a Rollercoaster's auditors estimate that the average daily loss from those illegally riding without tickets is at lease (greater or equal) $295, but wants to determine the accuracy of this statistic. The company researcher takes a random sample of losses over 64 days and finds that x=$300 and s=$15.
a) Test at a=0.05
b) Construct a 94% confidence interval of losses
Note a and be are independent
a) Z = (mean1 - mean2)/standard error (SE) of difference between means
SEdiff = √(SEmean1^2 + SEmean2^2)
SEm = SD/√n = 15/√64
If only one SD is provided, you can use just that to determine SEdiff.
Find table in the back of your statistics text labeled something like "areas under normal distribution" to find the proportion/probability of the Z score.
b) From same table, get Z score for ±.03. Insert into equation below.
94% = mean ± Z SEm