ECON 15B
Homework 5
1. The following random sample was selected from a normal distribution: 4,6,3,5,9,3.
a. Construct a 90% confidence interval for the population mean 𝜇.
b. Construct a 95% confidence interval for the population mean 𝜇.
c. Construct a 99% confidence interval for the population mean 𝜇.
d. Assume that the sample mean and sample standard deviation remain exactly the same as
those you just calculated but are based on a sample of n=26 observations rather than n=6
observations. Repeat parts a-c. What is the effect of increasing the sample size on the width
of the confidence intervals?
is
COMPANY
REVENUE
Enterprise
13.1
FlyingJ
14.32
Tenaska
11.6
Wawa
5.05
Ergon
4.49
Brookshire
2.2
BrightStar
3.66
Bose
2.18
MaryKay
2.4
LLBean
1.62
RoomToGo
1.75
SAS
2.15
BlueTee
1.1
Printpack
1.36
USOil
2.19
Describe the population from which the random sample was drawn.
Use a 98% confidence interval to estimate the mean revenue of the population of companies in
questions.
Interpret your confidence interval in the context of the problem.
What characteristic must the population possess to ensure the appropriateness of the
estimation procedure used in part b.
Suppose Forbes reports that the true mean revenue of the 441 companies on the list is $5.0
billion. Is the claim believable?
c.
d.
e.
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a.
b.
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2. IOP create billions of dollars of new wealth for owners, managers, and employees of companies
that were previously privately owned. Nevertheless, hundreds of large and thousands of small
companies remain privately owned. The revenues of a random sample of 15 firms from Forbes
441 Largest Private Companies list is given in the table below:
1
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