The following data represent the asking price of a simple random sample of homes

Question

The following data represent the asking price of a simple random sample of homes for sale Construct a 99% confidence interval with and without the outlier included Comment on the effect the other has on the confidence interval Click the con to view the table of areas under the t-distribution (a) Construct a 99% confidence interval with the other included. (Round to the nearest integer as needed) (b) Construct a 99% confidence interval with the other removed (c) Comment on the effect the outhit has on the confidence interval. The outlier had no effect on the width of the confidence interval The outlier caused the width of the confidence interval to decrease The outlier caused the width of the confidence interval to increase.

Explanation / Answer

The outlier is $459,900.

a) The statistical software output for 99% confidnece interval with outlier included is:

One sample T confidence interval:
: Mean of variable

99% confidence interval results:

Hence,

99% confidence interval is:

($145914, $302186)

b) The statistical software output for 99% confidnece interval with outlier excluded is:

One sample T confidence interval:
: Mean of variable

99% confidence interval results:

Hence,

99% confidence interval is:

($156917, $248301)

c) Option C is correct. The outlier caused the width to increase.

Variable Sample Mean Std. Err. DF L. Limit U. Limit var3 224050 25157.963 11 145914.24 302185.76

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