Housing Costs a Government Report on Housing Costs Says That

question 41

Essay

Housing costs A government report on housing costs says that single-family home prices
nationwide are skewed to the right, with a mean of $235,700. We want to see how home
prices in Orange County, California compare with those nationwide.
a. We collect price data from a random sample of 50 homes in Orange County, California.
Why is it okay to use these data for inference even though the population is skewed?
b. The standard deviation of the 50 homes in our sample was $25,500. Specify the sampling
model for the mean price of such samples.
c. This sample of randomly chosen homes produced a 90% confidence interval for the
mean price in Orange County of ($233954, $246046). Does this interval provide evidence
that single-family home prices are unusually high in this county? Explain briefly.
d. Suppose we want to collect a new sample. How many homes must we survey to have
90% confidence of estimating the mean local price to within $2000?

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Definitions:

Product Life Cycle

The series of stages a product goes through from introduction to growth, maturity, and decline, affecting marketing, sales strategies, and profitability.

Price Competition

A market condition where businesses focus on undercutting competitors' prices to attract customers.

Profit Declines

A decrease in the difference between revenues earned and expenses incurred over a given period.

Analog TVs

Television systems that use analog signals to transmit video and audio as opposed to digital formats; now largely obsolete with the advent of digital broadcasting.