NEIU Econ 217 Economic Statistics Homework 4 Name:

1. Read article linked to from webpage. Define margin of error. Find out how many
people Gallup and Rassmussen interview. How many degrees of freedom are there?
Can we assume normal distribution? Why? I calculate a margin of arror less than
three percent, what is the margin of error exactly (to 2 decimal points)? Is it ok to
use 3 for the margin of error? Why? Is it ok to report the same margin of error for
both candidates? Why?

2. Credit card balances for a sample of 10 households are: 11032, 6525, 5239, 61/5,
12584, 15415, 15917, 12591, 9743, 10324. What is the sample mean, the sample
standard deviation, the degrees of freedom, the t value for 95% confidence, and the
95% confidence interval?

3. The percentage of people not covered by health care insurance in 2003 was 15.6%. If
a congressional committee wishes to estimate the current proportion witha margen of
error of .03, and a 95% confidence interval, what sample size is required?

4. Annual per capita consumption of milk is 21.6 gallons. A sample of 16 individuals

from a small midwestern town showed a sample mean annual consumption of 24.1
gallons with a standard deviation of s = 4.8. Develop a hypothesis test that can be
used to determine whether the mean annual consumption in this town is higher than
the national mean. What is a point estimate of the difference between mean annual
consumption in this town and the national mean? At = . 5, test for a significant
difference. What is your conclusion? What type of error (type 1 or type 2) is relevant
to this problem, and what would such an error mean?

5. In 2005, 12.5% of workers belonged to unions. In 2006, a sample of 400 workers was
collected of which 52 belonged to unions. Formulate a hypothesis that will determine
whether union membership increased in 2006. What is the p-value for your hypothesis
test? At = .05, what is your conclusion?