Question

(ONLY B)

(NO EXCEL SOLUTIONS) PLEASE USE WRITTEN SOLUTIONS

The average total dollar purchase at a convenience store is less than that at a super- market. Despite smaller-ticket purchases, convenience stores can still be profitable because of the size of operation, volume of business, and markup. A researcher is interested in estimating the average purchase amount for convenience stores in Canmore, Alberta. To do so, she randomly sampled 24 purchases from several convenience stores in Canmore and tabulated the amounts to the nearest dollar. Use the following data to construct a 90% confidence interval for the population average amount of purchases. Assume that the population standard deviation is 3.23 and the population is normally distributed.

$ 2    $11.   $8    $7    $9    $3

   5.     4        2      1.     10    8

14.    7.       6.     3.      7.     2

    4.    1         3       6.     8.     4

A. Show all the steps and provide the resulting confi-dence interval (give the minimum and maximum values).

   

B. Re-analyze the problem in part a, but this time assume that the population standard deviation is NOT known. In other words, you will need to estimate the population standard deviation using the sample standard deviation, calculated from the raw data and decide whether to use z or t. Construct the resulting confidence interval (give the minimum and maximum values). Is the con- fidence interval different from the one you constructed in part a.? If so, explain in words how and why they are different.

Answer 1