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AK11_230

AK11_230 - ECO 230 Economic Statistics Answer Key to...

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ECO 230 Marianna Kudlyak Economic Statistics Spring 2007 Answer Key to Homework #11 Total points: 10. Graded exercises: Ex. 1 (2pts), Ex5(3pts), and Ex6 (3pts). 0.5pts for the presence of each of the remaining 4 exercises (Ex.8 was not graded). Exercise 1 . Newbold, Carlson and Thorne, Problem 8.16, p.289. In addition answer the following question: part e) Is the normality of the population distribution important for your solution? Why? a. .005 16, 4.07, .12, 2.58 nx z σ == = = 4.07 ± 2.58(.12/4) = 3.9926 up to 4.1474 b. The interval would be narrower since the z score for a 95% confidence interval is smaller than the z score for the 99% confidence interval. c. The interval would be narrower due to the smaller standard error. d. The interval would be wider due to the larger standard error. e. The normality is important because then each Xi in the sample is also normally distributed and sample mean, as a linear function of Xi’s, is also normally distributed. Hence, we can proceed to construct the confidence

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AK11_230 - ECO 230 Economic Statistics Answer Key to...

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