the normal distribution is used to appro7imate the sampling
distribution of the sample proportion
@ p
onl" if the sample size n is greater than
(&.
ANSWER: F
1&&. In general, the paired-sample procedure is appropriate when the samples are
naturall" paired in some wa" and there is a reasonabl" large positive correlation
between the pairs. In this case, the paired-sample procedure ma!es more efficient
use of the data and generall" results in narrower confidence intervals.
ANSWER: T
'11
Chapter -
1&1. If the standard error of the sampling distribution of the sample proportion
@ p
is
&.&('. for samples of size '&&, then the population proportion must be &.(&.
ANSWER: F
1&'. If a random sample of size ')& is ta!en from a population, where it is !nown that
the population proportion p 9 &.., then the mean of the sampling distribution of
the sample proportion
@ p
is &.0&.
ANSWER: F
1&(. If two random samples of size .& each are selected independentl" from two
populations whose variances are () and .), then the standard error of the
sampling distribution of the sample mean difference,
' 1
X X , equals 1..1.'.
ANSWER: T
1&.. If two random samples of sizes (& and () are selected independentl" from two
populations whose means are ,) and -&, then the mean of the sampling
distribution of the sample mean difference,
' 1
X X , equals ).
ANSWER: F
1&). confidence interval is an interval estimate for which there is a specified degree
of certaint" that the actual value of the population parameter will fall within the
interval.
ANSWER: T
1&0. The -)? confidence interval for the population mean

, given that the sample

size n 9 .- and the population standard deviation

9 2, is 1.-0 X .
ANSWER: T
1&2. In order to construct a confidence interval estimate of the population mean

, the
value of

must be given.
ANSWER: F
1&,. The interval estimate 1,.) '.) was developed for a population mean when the
sample standard deviation S was 2.). Cad S equaled 1), the interval estimate
would be (2 ).&.
ANSWER: F
'1'
Confidence Interval Estimation
1&-. *e can form a confidence interval for the population total b" finding a
confidence interval for the population mean

in the usual wa", and then

multipl"ing each end point of the confidence interval b" the population size N.
ANSWER: T
11&. -&? confidence interval estimate for a population mean

is determined to be
2'., to 2-.0. If the confidence level is reduced to ,&?, the confidence interval for

becomes narrower.
ANSWER: T
111. In general, increasing the confidence level will narrow the confidence interval,
and decreasing the confidence level widens the interval.
ANSWER: F
11'. The upper limit of the -&? confidence interval for the population proportion p,
given that n 9 1&&N and
@ p
9 &.'& is &.'0),.
ANSWER: T
11(. The lower limit of the -)? confidence interval for the population proportion p,
given that n 9 (&&N and
@ p
9 &.1& is &.1((-.
ANSWER: F
11.. The t-distribution and the standard normal distribution are practicall"
indistinguishable as the degrees of freedom increase.
ANSWER: T
11). In determining the sample size n for estimating the population proportion p! a
conservative value of n can be obtained b" using &.)& as an estimate of p.
ANSWER: T
110. In developing confidence interval for the difference between two population
means using two independent samples, we use the pooled estimate
p
s
in
estimating the standard error of the sampling distribution of the sample mean
difference
1 '
X X if the populations are normal with equal variances.
ANSWER: T
'1(