Solution manual for Essentials of Business Statistics Bowerman O'Connell Murphree Orris

Solution manual for Essentials of Business Statistics

Bowerman O'Connell Murphree Orris 5th edition

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Chapter 07 - Sampling and Sampling Distributions

CHAPTER 7—Sampling and Sampling Distributions

§7.1 CONCEPTS
7.1 A random sample is chosen by assigning each unit in the population a unique identifying number
and then utilizing a random digit table to identify the units to be included in the sample. Statistical
software packages are commonly used to generate the random numbers needed to select a random
sample.

LO07-01

7.2 If you use sampling with replacement then you run the risk of including the same unit in your sample
twice (or more) whereas with sampling without replacement this is not possible.

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§7.1 METHODS AND APPLICATIONS

7.3 From Table 1.1 (starting in the upper left-hand corner) we obtain 5-digit random numbers:
33276 Skip random number 33 since there is no company numbered 33;
03427 03 Coca Cola
92737 Skip 92
85689 Skip 85
08178 08 Coca Cola Enterprises
51259 Skip 51
60268 Skip 60
94904 Skip 94
58586 Skip 58
09998 09 Reynolds American
14346 14 Pepsi Bottling Group
74103 Skip 74
24200 Skip 24
87308 Skip 85
07351 07 Sara Lee
LO07-01

7.4 From Table 1.1 (starting in the upper left-hand corner) we obtain 5-digit random numbers:
33276 33276
03427 03427
92737
Cross out the numbers greater than 73,219 because
85689 there are only 73,219 registration cards.
08178 08178 What remains are the first ten registration cards to be
51259 51259 selected in the sample.
60268 60268
94904
58586 58586
09998 09998
14346 14346
74103
24200 24200
87308
07351 07351
LO07-01
7-1
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Education.
Chapter 07 - Sampling and Sampling Distributions

7.5 5:47pm

LO07-01

7.6 These results do not generalize to the entire population because this is a voluntary response survey.
Usually people with strong opinions, often negative, are the people who choose to respond to such a
survey.

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§7.2 CONCEPTS
7.7 The sampling distribution of the sample mean x̅ is the probability distribution of the population
consisting of all the sample means (averages) computed from all possible samples (of a given size)
selected from the underlying population measurements.

LO07-02

7.8 If the sample size n is sufficiently large, then the population of all sample means is approximately
normal.

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§7.2 METHODS AND APPLICATIONS

σ2 22 4 σ 2
7.9 a. μx̅ = μ = 10 σx̅2 = = = = 0.16 σx̅ = = = 0.4
𝑛 25 25 √𝑛 √25
σ2 (.5)2 .25 σ .5 0.5
b. μx̅ = μ = 500 σx̅2 = = = = 0.0025 σx̅ = = = = 0.05
𝑛 100 100 √𝑛 √100 10
σ2 (.1)2 .01 σ .1 0.4
c. μx̅ = μ = 3 σx̅2 = = = = 0.0025 σx̅ = = = = 0.05
𝑛 4 4 √𝑛 √4 2
σ2 (1)2 1 σ 1 1
d. μx̅ = μ = 100 σx̅2 = = = = 0.000625 σx̅ = = = = 0.025
𝑛 1600 1600 √𝑛 √1600 40

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7.10 a. μx̅  3σx̅ = [10  3(0.4)] = [8.8, 11.2]; must assume normal population since n is small (n < 30).

b. μx̅  3σx̅ = [500  3(0.05)] = [499.85, 500.15]

c. μx̅  3σx̅ = [3  3(0.05)] = [2.85, 3.15] ; must assume normal population since n < 30.

d. μx̅  3σx̅ = [100  3(0.025)] = [99.925, 100.075]

LO07-02, LO07-03

7-2
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Chapter 07 - Sampling and Sampling Distributions

7.11 a. The sampling distribution of x̅ is approximately normally distributed. We do not need to

assume the population is normal because the sample size is large (n  30) enough to apply the
Central Limit Theorem
σ 4 4
b. μx̅ = μ = 20 σx̅ = = = = 0.5
√𝑛 √64 8

𝑥̅ −𝜇𝑥̅ 21−20
c. P(x̅ > 21) = P( > ) = P(z > 2) = 1 – .9772 = .0228
𝜎𝑥̅ 0.5

𝑥̅ −𝜇𝑥̅ 19.385−20
d. P(x̅ < 19.385) = P( < ) = P(z < -1.23) =.1093
𝜎𝑥̅ 0.5

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7.12 The other two possible samples of selecting two grand prizes are (40, 80) & (60, 80)

