(Answered) Bob is interested in studying whether the average household

Economics

Bob is interested in studying whether the average household income in city A is lower than the national benchmark, μ₀ = $51,500. He collects income information from a random sample of 100 households, conducts a one-sample z test using the mean income of the sample the national benchmark, and constructs a confidence interval of the sample mean.

(a) Explain, in the context of the above scenario, what a sampling distribution is?

(b) It is well known that the distribution of income is highly and positively skewed, but the one-sample z test is based on critical values obtained from a standard normal distribution. Why is the skewness of income not a problem in this situation?

(d) What could Bob have done to obtain a narrower (i.e., more precise) confidence interval?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M93134626
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Business Economics

The distribution of heights of adult american women is

The distribution of heights of adult American women is approximately normal with a mean of 64 inches and standard deviation of 2 inches. What percent of women is taller than 68 inches?

A us electronics rm is considering moving its production to

A U.S. electronics ?rm is considering moving its production to a plant in Mexico. Its estimated production function is q = L0.5K0.5. In the U.S., the wage, w is ten dollars, and the cost of capital, r is also ten dollars ...

The elasticity of demand for daves famous is pizza is 26

The elasticity of demand for Dave's Famous is Pizza is 2.6. Dave is considering raising pizza prices by 20%. Is this a good idea? What will happen to his sales? His total revenue? Explain.

A company has two divisions the first produces an

A company has two divisions. The first produces an operating system for smartphones. The other division manufacturers and markets its own smartphone. Of course, the company's smartphone runs on its own operating system. ...

Autonomous consumptionnbsp 660marginal propensity to

Autonomous consumption = 660 Marginal propensity to consume = 0.8 Autonomous taxation = 200 Income tax rate = 0.2 Planned investment = 500 Government spending = 500 Autonomous net exports = 300 NX = 0.04 Calculat ...

In your opinion if the government imposes unit sales tax ie

In your opinion, if the government imposes unit sales tax (i.e. $ tax per unit sold) on a product, will the market equilibrium change? Which one, demand or supply will shift? Increase or decrease? Will new tax cause "dis ...

The increase in prescription drugs cost increases the drug

The increase in prescription drugs cost, increases the drug companies profit. Should there be restrictions to lower consumer cost and how much of their profit should be reinvested into research and development?

In some states allow requires drivers to turn on their

In some states allow requires drivers to turn on their headlights when driving in the rain. A highway patrol officer believes that lesson one-quarter of all the drivers follow this rule. As a test, he randomly samples 20 ...

C 4005timesy - tg215 billion ip50 billion and t10

C = 40+0.5×(Y - T) G=$215 billion, IP=$50 billion and T=$10 billion. Y=C+IP+G What is the equilibrium income level? Suppose that government purchases are reduced by $100 billion. What is the new equilibrium level of inco ...

What is the result of a price ceiling and why do some

What is the result of a price ceiling? And why do some consumers tend to favor price ceilings and others tend to oppose it?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert