Answered: A CI is desired for the true average…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 6E: The economic analysis division of Mapco Enterprises has estimated the demand function for its line...

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A CI is desired for the true average stray-load loss μ (watts) for a certain type of induction motor when the line current is held at 10 amps for a speed of 1500 rpm. Assume that strayload loss is normally distributed with σ = 3.0.
a. Compute a 95% CI for μ when n = 25 and = 58.3.
b. Compute a 95% CI for μ when n = 100 and = 58.3.
c. Compute a 99% CI for μ when n = 100 and = 58.3.
d. Compute an 82% CI for μ when n = 100 and = 58.3.
e. How large must n be if the width of the 99% interval for μ is to be 1.0?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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