A 2012 Gallup survey of a random sample of 1014 American adu

A 2012 Gallup survey of a random sample of 1014 American adults indicates that American families spend on average $151 per week on food. The report further states that, with 95% confidence, this estimate has a margin of error of ±$7.

(a) This confidence interval is expressed in the following form: “estimate ± margin of error.” What is the range of values (lower bound, upper bound) that corresponds to this confidence interval?

(b) What is the parameter captured by this confidence interval? What does it mean to say that we have “95% confidence” in this interval?

Solution

A)

Lower bound = point estimate - margin of error = 151 - 7 = 144

Upper bound = point estimate + margin of error = 151 + 7 = 158

Thus, the range of values is ($144, $158). [ANSWER]

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b)

It is the POPULATION MEAN. [ANSWER]

It means that we are 95% confident that the population mean is between #144 and $158. [ANSWER]