Problem 1
Annual family dental expenses for the families of a random sampleof ten employees of a company are given below. You can assume thefamily dental expenses for the employees of the company arenormally distributed.
$450, $390, $550, $140, $690, $600, $250, $330, $490, $810
a) Compute the mean and standard deviation of the sample.
b) Determine the point estimate and 95% confidence interval for themean family dental expenses of all employees of the company.
c) Interpret the confidence interval.
d) How would you communicate this information to the Vice-Presidentof Human Resources in non-statistical language.
e) How could this information be used in negotiations with thedental insurer of the company in setting the premiums for the nextyear.
Problem 2
The average price of regular gasoline in the continental US statesand the District of Columbia was $3.74 on August 18, 2008. Alaskaand Hawaii are not included as the gas prices there are much higherthan the continental US. The price of gasoline in the elevenwestern states of the U.S. on the same day is given below. Test thehypothesis that the average price of gasoline in the western statesis higher than the national average for Continental USA and theDistrict of Columbia, i.e., higher than $3.74. Use level ofsignificance a = 0.05.
California $4.04
Arizona $3.72
Colorado $3.83
Idaho $4.01
Montana $3.97
Nevada $3.84
New Mexico $3.77
Oregon $3.92
Utah $4.04
Washington $3.99
Wyoming $3.90
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