Estimating the Population Mean Income of Lexus Owners. Sample Mean + Margin of Error Called a Confidence Interval To Compute Margin of Error, One of Two Conditions Must Be True: The Distribution of the Population of Incomes Must Be Normal, or
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Lexus Owners’ Incomes (N = 200)
Constructing a Distribution of
Samples of Size 5 from N = 200 Owners
Mean Using a Sample Mean
Select Simple Random Sample
Compute Sample Mean and
Std. Dev. For n < 10, Sample Bell-Shaped?
For n >10 CLT Ensures Dist of Normal
Draw Conclusion about
Population Mean, m
7,300 7,700 8,100 8,400
7,800 8,300 8,500 7,600
7,400 7,800 8,300 8,600
Can Use t-Table Provided Distribution
of Sample Mean is Normal
Two-Sided Confidence Intervals
Ideal: _________ Level of Confidence and
_________ Confidence Interval .