Quantitative Techniques II

Class Exercise 2
1. The number of chocolate bars sold per day by a particular newsagent is known to be
normally distributed. The newsagent owner has kept a record of the number of chocolate
bars sold for the last three weeks (i.e. twenty-one days) from which he calculated the
following statistics:
21
X

xi = 1207.5

i=1

21
X

x2i = 75297

i=1

where random variable X is the number of chocolate bars sold per day. Find 95% confidence
interval for the population mean.
75297 21 57.52
= 293.29
20
Since the variance of the population is unknown and we have a small sample, we have to
use t distribution with 20 degrees of freedom. The formula for a 100(1 )% confidence
interval is:
s
x tn1,/2
n
q
So for this case: 57.5 2.086 293.29
21 = (49.704, 65.296) where P (t20 > 2.086) = 0.025.
x = 57.5,

s2 =

2. Goldspoon is a company which processes and packages sugar. The weight of their 1kg
packets of caster sugar is known to be normally distributed with standard deviation of 30
grams. 25 packets of caster sugar were randomly taken from todays output, and their
sample mean was calculated to be 1.01kg.
a) Find a 95% confidence interval for the population mean.
n = 25, = 30, and X = 1010. Using the above formula gives:
C.I. = 1010 1.96

30
= 1010 11.76 = (998.24, 1021.76)
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b) Without doing the calculations, state whether a 99% confidence interval for the population mean will be wider than, or narrower than, or the same width as the one
calculated in a). Explain your answer.
It will necessarily be wider since the width of confidence intervals reflect the degree of
certainty we have in our estimates. If we want to be 99% certain that the interval we
estimate contains the true population mean instead of 95%, it will have to be wider
than the interval estimated at 95%.
c) It is decided that a sample of 50 packets will be randomly taken from tomorrows
output. Without doing the calculations, state whether a 95% confidence interval for
the population mean calculated tomorrow will be wider than, or narrower than, or
the same width as todays one calculated in a). Explain your answer.
It will be narrower. Intuitively, it is because a greater number of observation will
increase the degree of confidence we have in our sample estimate, so it should be
reflected in the interval we estimate. Graphically, the variance of the sampling distribution will be smaller, making the normal distribution of X narrower.
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d) In fact, the population standard deviation for todays output is 20 grams. Without
doing the calculations, state whether the correctly calculated 95% confidence interval
will be wider than, or narrower than, or the same width as the one calculated in a).
Explain your answer.
It will be narrower again. If the true variance of the population is 20 instead of 30,
the population from which we draw our sample wont be as varied, and the variance
of the sampling distribution will decrease directly as a result.
3. Fainsburys claim that the contents of their 1-litre apple juice cartons are on average at
least 995 millilitres. The population is known to be normal with variance 144 millilitres. A
random sample of 30 cartons was picked o the shelf one day, and yielded a sample mean
of 989 millilitres. Conduct a hypothesis test at 5% level of significance to see if the sample
supports the manufacturers claim. See if you reach the same conclusion by computing a
confidence interval at an appropriate confidence level.
H0 : = 995
H1 : < 995
989995
= 2.739 <
n = 30, 2 = 144, and x = 989. Standardised sample mean is:
144/30

1.645. Therefore we have a strong evidence to suggest that the contentss of Fainsburys
1-litre carton apple juice is less than 995 on average. We reject the null hypothesis in
favour of the alternative. Since we have a one-tail test here, the appropriate confidence
level to use to compute an equivalent confidenceqinterval is obviously 90%. Substituting

the numbers into the formula gives: 989 1.645 144

30 =(985.4, 992.6). The hypothesised
value of 995 is way outside the confidence interval, which is consistent with the test result
as it should be.
4. Historically, our students final credit-weighted marks upon graduation are normally distributed with variance 50. A random sample of 40 students are taken and the average of
their final marks was 72.
Use the standard notation and definition of confidence interval with normal population
and known variance.

C.I. = X z/2
n
a) Find a 95% confidence interval for the population mean. Interpret your resultwhat
exactly does this confidence interval tell us?
r
50
= 72 2.1913 = (69.809, 74.131)
C.I. = 72 1.96
40
b) Also find a 99% confidence interval for the population mean. Comment on your result.
r
50
= 72 2.88 = (69.12, 74.88)
C.I. = 72 2.576
40
c) A statistician computed a confidence interval for the population mean based on the
result of this particular sample. He reported a confidence interval of (70.502, 73.498).
What level of confidence did he choose to come up with this interval estimates?

(73.498 70.502)/2 = 2.996, so z/2 1.25 = 2.996/2 = 1.498. Then z/2 must be:
1.498

' 1.34. P (Z < 1.34) = 0.91, indicating that 9% was left on either tail of the
1.25
distribution. So the confidence level chosen by the statistician must have been 82%.
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