Answer:
a) The conditions are not met because utility derived reduces with increase in consumption. Many of them selected the first wine because, the satisfaction derived from the first wine was higher, and it reduces as their drink more of the wine.
b)The condition of the use of plus is met because the confidence interval has to be greater than zero, so the plus aspect of the formula met the criteria.
The confidence interval for the people that choosed the first wine is from 21 to 23
Explanation:
A confidence interval is the amount of uncertainty in the e result of a sample population
This is calculated using
P + z(√(p(1-p)/n)) or p - z(√(p(1-p)/n))
P is the proportion 90%
Z is a constant gotting from a confidence level table. At 90% Z is 1.64
Therefore;
0.9 + 1.64(√(0.9(1-0.9)/32)) = 0.99 = 1
Or
0.9 - 1.64(√(0.9(1-0.9)/32)) = 0.813
Because the confidence interval should be a greater than zero, the positive sign is the best equation for this.
Therefore the confidence interval is
22 + 1 or 22 - 1
Which is from 21 to 23