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7.13 Sample x̅ 7.14 x̅ p(x̅)

20 40 30 30 1
/6
20 60 40 40 1
/6
20 80 50 50 2
/6
40 60 50 60 1
/6
40 80 60 70 1
/6
60 80 70

LO07-02 LO07-02

7.15 P(x̅ ≥ 50) = p(50) + p(60) + p(70) = 2/6 + 1/6 + 1/6 = 4/6 = 2/3
(Note: when choosing one envelope, P(x ≥ 50) = ¼ + ¼ = ½)
LO07-02

7.16 If you choose only one envelope then there is a 25% chance of selecting any one envelope. This
means you might get as little as $20,000 or as much as $80,000. When choosing one envelope, the
grand prize value is more variable, so there is both more risk and more opportunity. When choosing
two envelopes, the grand prize value is is less variable, so there is less risk but also less opportunity.
Which option you choose is an individual choice.

LO07-02

7-3
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Education.
Chapter 07 - Sampling and Sampling Distributions

7.17 a. The sampling distribution of x̅ is approximately normally distributed because the sample size is
large enough (n  30) to use the Central Limit Theorem
σ 2.47
b. μx̅ = μ = 6 σx̅ = = = 0.247
√𝑛 √100

𝑥̅ −𝜇𝑥̅ 5.46−6
c. P(x̅ ≤ 5.46) =P( ≤ ) = P(z ≤ -2.19) = .0143
𝜎𝑥̅ 0.247

d. Since there is only a 1.43% chance of getting a sample with a mean of 5.46 minutes or less if μ
is really 6 minutes, it is reasonable to conclude that μ is really less than 6 minutes.

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7.18 a. μ = 42 σ = 2.64 n = 65
σ 2.64
μx̅ = μ = 42 σx̅ = = = 0.3275
√𝑛 √65

𝑥̅ −𝜇𝑥̅ 42.95−42
c. P(x̅ ≥ 42.95) =P( ≥ ) = P(z ≥ 2.90) = 1 – .9981 = .0019
𝜎𝑥̅ 0.3275

b. Since there is only a 0.19% chance of observing a sample mean of 42.95 or more when μ is
only 42, it is reasonable to conclude that μ is actually > 42.

LO07-02, LO07-03

7.19 a. μ = 1.4 days σ = 1.3 days n = 100

σ 1.3
μx̅ = μ = 1.4 σx̅ = = = 0.13 days
√𝑛 √100

𝑥̅ −𝜇𝑥̅ 1.5−1.4
P(x̅ > 1.5) =P( > ) = P(z > 0.77) = 1 – .7794 = .2206
𝜎𝑥̅ 0.13

b. μ = 1.0 days σ = 1.8 days n = 100

σ 1.8
μx̅ = μ = 1.0 σx̅ = = = 0.18 days
√𝑛 √100

𝑥̅ −𝜇𝑥̅ 1.5−1.0
P(x̅ > 1.5) =P( > ) = P(z > 2.78) = 1 – .9973 = .0027
𝜎𝑥̅ 0.18

c. Since the probability of observing a sample mean exceeding 1.5 days is very small if μ is
actually 1.0., it is reasonable to conclude that the average amount of unpaid time has increased
to more than 1.0 days

LO07-02, LO07-03

7-4
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Education.
Chapter 07 - Sampling and Sampling Distributions

§7.3 CONCEPTS
7.20 The sampling distribution of p̂ is the population of all possible sample proportions p̂ computed from
all samples of a given size from the population of interest.

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7.21 In order for us to say that the distribution of p̂ is approximately normal, we must insure that the
sample size is sufficiently large so that both np  5 and n(1 – p)  5.

7.22 μp̂ = p The average of all possible sample proportions is the population proportions.

𝑝(1−𝑝)
σp̂ = √ The variability of the sample proportions decreases with an increase in n.
𝑛

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7.23 Increasing the sample size n will decrease the spread of all possible p̂ values.

