Question

"Productivity" is a term you hear quite often in news reports about the economy. Productivity isnt everything, but in the long run it is almost everything. A countrys ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. Productivity measures how efficiently production inputs, such as labor and capital, are being used in an economy to produce a given level of output. Knowledgeable, skilled workers with the proper tools such as computers or manufacturing equipment result in high productivity. This Productivity Excel file shows the percent change in worker output per hour from the previous quarter for the United States from 1988 through 2008.

Question 1.  These data can be approximated quite well by a N(3.4, 3.1) model. Economists become alarmed when productivity decreases. According to the normal model what is the probability that the percent change in worker output per hour from the previous quarter is more than 1.7 standard deviations below the mean?

Question 3. What is the probability that the percent change in worker output from the previous quarter is between -2.025 and 5.57? Use the normal model at the beginning of question 2.

Answer 1