1.a) If the true textbook cost is $524, what is the z-score and corresponding probability that you’d get a sample with a mean like the one we observed in Sample A or less?  Provide an interpretation for your z-score. 1.b) Using this probability, does the reported value of $524 seem reasonable? 1.c) Should the administrators adjust the value? Justify your recommendation using the statistical support provided

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The Office of Financial Aid has historical data that indicates the standard deviation of textbook costs is steady from semester to semester at $287. Please use the info provided to answer the 3 subquestions:

1.a) If the true textbook cost is $524, what is the z-score and corresponding probability that you’d get a sample with a mean like the one we observed in Sample A or less?  Provide an interpretation for your z-score.

1.b) Using this probability, does the reported value of $524 seem reasonable?

1.c) Should the administrators adjust the value? Justify your recommendation using the statistical support provided

The Office of Financial Aid at the University of Michigan currently quotes the cost of textbooks
for undergraduate students per semester to be
if their estimate is accurate or if this figure needs to be updated before the start of the next
Administrators are interested in verifying
school year. They know that in order to obtain a more realistic estimate they need to rely on
student data, so they have turned to various organizations on campus for help.
Transcribed Image Text:The Office of Financial Aid at the University of Michigan currently quotes the cost of textbooks for undergraduate students per semester to be if their estimate is accurate or if this figure needs to be updated before the start of the next Administrators are interested in verifying school year. They know that in order to obtain a more realistic estimate they need to rely on student data, so they have turned to various organizations on campus for help.
Standard
Organization
Mean
Sample Size
Deviation
Sample A
$346
$39
25
Sample B
$286
$47
200
Stats 250
gathered data on the
cost of textbooks for
$129.8
$109.5312
1494
all students currently
lenrolled in the course
Transcribed Image Text:Standard Organization Mean Sample Size Deviation Sample A $346 $39 25 Sample B $286 $47 200 Stats 250 gathered data on the cost of textbooks for $129.8 $109.5312 1494 all students currently lenrolled in the course
Expert Solution
Step 1

Since, the question is not properly specified and does not provide a lot of information, the work is done on the basis of intuition, depending upon the information provided.

 

We see that, true text book cost is $524.

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