Econ 70 Fall 2003

Homework Hint

Chapter 6, #40 was discussed to get you going. Is the efficiency gain an independent random number each year or is it one number that occurs every year? This matter to the variance calculation. The question is whether the central limit theorem applies to the energy savings.

Confidence Intervals for the Sample Proportion

We begin with the binomial distribution.

This uses a lemma:

Applying previous results leads to the expectation and variance for the sample proportion.

We can think about samples of various sizes.

The goal is a confidence interval for the sample proportion.

If you were in class, you heard my famous "net" explanation for confidence intervals.