Question

Chap 8
1.         Studies show that massage therapy has a variety of health benefits and it is not too expensive. A sample of 10 typical one-hour massage therapy sessions showed an average charge of $59. The population standard deviation for a one-hour session is $5.50.

a.         What assumptions about the population should we be willing to make if a margin of error is desired?

b.         Using 95% confidence, what is the margin of error?

c.         Using 99% confidence, what is the margin of error?

d.         Construct the 99% confidence interval for the population mean.

2.        

The average cost per night of a hotel room in NYC is $273. Assume this estimate is based on a sample of 45 hotels and that the sample standard deviation is $65.

a.         With 95% confidence, what is the margin of error?

b.         What is the 95% confidence interval estimate of the population mean?

3.         The U.S. Energy Information Administration (US EIA) reported that the average price for a gallon of regular gasoline is $3.94. The US EIA updates its estimate of average gas prices on weekly basis. Assume the standard deviation is $.25 for the price of gallon of regular gasoline and recommend the appropriate sample size for the US EIA to use if they wish to report each of the following margins of error at 95% confidence.

a.         The desired margin of error is $.10.

b.         The desired margin of error is $.05.

Answer 1