In: Statistics and Probability
For the next 4 questions, please read the description below.
A marketing company wants to know the mean price of new vehicles sold in an up-and‑coming area of town. Marketing strategists takes a simple random sample of 756 cars, and find that the sample has a mean of $27,400 and a standard deviation of $1300.
1. Assume that the population standard deviation is unknown. What is the error of estimate for a 95% confidence interval?
2. Assume that the population standard deviation is known to be $1500. What is the upper bound for a 98% confidence interval?
3. Assume that the population standard deviation is known to be $1500. Find the error of estimate for a 99% confidence interval.
4. Assume that the population standard deviation is known. If the marketing strategists want the 90% confidence interval to be within $50 of the population mean, how many cars at minimum should they sample?