Question

The cost of 5 gallons of ice cream has a variance of 64 with a mean of 34 dollars during the summer. What is the probability that the sample mean would differ from the true mean by less than 1.1 dollars if a sample of 38 5-gallon pails is randomly selected

Answer 1

0.5587 = 55.87% probability that the sample mean would differ from the true mean by less than 1.1 dollars.

Explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal Probability Distribution:

Problems of normal distributions can be solved using the z-score formula.

In a set with mean
`\mu` and standard deviation
`\sigma`, the z-score of a measure X is given by:

`Z = (X - \mu)/(\sigma)`

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean
`\mu` and standard deviation
`\sigma`, the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean
`\mu` and standard deviation
`s = (\sigma)/(√(n))`.

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

The cost of 5 gallons of ice cream has a variance of 64 with a mean of 34 dollars during the summer.

This means that
`\sigma = √(64) = 8, \mu = 34`

Sample of 38

This means that
`n = 38, s = (8)/(√(38))`

What is the probability that the sample mean would differ from the true mean by less than 1.1 dollars ?

P-value of Z when X = 34 + 1.1 = 35.1 subtracted by the p-value of Z when X = 34 - 1.1 = 32.9. So

X = 35.1

`Z = (X - \mu)/(\sigma)`

By the Central Limit Theorem

`Z = (X - \mu)/(s)`

`Z = (35.1 - 34)/((8)/(√(38)))`

`Z = 0.77`

`Z = 0.77` has a p-value of 0.77935

X = 32.9

`Z = (X - \mu)/(s)`

`Z = (32.9 - 34)/((8)/(√(38)))`

`Z = -0.77`

`Z = -0.77` has a p-value of 0.22065

0.77935 - 0.22065 = 0.5587

0.5587 = 55.87% probability that the sample mean would differ from the true mean by less than 1.1 dollars.