A Retired Statistician Was Interested in Determining the Average Cost

question 113

Multiple Choice

A retired statistician was interested in determining the average cost of a $200,000.00 term life insurance policy for a 60-year-old male non-smoker. He randomly sampled 65 subjects (60-year-old male non-smokers) and constructed the following 95 percent confidence interval for
The mean cost of the term life insurance: ($850.00, $1050.00) . State the appropriate interpretation for this confidence interval. Note that all answers begin with "We are 95 percent confidence that…"

• A) The term life insurance cost of the retired statistician's insurance policy falls between $850.00 and $1050.00
• B) The term life insurance cost for all 60-year-old male non-smokers' insurance policies falls between $850.00 and $1050.00
• C) The average term life insurance cost for sampled 65 subjects falls between $850.00 and $1050.00
• D) The average term life insurance costs for all 60-year-old male non-smokers falls between $850.00 and $1050.00

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Definitions:

Creative Destruction

A concept in economics attributed to Joseph Schumpeter, describing the process by which old industries or technologies are destroyed and replaced by new ones.

Dominant Firms

Companies that have a major share of the market sales, influence, or both, enabling them to set prices within the industry.

Planned Economies

Economic systems where government agencies centrally plan and direct all major economic activities, assigning resources and determining outputs with the aim of achieving specific goals.

U.S. Firms

Companies or businesses that are registered, operate, or have their headquarters in the United States.