1.

A laboratory uses an optical device to measure the fluorescein concentration in

a. Nine measurements are made for the same solution. The empirical (Sample)
mean of the 9 results is 4.38mg/l. Give a 99% confidence interval for the true
concentration of the solution.
b. For that same sample, what is the confidence level of the interval [4.36; 4.40]?
c. What should the sample size be if the concentration of the solution had to be
known at confidence level 0.99, with a precision (Margin of Error) of
±0.01𝑚𝑔/
𝑙?
d. On the same sample of 9 measurements, a standard deviation of 0.08mg/l has
been observed. Give a 99% confidence interval for the standard deviation.
What do you think of the company’s guarantee?
e. Answer the first question again, this time supposing that the theoretical
(Population) standard deviation is unknown.
Solution:

a. To calculate the 99% confidence interval for the true concentration of the solution, we
need to use the t-distribution since the population standard deviation is not known and
the sample size is less than 30 (n=9). The formula for the confidence interval is:

CI =x̄ ± t( α /2 , n−1)∗( s/√ n)

where x̄ is the sample mean, s is the sample standard deviation, n is the sample size, t(α/2,
n-1) is the t-value for the given confidence level and degrees of freedom, and α is the
significance level, which is 1 minus the confidence level.

Plugging in the values, we get:

CI = 4.38 ± t(0.005, 8) * (0.05/√9)

From the t-distribution table with 8 degrees of freedom and a significance level of 0.005,
we find that t(0.005, 8) = 3.355.
Plugging this value in, we get:

CI = 4.38 ± 3.355 * (0.05/√9)

CI = [4.24, 4.52] mg/l

Therefore, we can be 99% confident that the true concentration of the solution lies
between 4.24 mg/l and 4.52 mg/l.

b. To find the confidence level of the interval [4.36, 4.40], we need to use the t-
distribution again. The formula for the t-value is:

X − μO
t=¿
S/ √ n

where x̄ is the sample mean, μ is the hypothesized true mean, s is the sample standard
deviation, and n is the sample size.

Plugging in the values, we get:

t=(4.38−4.38)/¿)

t=0

The t-value is 0, which means that the interval [4.36, 4.40] includes the sample mean, so
the confidence level is 100%, or 1.

c. To find the required sample size, we need to use the formula for the margin of error:

ME=t (α /2 , n−1)∗( s /√ n)

where ME is the margin of error, t(α/2, n-1) is the t-value for the given confidence level
and degrees of freedom, and all other variables are as previously defined.

We want the margin of error to be ±0.01 mg/l, and we want to be 99% confident, so α =
0.01 and the significance level is 0.99. We can assume that the population standard
deviation is the same as the guaranteed standard deviation of 0.05 mg/l. Plugging in
the values, we get:
 0.01=t(0.005 , n−1)∗(0.05 /√ n)

From the t-distribution table with n-1 degrees of freedom and a significance level of
0.005, we find that t(0.005, n-1) = 2.861 for n = 42. Therefore, the required sample
size is 42.

d. To calculate the 99% confidence interval for the standard deviation, we need to use the
chi-square distribution. The formula for the confidence interval is:

[√((n-1)s^2 / χ^2(α/2, n-1)), √((n-1)s^2 / χ^2(1-α/2, n-1))]

where s is the sample standard deviation, n is the sample size, χ^2(α/2, n-1) and
χ^2(1-α/2, n-1) are the chi-square values for the given confidence level and degrees of
freedom.

Plugging in the values, we get:

[√ ((9−1)0.082 / χ 2 ( 0.005, 8)), √ ((9−1)0.082 / χ 2 (0.995 , 8))]

From the chi-square distribution table with 8 degrees of freedom and a significance level
of 0.005, we find that χ^2(0.005, 8) = 0.090 and χ^2(0.995, 8) = 20.483.

Plugging in these values, we get:

[0.019, 0.201] mg/l

Therefore, we can be 99% confident that the true standard deviation of the population lies
between 0.019 mg/l and 0.201 mg/l.

Based on the observed standard deviation of 0.08 mg/land the calculated confidence
interval, it seems that the company's guarantee of a standard deviation of 0.05 mg/l is
too optimistic.

e. When the theoretical standard deviation of the population is unknown, we can use the
sample standard deviation as an estimate. In this case, we need to use the t-
distribution to calculate the confidence interval for the true concentration of the
solution. The formula for the confidence interval is the same as in part a:
CI = x̄ ± t(α/2, n-1) * (s/√n)

where all variables are as previously defined.

Plugging in the values, we get:

CI = 4.38 ± t(0.005, 8) * (0.08/√9)

From the t-distribution table with 8 degrees of freedom and a significance level of 0.005,
we find that t(0.005, 8) = 3.355.

Plugging this value in, we get:

CI = 4.38 ± 3.355 * (0.08/√9)

CI = [4.08, 4.68] mg/l

Therefore, we can be 99% confident that the true concentration of the solution lies
between 4.08 mg/l and 4.68 mg/l when the theoretical standard deviation is unknown.

