Questions: A Food Marketing Institute found that 32% of households spend more than 125 a week on groceries. Assume the population proportion is 0.32 and a simple random sample of 368 households is selected from the population. What is the probability that the sample proportion of households spending more than 125 a week is less than 0.34?
Transcript text: A Food Marketing Institute found that $32 \%$ of households spend more than $\$ 125$ a week on groceries. Assume the population proportion is 0.32 and a simple random sample of 368 households is selected from the population. What is the probability that the sample proportion of households spending more than $\$ 125$ a week is less than 0.34 ?
Solution
Solution Steps
Step 1: Calculate the Standard Error
The standard error (SE) of the sample proportion is calculated using the formula:
SE=np(1−p)
where p=0.32 (the population proportion) and n=368 (the sample size). Substituting the values, we find:
SE=3680.32×(1−0.32)≈0.0243
Step 2: Determine the Z-scores
Next, we calculate the Z-scores for the sample proportion. The Z-score for the upper bound (0.34) is calculated as follows:
Zend=SEp^−p=0.02430.34−0.32≈0.8255
For the lower bound, since we are considering the probability of the sample proportion being less than 0.34, the Z-score is:
Zstart=−∞
Step 3: Calculate the Probability
Using the Z-scores, we can find the probability that the sample proportion is less than 0.34. The probability is given by:
P=Φ(Zend)−Φ(Zstart)=Φ(0.8255)−Φ(−∞)
Since Φ(−∞)=0 and Φ(0.8255) approaches 1, we have:
P≈1.0
Final Answer
The probability that the sample proportion of households spending more than \$125 a week is less than 0.34 is approximately