A University Wants to Compare Out-Of-State Applicants' Mean SAT Math

question 67

Multiple Choice

A university wants to compare out-of-state applicants' mean SAT math scores (μ₁) to in-state applicants' mean SAT math scores (μ₂) . The university looks at 35 in-state applicants and 35 out-of-state applicants. The mean SAT math score for in-state applicants was 540, with a standard deviation of 20. The mean SAT math score for out-of-state applicants was 555, with a standard deviation of 25. It is reasonable to assume the corresponding population standard deviations are equal. Calculate a 95% confidence interval for the difference μ₁ - μ₂.

• A) [-25.6067, -4.3933]
• B) [-25.7961, -4.2039]
• C) [-25.8124, -4.1876]
• D) [-33.6105, 3.6105]

---

Definitions:

Marginal Revenue

The increase in financial returns a business achieves by disposing of one more unit of a good or service.

Marginal Cost

Marginal cost is the additional cost incurred from producing one more unit of a good or service, vital for decision-making on production levels.

Purely Competitive Firm

A company in a market where there are many buyers and sellers, the products are homogeneous, and there are no barriers to entry or exit, leading to zero economic profit in the long run.

Sinking Funds

Specialized funds set aside or saved by a company to repay debt or bonds, or to replace capital assets in the future.