The Stevens Motor Company is developing high powered engines for use inits new sports coupe. The engineers have advertised that the maximumhorsepower for the engine is 600HP. They sampled 16 engines and found theaverage to be 620HP (6 = 50).Using a 99% confidence interval for this sample of 16 engines, what is theupper confidence limit for this sample?About 649About 652About 632O About 644

Answered: The Stevens Motor Company is developing…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

The Stevens Motor Company is developing high powered engines for use in
its new sports coupe. The engineers have advertised that the maximum
horsepower for the engine is 600HP. They sampled 16 engines and found the
average to be 620HP (6 = 50).
Using a 99% confidence interval for this sample of 16 engines, what is the
upper confidence limit for this sample?
About 649
About 652
About 632
O About 644

Expert Solution

Step 1: Introduction

Confidence Limits or Interval:

Confidence limits are a statistical measure that tells us how confident we can be that the results of a sample reflect those of the entire population. Confidence limits are related to confidence levels, where confidence limits give us the range of possible results and confidence levels give us the probability of the accuracy of the results.

The confidence limits of a sample can be calculated using the following formula:

$C L = \bar{x} \pm Z_{\frac{α}{2}} \times \frac{σ}{\sqrt{n}}$

Here,

$C L$ is the confidence limit.

$\bar{x}$ is the sample mean.

$α$ is the confidence level.

$Z_{\frac{α}{2}}$ is the z score at $\frac{α}{2}$ .

$σ$ is the sample standard deviation.

$n$ is the number of observations.

The above formula gives the upper and lower confidence limits depending on whether we use the addition or subtraction operator respectively. In order to find the Upper Confidence Limit (UCL). We will use the addition operator as follows:

$U C L = \bar{x} + Z_{\frac{α}{2}} \times \frac{σ}{\sqrt{n}} - - - - (1)$

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions