Suppose You Want to Build a 95% Confidence Interval for the ATE

question 39

Multiple Choice

Suppose you want to build a 95% confidence interval for the ATE when the average outcome for the treated (55 subjects) is 12, with a sample standard deviation of 4, while the average outcome for the control (65 subjects) is 10, with a sample standard deviation of 6. Which of the following would be the proper confidence interval?

• A) 0 ± 1.96 \(\left( \sqrt { \frac { 4 ^ { 2 } } { 55 } + \frac { 6 ^ { 2 } } { 65 } } \right)\)
• B) 0 ± 2.58 \(\left( \sqrt { \frac { 4 ^ { 2 } } { 55 } + \frac { 6 ^ { 2 } } { 65 } } \right)\)
• C) (12 - 10) ± 1.96 \(\left( \sqrt { \frac { 4 ^ { 2 } } { 55 } + \frac { 6 ^ { 2 } } { 65 } } \right)\)
• D) 0 ± 1.96 \(( \sqrt { ( 55 + 65 } )\)

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Definitions:

Fixed Cost

Fixed cost refers to business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, or insurance, integral to budgeting and planning.

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The sum of all costs and expenses, both fixed and variable, incurred by a business during a specific period.

Planning Budget

A budget prepared for a specific level of activity, used as a tool for comparing actual results to see if plans and objectives are being met.

Fixed Cost

Expenses that do not change in relation to the level of goods or services produced within a certain range of activity.