EXERCISES

Basic Exercises (those firms with annual revenue less than or equal
8.18 Calculate the margin of error for each of the following: to $250 million) and a random sample of 200 similar
a. nx = 300 pnx = 0.62 executives from large firms (those firms with annual
ny = 350 pny = 0.72 revenues exceeding $750 million). From the small
b. nx = 100 pnx = 0.44 firms, 60 respondents indicated that the implementa-
ny = 120 pny = 0.55 tion of SOX had a major overall impact on their firm.
From the large firms, 164 respondents believed that
8.19 Calculate the 95% confidence interval for the dif- the implementation of SOX had a major overall im-
ference in population proportions for each of the pact on their firm. Estimate with 98% confidence the
following: difference in the population proportion between all
a. nx = 260 pnx = 0.35 small and large firms concerning the impact of SOX.
ny = 240 pny = 0.30 8.22 Would you use your school library more if the hours
b. nx = 145 pnx = 0.20 were extended? From a random sample of 121 fresh-
ny = 120 pny = 0.25 men, 75 indicated that they would use the school’s
library more if the hours were extended. In an in-
Application Exercises dependent random sample of 105 sophomores, 87
8.20 In randomized, double-blind clinical trials of a new responded that they would use the library more if
medical supplement, test subjects were randomly the hours were extended. Estimate the difference in
divided into two groups. The people in Group X re- proportion of first-year and second-year students re-
ceived the new supplement while those in Group Y sponding affirmatively to this question. Use a 95%
received a control supplement. After the first dose, 107 confidence level.
of 715 subjects in Group A experienced showed an im- 8.23 A random sample of 100 men contained 61 in favor
provement in health. After the first dose, 59 of 630 sub- of a state constitutional amendment to retard the rate
jects in Group B experienced showed an improvement of growth of property taxes. An independent random
in health. Construct a 95% confidence interval for the sample of 100 women contained 54 in favor of this
difference between the two population proportions. amendment. A confidence interval extending from
8.21 Regulatory agencies and the U.S. Congress recognize 0.04 to 0.10 was calculated for the difference between
both the values and emerging issues for small firms the population proportions. Determine the confidence
as the Sarbanes-Oxley Act of 2002 (SOX) is imple- level of this interval.
mented. On April 23, 2006, the Advisory Committee 8.24 Supermarket shoppers were observed and ques-
on Smaller Public Companies issued a final report to tioned immediately after putting an item in their cart.
the Security and Exchange Commission assessing the Of a random sample of 220 choosing a product at the
impact of Sarbanes-Oxley Act of 2002 on smaller pub- regular price, 137 claimed to check the price before
lic companies (Final Report of the Advisory Commit- putting the item in their cart. Of an independent ran-
tee on Smaller Public Companies to the U.S. Securities dom sample of 280 choosing a product at a special
and Exchange Commission, April 23, 2006). Suppose price, 206 made this claim. Find a 90% confidence in-
that one study collected data from a random sample terval for the difference between the two population
of 150 CEOs, CFOs, and board members of small firms proportions.

KEY WORDS

• confidence interval for the • confidence interval for the difference variances not assumed to be
difference between two means, between two means, independent equal, 341
dependent samples, 333 samples, and unknown population • confidence interval for the difference
• confidence interval for the difference variances assumed to be equal, 340 between population proportions
between two means, independent • confidence interval for the difference (large samples), 345
samples, and known population between two means, independent • pooled sample variance, 340
variances, 338 samples, and unknown population

DATA FILES

• Baby Walking, 343, 347 • Improve Your Score, 335 • Taiwan Real Estate, 347, 348

346 Chapter 8 Estimation: Additional Topics

 CHAPTER EXERCISES AND APPLICATIONS
Visit www.MyStatLab.com or www.pearsonglobal were undecided. Estimate the difference in the percent-
editions.com to access the data files. ages of residents from these two cities who support this
8.25 Independent random samples from two normally dis- proposal. Use a 95% confidence level.
tributed populations give the following results: 8.30 Is the average amount spent on textbooks per semes-
ter by accounting majors significantly different from
nx = 15 x = 400 s x = 20 the average amount spent on textbooks per semester
ny = 13 y = 360 s y = 25 by management majors? Answer this question with a
90% confidence interval using the following data from
Assume that the unknown population variances are random samples of students majoring in accounting
equal and find a 90% confidence interval for the differ- or management. Discuss the assumptions.
ence between population means.
8.26 Independent random samples from two normally Accounting Management
distributed populations give the following results: Majors Majors
Mean $340 $285
nx = 22 x = 2500 sx = 250 Standard deviation 20 30
ny = 20 y = 2100 sy = 100 Sample size 40 50

If we do not assume that the unknown population 8.31 Brämhults Juice, based in Sweden, produces chilled
variances are equal, what is the 99% confidence inter- fruit and vegetable juices. A manager at Brämhults
val for the difference between the population means? is considering purchasing a new machine to bottle
8.27 Independent random samples from two normally dis- 16-fluid-ounce (473-milliliter) bottles of 100% pure
tributed populations give the following results: carrot juice and wants an estimate of the differ-
ence in the mean filling weights between the new
nx = 10 x = 480 s x = 30
machine and the old machine. Random samples of
ny = 12 y = 520 s y = 25 bottles of carrot juice that had been filled by both
machines were obtained. Estimate the difference
a. If we assume that the unknown population vari-
in the mean filling weights between the new and
ances are equal, find the 90% confidence interval
the old machines? Discuss the assumptions. Use
for the difference of population means.
a = 0.10.
b. If we do not assume that the unknown population
variances are equal, find the 90% confidence inter- New Machine Old Machine
val for the difference between population means. Mean 472 milliliters 468 milliliters
8.28 A company sends a random sample of 16 of its sales- Standard deviation 5.5 milliliters 6.5 milliliters
people to a course designed to increase their moti- Sample size 22 20
vation and, hence, presumably their effectiveness.
In the following year these people generated sales 8.32 The Baby Walking data file contains informa-
with an average value of $625,000 and a sample stan- tion concerning the birth, first steps, age, and so
dard deviation of $80,000. During the same period, on for 98 babies. The variable “siblings” refers to the
an independently chosen random sample of 10 sales- number of siblings the baby has, and the variable
people who had not attended the course obtained “walking” refers to the age, in months, in which the
sales with an average value of $608,000 and a sample baby started walking.
standard deviation of $73,000. Assume that the two Some specialists say that babies with siblings start
population distributions are normal and have the walking sooner than babies without siblings. Use an
same variance. Find a 90% confidence interval esti- appropriate 95% confidence interval to confirm or reject
mate for the difference between the population mean this theory.
sales for salespeople who attended the motivational 8.33 A newspaper article reported that 350 people in one
course and for those salespeople who did not attend state were surveyed and 60% were opposed to a recent
the course. court decision. The same article reported that a similar
8.29 A proposal for a new 1-cent tax increase to support can- survey of 550 people in another state indicated oppo-
cer research is to appear on the ballot in one county’s sition by only 20%. Construct a 95% confidence inter-
next election. The residents in Hangzhou and Chengdu, val of the difference in population proportions based
two cities in China, were questioned as to their level on the data.
of support. In Hangzhou a recent survey of 450 resi- 8.34 The Taiwan Real Estate data file contains in-
dents showed that 352 people supported the proposal, formation on several variables related to
18 were undecided, and the remainder were opposed houses sold in Taiwan in 2012 and 2013. Build an ap-
to the new proposal. In Chengdu, the results of a ran- propriate 90% confidence interval to check if there has
dom sample of 400 residents found that 326 people been a significant increase in the price (USD/m2) from
supported the tax, 32 were opposed, and the remainder 2012 to 2013.

Chapter Exercises and Applications 347