5. (Problem 2.10) : For each of the following questions, explain weather a confi

Question

5. (Problem 2.10) : For each of the following questions, explain weather a confidence interval for a mean response or a prediction interval for a new observation is appropriate.

(a) What will be the humidity level in this greenhouse tomorrow when we set the temperature level at 31C?

(b) How much do families whose disposable income is $23, 500 spend, on the average, for meals away from home?

(c) How many kilowatt-hours of electricity will be consumed next month by commercial and industrial users in the Twin Cities service area, given that the index of business activity for the area remains at its present level?

Explanation / Answer

5. (Problem 2.10) : For each of the following questions, explain weather a confidence interval for a mean response or a prediction interval for a new observation is appropriate.

(a) What will be the humidity level in this greenhouse tomorrow when we set the temperature level at 31C?

Prediction interval is appropriate

We are predicting humidity level from temperature level.

(b) How much do families whose disposable income is $23, 500 spend, on the average, for meals away from home?

Confidence interval is appropriate.

We are calculating confidence interval for income.

(c) How many kilowatt-hours of electricity will be consumed next month by commercial and industrial users in the Twin Cities service area, given that the index of business activity for the area remains at its present level?

Prediction interval is appropriate.

We are predicting electricity consumed from index of business activity.

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