Each of the fifty states assigns its own tax to the sale of a package of cigaret

Question

Each of the fifty states assigns its own tax to the sale of a package of cigarettes. These taxes range from a low of 17 cents per pack to a high of $4.35 per pack The mean tax is $1.46, the median tax is $1.39 and the standard deviation is S.93 A policy analyst has an idea that the eleven Western states have significantly lower cigarette taxes than the rest of the country. She finds that the average tax among these states is just under $1.37. 5. Can she use a normal table to help her analyze this situation? 6. What is the probability that a random sample of eleven states would average less than $1.37?

Explanation / Answer

5.
Yes normal table can be used to analyze this situation as population std. dev. is given

6.
P(X < 1.37)
= P(z < (1.37 - 1.46)/(0.93/sqrt(11))
= P(z < -0.32096)
= 0.3741

Required probability = 0.3741

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