LO07-04

§7.3 METHODS AND APPLICATIONS

7.24 a. np = (100)(.4) = 40 n(1–p) = (100)(.6) = 60 Yes, sample is large enough

b. np = (10)(.1) = 1 n(1–p) = (10)(.9) = 9 No, sample is not large enough

c. np = (50)(.1) = 5 n(1–p) = (50)(.9) = 45 Yes, sample is large enough

d. np = (400)(.8) = 320 n(1–p) = (400)(.2) = 80 Yes, sample is large enough

e. np = (1000)(.98) = 980 n(1–p) = (1000)(.02) = 20 Yes, sample is large enough

f. np = (400)(.99) = 396 n(1–p) = (400)(.01) = 4 No, sample is not large enough

LO07-04

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Chapter 07 - Sampling and Sampling Distributions

7.25 a. μp̂ = p = 0.5

𝑝(1−𝑝) .5(1−.5) .25
σp̂2 = = = = 0.001
𝑛 250 250

𝑝(1−𝑝) (.5)(.5)
σp̂ = √ =√ = √0.001 = 0.0316
𝑛 250

b. μp̂ = p = 0.1
𝑝(1−𝑝) .1(1−.1) .09
σp̂2 = = = 100 = 0.0009
𝑛 100

𝑝(1−𝑝) (.1)(.9)
σp̂ = √ =√ = √0.0009 = 0.03
𝑛 100

c. μp̂ = p = 0.8
𝑝(1−𝑝) .8(1−.8) .16
σp̂2 = = = = 0.0004
𝑛 400 400

𝑝(1−𝑝) (.8)(.2)
σp̂ = √ =√ = √0.0004 = 0.02
𝑛 400

d. μp̂ = p = 0.98
𝑝(1−𝑝) .98(1−.98) .0196
σp̂2 = = = = 0.0000196
𝑛 1000 1000

𝑝(1−𝑝) (.98)(.02)
σp̂ = √ =√ = √0.0000196 = 0.004427
𝑛 1000

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7.26 a. μp̂  2σp̂ =[0.5  2(0.0316)] = [0.4368, 0.5632]

b. μp̂  2σp̂ =[0.1  2(0.03)] = [0.04, 0.16]

c. μp̂  2σp̂ =[0.8  2(0.02)] = [0.76, 0.84]

d. μp̂  2σp̂ =[0.98  2(0.004427)] = [0.971146, 0.988854]

LO07-04

7-6
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Education.
Chapter 07 - Sampling and Sampling Distributions

7.27 a. np = (100)(.9) = 90 : n(1 – p) = (100)(.1) = 10: Since np and nq are both more than 5, the
sample is large enough to conclude that the distribution of p̂ is approximately normally
distributed.

b. μp̂ = p = 0.9

𝑝(1−𝑝) (.9)(.1)
σp̂ = √ =√ = √0.0009 = 0.03
𝑛 100

𝑝̂−𝜇𝑝
̂ .96−.90
c. P(p̂ ≥ .96) = P( ≥ ) = P(z ≥ 2.00) = 1 – 0.9772 = 0.0228
𝜎𝑝
̂ 0.03

.855−.9 𝑝̂−𝜇𝑝
̂ .945−.9
d. P(.855 < p̂ < .945) =P( < < ) = P(-1.50 < z < 1.50) = .9332 –.0668 = 0.8664
0.03 𝜎𝑝
̂ 0.03

𝑝̂−𝜇𝑝
̂ .915−.900
e. P(p̂ ≤ .915) = P( ≤ ) = P(z ≤ 0.50) = 0.6915
𝜎𝑝
̂ 0.03

LO07-04

7.28 a. μp̂ = p = 0.3

𝑝(1−𝑝) (.3)(.7)
σp̂ = √ =√ = √0.000207715 = 0.0144
𝑛 1011

𝑝̂−𝜇𝑝
̂ .32−.30
P(p̂ ≥ .32) = P( ≥ ) = P(z ≥ 1.39) = 1 – 0.9177 = 0.0823
𝜎𝑝
̂ 0.0144

b. Perhaps, but evidence contradicting the assumption that p = 0.3 is not very strong.

LO07-04

7.29 a. μp̂ = p = 0.48

𝑝(1−𝑝) (.48)(.52)
σp̂ = √ =√ = √7.1314 = 0.0267
𝑛 350

𝑝̂−𝜇𝑝
̂ .54−.48
P(p̂ ≥ .54) = P( ≥ ) = P(z ≥ 2.25) = 1 – 0.9878 = 0.0122
𝜎𝑝
̂ 0.0267

b. Yes, the probability of observing a sample proportion of 0.54 or more is very small if p = .48.
The true p value is most likely more than 0.48.