2. To study the rotting of potatoes, a researcher injects bacteria that include decay, in to
13 potatoes. He then measures the rotten area (in mm2) in these 13 potatoes. He gets a
mean of 7.84mm2 and an empirical (sample) variance of 14.13. The rotten area of a
potato is modelled by a normal distribution.
a. Find a confidence interval for μ at level 0.95, then 0.99
b. Compare the results in part a at the two levels of confidence levels

Solution

. a. To calculate the confidence interval for the true mean rotten area of potatoes, we need
to use a Z -distribution for the distribution is modelled by normal distribution even if
the size of the sample is small and population standard deviation is unknown.
For 0.95 level of confidence,
CI =x ̄ ± z ¿

For a 99% confidence level, α = 0.01 and t(0.005, 12) = 3.055. Plugging in the values, we
get:

CI =7.84 ± 2.58∗¿ mm^2

Therefore, we can be 99% confident that the true mean rotten area of potatoes lies
between 2.271mm^2 and 17.95mm^2.
 b. The confidence interval becomes wider as the confidence level increases, as expected.
The interval at the 99% confidence level is wider than the interval at the 95%
confidence level, reflecting the increased level of certainty required for the higher
confidence level. It is important to choose an appropriate confidence level based on
the specific needs of the analysis, as a higher confidence level may come at the cost of
a
wider interval and reduced precision.

3. Is there any difference between the average salary of a legal secretary and a medical
secretary? In an effort to answer that question a researcher takes a random sample of
33 legal secretaries across a region, resulting in a sample average annual salary of Birr
20,000 with a standard deviation of Birr 1,550. The researcher then takes a random
sample of 35 medical secretaries a class the region, which yields an average annual
salary of Birr 18,500 with a standard deviation of Birr 2,100. Use =0.01 to test this
question
Solution
1. Ho: 1-2 = 0
Ha: 1-2  0
2. Z – distribution , two tailed test
3.  = 0.01, /2 = 0.005
Z/ = Z0.005 = 2.57
 Reject Ho if /sample Z/  2.57
4. Legal Secretary Medical Secretary
X 1 = Birr 20,000 X 2 = Birr 18,500

n1 = 33 n2 = 35
S1 = Birr 1,550 S2 = Birr 2,100
Sample Z =?

( X 1 −X 2 ) −( μ1 −μ2 )
Z=

√ S 21 S 22
+
n 1 n2

( 20 , 000−18 ,500 )−( 0 )

√
( 1 −X 2) 2 2
1 ,550 2 ,100
+
33 35
 Reject Ho; because /sample Z/ = 3.36  2.57. There is a difference in the average
annual salary of legal and medical secretary.

4. A firm is studying the delivery times for two raw material suppliers. The firm in
basically satisfied with supplier A and is prepared to stay with this supplier provided
that the mean delivery time is the same or less than that of supplier B. However if a
firm finds that the mean delivery time from supplier B is less than that of supplier A,
it will begin making raw material purchases from supplier B.
a. What are the null and alternative hypotheses for this situation?
b. Assume that independent samples show the following delivery time x is for the two
suppliers.

Supplier A Supplier B
n1 = 50 n2 = 30
X 1 = 14 days X 2 = 12.5 days

S1 = 3 days S2 = 2 days

Using  = 0.05, what is your conclusion for the hypotheses from part (a)? What action do
you recommend in terms of supplier selection?
Solution
1. Ho: 1-2  0
Ha: 1-2  0
2. Z – distribution , Right - tailed test
3.  = 0.05
Z = Z0.05 = 1.64
Reject Ho if sample Z  1.64

4. Supplier A Supplier B
n1 = 50 n2 = 30
X 1 = 14 days X 2 = 12.5 days

S1 = 3 days S2 = 2 days
Sample Z =?
 (14−12 . 5 )−( 0 )
ZX = Z (14−12 .5) =+ 2. 68

√
( −X 2) 2 2
1
3 2
+
50 30

Decision: Reject Ho; because 2.68  1.64

This shows that the mean delivery time for supplier A is greater than supplier B. So the firm
should shift to supplier B.

5. In a wage discrimination case involving male and female employees, it is assumed that male
employees have a mean salary less than or equal to that of female employees. To justify this,
independent random samples of male and female employees were taken and the following
result obtained.
Male Employees Female Employees
n1 = 100 n2 = 100
X 1 = Birr 20,600 X 2 = Birr 19,700

S1 = 3,000 S2 = Birr 2,500

Test the hypothesis with  = 0.025. Does wage discrimination appear to exist in this case?

Solution
1. Ho: 1-2  0
Ha: 1-2  0
2. Z – distribution , Right - tailed test
3.  = 0.025
Z = Z0.025 = 1.96
Reject Ho if sample Z  1.96

4. Male employees Female employees

S1 = Birr 3,000 S2 = Birr 2,500

√
( −X 2) 2 2
1
3 , 000 2 ,500
+
100 100
Decision: Reject Ho; because 2.30  1.96
Wage discrimination appears to exist