SCENARIO 8-15 A Wealthy Real Estate Investor Wants to Decide Whether It

question 159

Short Answer

SCENARIO 8-15
A wealthy real estate investor wants to decide whether it is a good investment to build a high-end shopping complex in a suburban county in Chicago.His main concern is the total market value of the 3,605 houses in the suburban county.He commissioned a statistical consulting group to take a sample of 200 houses and obtained a sample mean market price of $225,000 and a sample standard deviation of $38,700.The consulting group also found out that the mean differences between market prices and appraised prices was $125,000 with a standard deviation of $3,400.Also,the proportion of houses in the sample that are appraised for higher than the market prices is 0.24.
-Referring to Scenario 8-15,what will be the 90% confidence interval for the total market price of the houses in the suburban county constructed by the consulting group?

---

Definitions:

Authorized Expenditures

Expenses that have been approved for payment under the terms of a contractual agreement or budgetary consideration.

Spending Legislation

Legislation that dictates how government funds are to be spent, often detailing specific allocations for public sector initiatives and programs.

Negative Externalities

Economic activities that impose a negative effect on an unrelated third party, such as pollution from a factory affecting nearby residents.

Public Choice Economist

An economist who applies economic theories and methodologies to analyze and understand political behavior and decisions, particularly in the context of public policy and government actions.