LO07-04

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Education.
Chapter 07 - Sampling and Sampling Distributions

.45−.48 𝑝̂−𝜇𝑝
̂ .51−.48
7.30 a. P(.45 ≤ p̂ ≤ .51) = P( ≤ ≤ ) = P(-1.12 ≤ z ≤ 1.12) = 0.8686 – 0.1314 = 0.7372
0.0267 𝜎𝑝
̂ 0.0267

.42−.48 𝑝̂−𝜇𝑝
̂ .54−.48
P(.42 ≤ p̂ ≤ .54) = P( ≤ ≤ ) = P(-2.25 ≤ z ≤ 2.25) = 0.9878 – 0.0122 = 0.9756
0.0267 𝜎𝑝
̂ 0.0267

LO07-04

7.31 It is more reasonable to say that the survey has a 6% margin of error because there is a very high
(0.9756) chance that p̂ will be within 0.06 of p, while the chance that p̂ will be within 0.03 of p is not
as high (only 0.7372).

LO07-04

7.32 a. μp̂ = p = 0.20

𝑝(1−𝑝) (.2)(.8)
σp̂ = √ =√ = √0.00016 = 0.01265
𝑛 1000

𝑝̂−𝜇𝑝
̂ .15−.20
P(p̂ ≤ .15) = P( ≤ ) = P(z ≤ -3.95) = 0.00004
𝜎𝑝
̂ 0.01265

b. Yes, the probability of observing a sample proportion of 0.15 or less is very small if p = .20.
The true p value is likely less than .20.
LO07-04

𝑝(1−𝑝) (.7)(.3)
7.33 a. μp̂ = p = 0.70 σp̂ = √ =√ = √0.0007 = 0.02646
𝑛 300

𝑝̂−𝜇𝑝
̂ .75−.70
P(p̂ ≥ .75) = P( ≥ ) = P(z ≥ 1.89) = 1 – 0.9706 = 0.0294
𝜎𝑝
̂ 0.02646

b. Yes, the probability of observing a sample proportion of 0.75 or more is small if p = .70. The
true p is probably greater than .70.

LO07-04

§7.4 CONCEPTS
7.34 When the population consists of two or more groups that differ with respect to the variable of
interest.

Strata are non-overlapping groups of similar units.

Strata should be chosen so that the units in each stratum are similar on some characteristic (often a
categorical variable).

LO07-05

7-8
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Education.
Chapter 07 - Sampling and Sampling Distributions

7.35 Cluster sampling is often used when selecting a sample from a large geographical region. The name
derives from the fact that, at each stage, we “cluster” elements into subpopulations.

LO07-05

7.36 First divide 1853 by 100 (since n is 100) and round down to 18. We randomly select one company
from the first 18 (in a list of all the companies). From the company selected we simply count down
the list of companies by 18 to get to the next company to select. We continue this process until we
have reached a sample size of 100.

LO07-05

7.37 A stratified random sample is selected by dividing the population into some number of strata, and
then randomly sampling inside each stratum.

Potential strata: students who live off campus and

students who live on campus.

LO07-05

7.38 (1) List all cities with population > 10,000.

(2) Randomly select a number of such cities.
(3) Within each selected city, randomly select a number of city blocks.
(4) Within each selected city block, take a random sample of individuals.

LO07-05

§7.5 CONCEPTS
7.39 a. Phone survey: inexpensive, but impersonal with a low response rate
Mail survey: inexpensive, but impersonal with a low response rate
Mall survey: more expensive, personal interview, questions more easily explained, higher
response rate

b. Dichotomous: yes/no, easily analyzed but very limited in range or depth of response
Multiple choice: more range or depth of response
Open ended: much more difficult to analyze, but significantly more nuance to responses.

LO07-06

7.40 Undercoverage occurs when some elements in the population are left out of the process of choosing
the sample.

Nonresponse occurs when data cannot be obtained from an element selected in a sample.

Response bias occurs when respondents are reluctant to answer honestly or when the questions are
slanted to influence responses.

