Practice Problem Set Interval Estimation
Practice Problem Set Interval Estimation
Q1 Studies show that massage therapy has a variety of health benefits and is
not too expensive. A sample of 10 typical one-hour massage therapy sessions
showed an average charge of $59. The population standard deviation for a
one-hour session is σ = $5.50.
(a) Construct 95% confidence interval and the corresponding margin of error.
(b) Using 99% confidence, what is the margin of error?
6 4 6 8 7 7 6 3 3 8 10 4 8
7 8 7 5 9 5 8 4 3 8 5 5 4
4 4 8 4 5 6 2 5 9 9 8 4 8
9 9 5 9 7 8 3 10 8 9 6
Develop a 95% confidence interval estimate of the population mean rating for
Miami.
Q3 Annual starting salaries for college graduates with degrees in business admin-
istration are generally expected to be between $40, 000 and $57, 800. Assume
1
that a 95% confidence interval estimate of the population mean annual starting
salary is desired.
(a) What is the population standard deviation if 50 graduates are chosen for
the study?
(b) How large a sample should be taken if the desired margin of error is $600
with the same variability?
(c) How large a sample should be taken if the desired margin of error is $100
with the same variability?
(d) Would you recommend trying to obtain the $100 margin of error? Explain.
Q6 Amazon.com is testing the use of drones to deliver packages for same-day de-
livery. In order to quote narrow time windows, the variability in delivery times
must be sufficiently small. Consider a sample of 24 drone deliveries with a
sample variance of s2 = 0.81.
Q7 A large candy manufacturer produces, packages and sells packs of candy tar-
geted to weigh 52 grams. A quality control manager working for the company
2
was concerned that the variation in the actual weights of the targeted 52-gram
packs was larger than acceptable. That is, he was concerned that some packs
weighed significantly less than 52-grams and some weighed significantly more
than 52 grams. In an attempt to estimate σ, the standard deviation of the
weights of all of the 52-gram packs the manufacturer makes, he took a random
sample of n = 10 packs off of the factory line. The random sample yielded a
sample variance of 4.2 grams. Use the random sample to derive a 95% confi-
dence interval for σ.
Q10 Business problem: A wine can be labeled as quality 7 and above only if the
alcohol level is greater than 11.3. If the level of alcohol is less, then the will
won’t taste sour enough, if the alcohol level is less than 11.3 then the wine
might be bitter.
The price difference between quality 7 & 8 wine and quality 5 & 6 wine will
be as much as 125%. So the company needs to be very particular to maintain
this standard.
The quality control person is only allowed to open 10 bottles of wine in quality
7 & 8 to make sure the levels are sufficient. So here is the 10 samples that the
manager took:
3
Unit 1 2 3 4 5 6 7 8 9 10
Alcohol 12 12.5 11.7 14 12.7 12.1 11 10 10.8 9.7