Group4 StatAssignment Chapter7

51. Personal Health Expenditures.
Data made available through the Petersen Kaiser Health

System Tracker in May 2018 showed health expenditures were $10,348 per person in the
United States. Use $10,348 as the population mean and suppose a survey research firm will
take a sample of 100 people to investigate the nature of their health expenditures. Assume the
population standard deviation is $2500.
1. Show the sampling distribution of the mean amount of health care expenditures
for a sample of 100 people.
Population mean = 10348
Sample = 100
Standard Deviation = 2500
Sampling Distribution of the Mean

- If following a simple random sample distribution, the expected value of x =
Population mean =10348
Standard Deviation =2500/(100)½ = 250
2. What is the probability the sample mean will be within ±$200 of the population
mean?
Population Mean = 10348
Population Standard Deviation = 2500
Sample Number = 100
Prob (X <= 10148) = NORM.DIST(10548, 10348, 2500. 1) = 53.19%

Prob (X <= 10148) = NORM.DI.ST(10148, 10348 2500. 1) =46.81%
Prob( 10148 <=x <= 10548) = 53.19%- 46.81% = 6.38%
3. What is the probability the sample mean will be greater than $12,000? If the survey
research firm reports a sample mean greater than $12,000, would you question
whether the firm followed correct sampling procedures? Why or why not?
Prob(X <= 12000) = NORM.DIST (12000.10348, 2500, 1) = 74.56%

Prob (X >= 12000) = 1–74.56% = 25.44%
Yes, because the probability that the sample mean will be greater than $12,000 is very
small or not possible.
53. Airline Fares. The mean airfare for flights departing from Buffalo Niagara International
Airport during the first three months of 2017 was $320.51. Assume the standard deviation for
this population of fares is known to be $80. Suppose a random sample of 60 flights departing
from Buffalo Niagara International Airport during the first three months of 2018 is taken.
X=320.51
 =80
a. If the mean and standard deviation of the population of airfares for flights departing from
Buffalo Niagara International Airport didn’t changed between the first three months of
2017 and the first three months of 2018, what is the probability the sample mean will be
within $20 of the population mean cost per flight?
X N Normal
μX= μ= 320.51
σ 80
X= = =10.33
√ n √ 60
P ¿0)
−20 20
= P( <Z < )
10.33 10.33
¿ P (−1.94< Z< 1.94 )=P ( Z<1.94 )−P ( Z <−1.94 )
=0.9476
b. What is the probability the sample mean will be within $10 of the population mean cost
per flight?
P ¿0)
¿ P ¿)
¿ P (−0.97< Z< 0.97 )=P ( Z< 0.97 )−P( Z <−0.97)
=0.6680
55. Inventory Costs. Three firms carry inventories that differ in size. Firm A’s inventory
contains 2000 items, firm B’s inventory contains 5000 items, and firm C’s inventory
contains 10,000 items. The population standard deviation for the cost of the items in each firm’s
inventory isσ =144 . A statistical consultant recommends that each firm take a sample
of 50 items from its inventory to provide statistically valid estimates of the average cost per item.
Managers of the small firm state that because it has the smallest population, it should be able to
make the estimate from a much smaller sample than that required by the larger firms. However,
the consultant states that to obtain the same standard error and thus the same precision in the
sample results, all firms should use the same sample size regardless of population size.
Given:
σ =14 4
n=5 0
N A =¿2000 ¿ N B =¿5000 ¿
N C=¿10000 ¿
a. Using the finite population correction factor, compute the standard error for each of the three
firms given a sample of size 50.
The standard error of the mean is the population standard deviation divided by the square root
of the sample size; include the finite population correction factor.
N −n σ 2000−50 144
Firm A=
√ N−1 √ n
=
√
2000−1 √ 50
≈ 20. 11353468
N −n σ 5000−50 144
Firm B=
√ N −1 √ n
=
√
5000−1 √ 50
≈ 20. 26462265
N−n σ 10000−50 144

Firm C=
√ N −1 √ n
=
√
10000−1 √ 50
≈ 20.31471558
b. What is the probability that for each firm the sample mean xˉ will be within ± 25of the
population mean μ?
The z-score is the value decreased by the mean, divided by the standard deviation:
FIRM A FIRM B FIRM C
x 1=lower bound =−25 x 1=lower bound =−25 x 1=lower bound =−25
x 2=upper bound=25 x 2=upper bound=25 x 2=upper bound=25
μ=mean=0 μ=mean=0 μ=mean=0
s=standard deviation s=standa rd deviation s=standard deviation
¿ 20.11353468 ¿ 20.26462265 ¿ 20.31471558
Thus, the two z-scores are: Thus, the two z-scores are: Thus, the two z-scores are:
x1−μ x1−μ x1−μ
z 1= =−1.242944137 z 1= =−1.233677055 z 1= =−1.230635
s s s
x2 −μ x2 −μ x2 −μ
z 2= =1.242944137 z 2= =1.233677055 z 2= =1.230635
s s s
Areas between these z- Areas between these z- Areas between these z-

scores: scores: scores:
P ( z< z1 ) =0.10 749 P ( z< z1 ) =0.10935 P ( z< z1 ) =0.10935