LO07-06

7-9
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Education.
Chapter 07 - Sampling and Sampling Distributions

7.41 The sample may be biased because it is not stated that the recipients of the survey were chosen at
random. In addition there may be errors of undercoverage and nonresponse. Since the return of a
survey is voluntary, it is possible to elicit only the strong opinions.

LO07-06

SUPPLEMENTARY EXERCISES
7.42 Showing the first five random numbers (four times)
1 33276 33276 33276 33276
2 03427 03427 03427 03427
3 92737 92737 92737 92737
4 85689 85689 85689 85689
5 08178 08178 08178 08178

One could select Invoice numbers: 332, 034, 927, 856, 081 … until n=50
One could select invoice numbers: 327, 342, 273, 568, 817 … until n=50
One could select invoice numbers: 276, 427, 737, 689, 178 … until n=50.
LO07-01

7.43 a. μx̅ = μ = 50.6

σ 1.62
σx̅ = = = 0.7245
√𝑛 √5

[μx̅  2σx̅] =[50.6  2(0.7245)] = [49.151, 52.049]

b. μx̅ = μ = 50.6
σ 1.62
σx̅ = = = 0.256
√𝑛 √40

[μx̅  2σx̅] =[50.6  2(0.256)] = [50.088, 51.112]

c. n = 40. A sample of 40 provides a 95.44% chance of getting a sample mean of at least 50.088,
thereby providing evidence that μ is at least 50.

LO07-02

7.44 μx̅ = μ = -3.5

σ 26
σx̅ = = = 11.63
√𝑛 √5

[μx̅  2σx̅] =[-3.5  2(11.63)] = [-26.76, 19.76]

LO07-02

7-10
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Chapter 07 - Sampling and Sampling Distributions

7.45 a. μp̂ = p = 0.60

𝑝(1−𝑝) (.6)(.4)
σp̂ = √ =√ = √0.00024 = 0.01549
𝑛 1000

𝑝̂−𝜇𝑝
̂ .64−.60
P(p̂ ≥ .64) = P( ≥ ) = P(z ≥ 2.58) = 1 – 0.9951 = 0.0049
𝜎𝑝
̂ 0.01549

b. Yes, the probability of observing a sample proportion of 0.64 or more is very small if p = .60.
The true value of p is more likely greater than .60.

LO07-04

7.46 a. x p(x) x • p(x) (x – μ) (x – μ)2 (x – μ)2 • p(x)

0 0.65 0 -0.55 0.3025 0.1966
1 0.2 0.2 0.45 0.2025 0.0405
2 0.1 0.2 1.45 2.1025 0.2103
3 0.05 0.15 2.45 6.0025 0.3001
∑ = 0.55 ∑ = 0.7475

μ = ∑ x•p(x) = 0.55 flaws

σ2 = ∑(x – μ)2 • p(x) = 0.7475

σ = √σ2 = √0.7475 = 0.8646 flaws

b. μx̅ = μ = 0.55
σ 0.8646
σx̅ = = = 0.08646
√𝑛 √100

The sampling distribution of x̅ is approximately normally distributed since n=100.

c. Number of Flaws per Flash Drive Distribution of x-bar

Normal, Mean=0.55, StDev=0.08646
0.7
5
0.6

4
0.5
Probability

0.4 3
Density

0.3
2
0.2

1
0.1

0.0 0
0 1 2 3 0.3 0.4 0.5 0.6 0.7 0.8
Flaws X

𝑥̅ −𝜇𝑥̅ 0.75−0.55
d. P(x̅ > 0.75) = P( > ) = P(z > 2.31) = 1 – .9896 = .0104
𝜎𝑥̅ 0.08646

LO07-02, LO07-03

7-11
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Solution manual for Essentials of Business Statistics Bowerman O&#039;Connell Murphree Orris

Chapter 07 - Sampling and Sampling Distributions

7.47 a. μx̅ = μ = 50 gallons

σ 0.6
σx̅ = = = 0.06 gallons
√𝑛 √100

49.88−50 𝑥̅ −𝜇𝑥̅ 50.12−50

P(49.88 < x̅ < 50.12) =P( < < ) = P(-2.00 < z < 2.00) = 0.9772 – 0.0228
0.06 σ𝑥̅ 0.06
= 0.9544
𝑥̅ −𝜇𝑥̅ 49.85−50
b. P(x̅ < 49.85) =P( < ) = P(z < -2.50) = 0.0062
σ𝑥̅ 0.06

LO07-02, LO07-03

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