1. The housing market recovered slowly from the economic crises of 2008. Recently, in one large community, realtors rand
Posted: Wed May 11, 2022 1:12 pm
1. The housing market recovered slowly from the economic crises
of 2008. Recently, in one large community, realtors randomly
selected 36 bids from potential buyers to estimate the average loss
in home value. The sample showed the average loss from the peak in
2008 was $9560 with a standard deviation of $1500.
(a) Find a 95% confidence interval for the mean loss in value
per home.
(b) For the confidence interval found in (a), interpret the
interval and explain what 95% confidence means in this context.
(c) Suppose the standard deviation of the losses had been $3000
instead of $1500. What would the larger standard deviation do to
the width of the confidence interval (assuming the same level of
confidence)?
(d) Your classmate suggest that the margin of error in the
interval could be reduced if the confidence level changed to 90%
instead of 95%. Do you agree with this statement? Why, or why
not?
(e) Instead of changing the level of confidence, would it be
more statistically appropriate to draw a bigger sample?
of 2008. Recently, in one large community, realtors randomly
selected 36 bids from potential buyers to estimate the average loss
in home value. The sample showed the average loss from the peak in
2008 was $9560 with a standard deviation of $1500.
(a) Find a 95% confidence interval for the mean loss in value
per home.
(b) For the confidence interval found in (a), interpret the
interval and explain what 95% confidence means in this context.
(c) Suppose the standard deviation of the losses had been $3000
instead of $1500. What would the larger standard deviation do to
the width of the confidence interval (assuming the same level of
confidence)?
(d) Your classmate suggest that the margin of error in the
interval could be reduced if the confidence level changed to 90%
instead of 95%. Do you agree with this statement? Why, or why
not?
(e) Instead of changing the level of confidence, would it be
more statistically appropriate to draw a bigger sample?