The average price for a gallon of gasoline in the United States is $3.73 and in

Question

The average price for a gallon of gasoline in the United States is $3.73 and in Russia it is $3.40 (Bloomberg Businessweek, March 5–March 11, 2012). Assume these averages are the population means in the two countries and that the probability distributions are normally distributed with a standard deviation of $.25 in the United States and a standard deviation of $.20 in Russia. a. What is the probability that a randomly selected gas station in the United States charges less than $3.50 per gallon? b. What percentage of the gas stations in Russia charge less than $3.50 per gallon? c. What is the probability that a randomly selected gas station in Russia charged more than the mean price in the United States? HOW CAN I SOLVE USING EXCEL FUNCTIONS ONLY?!

Explanation / Answer

a)  probability that a randomly selected gas station in the United States charges less than $3.50 per gallon

= P(X<3.50)

= P(Z<(3.50-3.73)/0.25)

= P(Z<-0.92)

Use excel function

1-NORMSDIST(-0.92)

= 0.1788

B) percentage of the gas stations in Russia charge less than $3.50 per gallon

P(X<3.50)

= P(Z<(3.50-3.40)/0.20)

= P(Z<0.50)

Use excel function

1-NORMSDIST(0.50)

= 69.15%

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