Question

stimating, with 98% confidence level, the mean price of regular gas in your area on a given day. You should collect ten prices and use that sample to provide the 98% confidence interval for the mean price of regular gas for all stations in your area. Find margin of error

Gas prices:

1. $2.90

2. $2.88

3. $2.76

4. $2.74

5. $2.82

6. $3.00

7. $2.79

8. $3.10

9. $2.89

10. $3.10

Answer 1

Solution :

Given that,

n = 10

Point estimate = sample proportion = = 0.98

1 - = 0.02

At 98% confidence level the z is ,

Z_/2 = Z _0.01 = 2.326

Margin of error = E = Z _{/ 2} * (( * (1 - )) / n)

= 2.326 * (((0.98*0.02) / 10)

= 0.103

Margin of error is 0.103