It is known that the national average price of a burrito is

It is known that the national average price of a burrito is $7 with standard deviation of $0.50. What is the probability the sample mean of 64 burrito prices (anywhere in the nation) is greater than $7.20? Suppose we find that an average price of a burrito among 64 mexican restaurants in Santa Barbara area to be $7.20. What does this finding say about how expensive a burrito is in Santa Barbara?

Solution

Mean ( u ) =7
Standard Deviation ( sd )=0.5
Number ( n ) = 64
Normal Distribution = Z= X- u / (sd/Sqrt(n) ~ N(0,1)                  
a)
P(X > 7.2) = (7.2-7)/0.5/ Sqrt ( 64 )
= 0.2/0.063= 3.2
= P ( Z >3.2) From Standard Normal Table
= 0.0007