Question

1. Many drugs used to treat cancer are expensive. BusinessWeek reported on the cost per treatment of Herceptin, a drug used to treat breast cancer. Typical treatment costs (in dollars) for Herceptin are provided by a simple random sample of 10 patients.

5798       7446       5119       5376       5495       5237       4814       6578       3717       5920

1. Develop a point estimate of the mean cost per treatment with Herceptin.
2. Develop a point estimate of the standard deviation of the cost per treatment with Herceptin

1. If I have a population which is normally distributed with a mean and std. dev. of 120 and 20 respectively, what is the mean and the standard deviation of the sampling distribution of the mean using a sample size of

a.                            16

b.                            25

c.                             36

d.                            100

PLEASE DO THIS IN EXCEL AND SHOW FORMULA!

Answer 1

a. Sample mean is a point estimate of Mean cost per treatment. use Average formula in Excel.

=average(all values) = 5550

b. Standard Deviation of the sample (use STDEV formula in excel)

=STDEV(all values) = 1003.8

c. Since the population is normally distributed, mean and standard deviation of the samples will be equal to Population Mean and Population Std Dev / n^(1/2), where n is the sample size

For Sample Size 16, Sample Mean = 120, Std Dev = 20/16^0.5 = 5

For Sample Size 25, Sample Mean = 120, Std Dev = 20/25^0.5 = 4

For Sample Size 36, Sample Mean = 120, Std Dev = 20/36^0.5 = 3.3

For Sample Size 100, Sample Mean = 120, Std Dev = 20/100^0.5 = 2