P ( z< z2 ) =0.89 251 P ( z< z2 ) =0. 89065 P ( z< z2 ) =0. 89065
The areas above is: The areas above is: The areas above is:
P ( z 1< z < z 2 )=0.785 P ( z 1< z < z 2 )=0.781 P ( z 1< z < z 2 )=0.781
63. Life of Compact Fluorescent Lights. In 2018, the Simple Dollar website reported that the
mean life of 14-watt compact fluorescent lights (CFLs) is 8000 hours. Assume that for this
population the standard deviation for CFL life is 480. Suppose the U.S. Department of Energy
would like to select a random sample of 35,000 from the population of 14-watt CFLs for a follow-
up study.
a. Show the sampling distribution of x́ , the sample mean for a sample of 35,000 individuals
from this population.
Mean Life = 8,000 hours

Standard deviation = 480
Show the Sampling distribution of x́
Expected Value of x́
E( x́ ) =µ = 8,000
Standard deviation of x́
σ
σ x́ =
√n
480
=
√ 35,000
= 2.566
The Sampling distribution of x́ is normal with mean E ( x́ ) = 8,000 and Standard

deviation σ x́ = 2.566.
b. What is the probability that a simple random sample of 35,000 individuals from this
population will provide a sample mean that is within four hours of the population mean?
σ = 480
n = 35,000
µ = 8,000 hours
p [(8,000 – 4) ≤ x ≤ (8,000 + 4)] = p (7996 ≤ x ≤ 8,004)
Z-SCORE
(x−µ)
z= σ
√n
(7,996−8,000)
= 480
√ 35,000
= -1.5590
z-score for x bar = 8,004
(x−µ)
z= σ
√n
(8,004−8,000)
z= 480
√ 35,000
z = 1.5590
p (7996 ≤ x ≤ 8,004) = p (-1.5590 ≤ z ≤ 1.5590) from normal distribution table p (z ≤
0.0594) – p (z ≥ - 0.9406)
= 0.8812
c. What is probability that a simple random sample of 35,000 individuals from this
population will provide a sample mean that is within one hour of the population mean?
σ = 480
n = 35,000
µ = 8,000 hours
p [(8,000 – 1) ≤ x ≤ (8,000 + 1)] = p (7,900 ≤ x ≤ 8,001)
Z-SCORE
(x−µ)
z= σ
√n
z – score for (x =7,900)
(7,999−8,000)
= 480
√ 35,000
= 0.3898
z-score for x bar = 8,001
(x−µ)
z= σ
√n
(8,001−8,000)
z= 480
√ 35,000
z = 0.3898
and therefore, p (7999 ≤ x ≤ 8,001) = p (-0.3898 ≤ z ≤ 0.3898) from normal distribution
table p (z ≤ 0.3898) – p (z ≥ -0.3898)
= 0.6517 – 0.3483 = 0.3034
Probability = 0.3034
d. Suppose the mean life of a sample of 35,000 14-watt CFLs differs from the population
mean life by more than four hours. How would you interpret this result?
Since the answer in B is p (7996 ≤ x ≤ 8,004) = .8812, this means that the probability the
mean life of a sample of 35,000 14-watt CFLs will differ from the population mean like µ
by more than 4 hours is 1 – 0.8812 = 0.1188.
This would mean that the sample results would occur more than one time out of 10
samples given that the population mean is 8,000. Thus, the results do not provide strong
evidence that the population mean is different from 8,000.

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51. Personal Health Expenditures.

Data made available through the Petersen Kaiser Health

Sampling Distribution of the Mean

Prob (X <= 10148) = NORM.DIST(10548, 10348, 2500. 1) = 53.19%

Prob(X <= 12000) = NORM.DIST (12000.10348, 2500, 1) = 74.56%

N−n σ 10000−50 144

Areas between these z- Areas between these z- Areas between these z-

P ( z< z1 ) =0.10 749 P ( z< z1 ) =0.10935 P ( z< z1 ) =0.10935

P ( z 1< z < z 2 )=0.785 P ( z 1< z < z 2 )=0.781 P ( z 1< z < z 2 )=0.781

Mean Life = 8,000 hours

The Sampling distribution of x́ is normal with mean E ( x́ ) = 8,000 and Standard

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