The highway fuel economy of a 2016 Lexus RX 350 FWD 6-cylinder 3.5-L automatic 5-speed using premium fuel is a normally distributed random variable with a mean of μ = 26.50 mpg and a standard deviation of σ = 3.25 mpg. Required:
a. What is the standard error of X and the mean from a random sample of 25 fill-ups by one driver?
b. Within what interval would you expect the sample mean to fall, with 98 percent probability?

a) 0.65 mpg

b) Between 24.99 mpg and 28.01 mpg.

Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal probability distribution

When the distribution is normal, we use the z-score formula.

In a set with mean and standard deviation , the zscore of a measure X is given by:

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem estabilishes that, for a normally distributed random variable X, with mean and standard deviation , the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean and standard deviation, which is also called standard error, .

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

In this question, we have that:

a. What is the standard error of X and the mean from a random sample of 25 fill-ups by one driver?

s = 0.65 mpg

b. Within what interval would you expect the sample mean to fall, with 98 percent probability?

From the: 50 - (98/2) = 1st percentile

To the: 50 + (98/2) = 99th percentile

1st percentile:

X when Z has a pvalue of 0.01. So X when Z = -2.327.

By the Central Limit Theorem

99th percentile:

X when Z has a pvalue of 0.99. So X when Z = 2.327.

Between 24.99 mpg and 28.01 mpg.

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step-by-step explanation: