Question

Suppose cups are for sale in a grocery store. Calculate a confidence interval for the price of the item based on the given sample. Consider Confidence level at

a) 95%

b) 99%.

item	# of items	# items sold per month	sigma of items sold	Mean Price	Stdev of Price
cups	17	21	1.1	410	21

1) What is the Margin of Error?

2) What is the sampling Error?

3) What are the confidence intervals?

Compare the two intervals, what do you observe?

4) When the Confidence level increases, what happens to the interval?

5) what happens to the Margin of Error?

Answer 1

5.09	std. error
399.20	confidence interval 95.% lower
420.80	confidence interval 95.% upper
10.80	margin of error

5.09	std. error
395.12	confidence interval 99.% lower
424.88	confidence interval 99.% upper
14.88	margin of error

1) What is the Margin of Error?

The Margin of Errors is 10.80 and 14.88.

2) What is the sampling Error?

The sampling error is 5.09 and 5.09.

3) What are the confidence intervals?

The 95% confidence interval is between 399.20 and 420.80.

The 99% confidence interval is between 395.12 and 424.88.

Compare the two intervals, what do you observe?

The 99% confidence interval is wider.

4) When the Confidence level increases, what happens to the interval?

The confidence interval widens.

5) what happens to the Margin of Error?

The margin of error increases.