STAT 1430 Recitation Confidence Intervals for Means

Confidence Intervals for Means

NOTE: All confidence intervals are 95% unless otherwise indicated. This also applies on exams.
ALWAYS INTERPRET YOUR CONFIDENCE INTERVALS IN THE CONTEXT OF THE
PROBLEM, EVEN WHEN USING STATCRUNCH. When doing calculations, show supporting
work and use proper notation for full credit.

1. A confidence interval provides a range of ___________ values for a population parameter (such
as the population mean.)

2. Suppose you want to estimate a population parameter (such as the population mean.) Why is it
important to provide a range of values, as we do with a confidence interval, rather than just find
the average of one sample of data and use that as your estimate?

3. A confidence interval for the mean equals x plus or minus “something”. The “something” is called
the _________________________.

4. What 3 items affect the margin of error of a confidence interval?

a.
b.
c.

5. As n increases, what happens to the margin of error (MOE) of your confidence interval?
a. Increases
b. Decreases
c. Stays the same
Explain why this happens using plain language (do not use a math argument).

6. As the confidence level of your confidence interval increases, what happens to the value of Z*?
a. Increases
b. Decreases
c. Stays the same
Explain why this happens using plain language (do not use a math argument).

7. As the standard deviation of the population increases, what happens to the MOE?
a. Increases
b. Decreases
c. Stays the same
Explain why this happens using plain language (do not use a math argument).

8. Suppose a 95% confidence interval for a population mean was found to be (60, 80). Can we find
the sample mean? Choose yes/no and justify your answer.

FOR THE NEXT 2 PROBLEMS:

A group of randomly selected 50 sales representatives from a company this year had an average
sales of $107.5 million this year. Assume the standard deviation of sales is stable at $20.5 million.
STAT 1430 Recitation Confidence Intervals for Means
9. Use your data to find a range of likely values for average sales for all representative in the entire
company using StatCrunch. Verify with your own calculations and show your work.

FINDING A CONFIDENCE INTERVAL FOR THE POPULATION MEAN USING

STATCRUNCH. In this case you know the population standard deviation σ.

--Mystatlab.com / StatCrunch / Open StatCrunch.

--Go to “STATS/Z STATS/ONE SAMPLE/ WITH SUMMARY.
--In the window, type in the mean, standard deviation, and sample size. (Note it says sample
standard deviation but it should say population standard deviation.)
--Hit COMPUTE!
You will get the Upper Limit and the Lower Limit of your confidence interval. Include a
statement with it.

10. The average sales for the entire company last year was reported to be $100 million. According to
your results from the previous problem, do you think the average sales have changed this year?
Why or why not? If so, how has it changed? (Hint: Think about what your range of likely values is
for average sales.)

11. Scores on an MBA placement exam are reported to have a normal distribution with standard
deviation 18. The exam officials stated that the average score for all students was 70. You take a
random sample of 50 students and find their average score is 67. Use your data to estimate the
mean score for all students taking the MBA placement exam using StatCrunch. Verify your
answer using calculations and show your work.

12. Students at the union want to estimate the average number of ounces of coffee in a cup. They take
a random sample of 40 cups and find the mean is 5.2 ounces. Assume amount dispensed has a
normal distribution and that the standard deviation is set at 0.24 ounces per cup. Find your best
estimate for the average amount of coffee being dispensed by this machine. Use StatCrunch.
Verify your answer using calculations and show your work.

FOR THE NEXT 4 PROBLEMS (#13-16):

You want to estimate the average household income for Ohio. You want the margin of error to
be no more than $1,000. Prior data shows the standard deviation of household income is $30,000.

13. How many households should we sample to achieve the desired margin of error?

14. Suppose you want to cut the margin of error down to $500 next time. What should your sample
size be?

15. Suppose you want to cut the margin down to 1/3 of what it started at (1/3 of 1000). What does
your sample sizes have to be? (Be careful!)

16. Why do we always round up when finding the appropriate sample size to achieve a certain margin
of error, even when the value after the decimal point is less than .5? (For example, if we solve for
n and get 422.2 households, why do we round this up to 423 households when reporting the
required n?)
STAT 1430 Recitation Confidence Intervals for Means
FOR THE NEXT 6 PROBLEMS (#17-22):
Suppose you want to estimate the average number of years employees have worked at your
company so far. You take a random sample of 100 workers and you find the average number of
years they have worked at your company so far is 10 years. (Assume the standard deviation for
number of years worked is known to be 2 years.)

17. Let X be the number of years an employee has worked at this company. Assuming this company
has been around for a long time, you might expect the distribution of X to be skewed to the right,
and hence does NOT have a normal distribution. Explain why this might be the case.

18. Find a 95% confidence interval for the average number of years worked for employees over the
whole company using StatCrunch.

19. Explain why you could not do the previous problem (and use a formula involving a Z value)
without use of the Central Limit Theorem. Remember, X does not have a normal distribution!

20. Why are the proper conditions met in order to use the CLT here? Explain.

21. Without doing any calculations, if the sample mean was 15 years instead of 10, what would
happen to the margin of error? (Assume nothing else in the problem has changed.)
a. The margin of error would increase
b. The margin of error would decrease
c. The margin of error would stay the same

22. If we increased the confidence level from 95% to 99%, the margin of error would increase as well.
But we also know that if we increase n we can bring the margin of error back down. What would
the sample size have to be in this case to achieve 99% confidence (instead of 95% confidence)
without changing the size of the margin of error? (Calculate the new n.)