Allegiant Airlines charges a mean base fare of $89. In addition, the airline cha

Question

Allegiant Airlines charges a mean base fare of $89. In addition, the airline charges for making a reservation on its website, checking bags, and inflight beverages. These additional charges average $39 per passenger (Bloomberg Businessweek, October 8 - 14, 2012). Suppose a random sample of 60 passengers is taken to determine the total cost of their flight on Allegiant Airlines. The population standard deviation of total flight cost is known to be $40. Allegiant Airline reports a population mean base fare of $89 and a population mean additional fare of $39 per person. What Is the population mean cost per flight? What is the probability the sample mean will be within $10 of the population mean cost per flight (to 4 decimals)? What is the probability the sample mean will be within $5 of the population mean cost per flight (to 4 decimals)?

Explanation / Answer

a) population mean cost per flight =89+39=128

b)std error =std deviation/(n)1/2 =40/(60)1/2 =5.164

hence P(-10/5.164<Z<10/5.164)=P(-1.9365<Z<1.9365)=0.9736-0.0264=0.9472

c)P(-5/5.164<Z<5/5.164)=P(-0.9682<Z<0.9682)=0.8335-0.1664=0.6671

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