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Before entering into wage negotiations, the workers' representative of the newly- formed farm workers trade union wanted to know the average wage of its union members. The average wage of a random sample of 50 members was found to be R2 420 per month with a sample standard deviation of R160 per month. Assume wages are normally distributed.
(a) What is the 90% confidence interval estimate for the true mean monthly wages paid to farm workers?
(b) What is the 99% confidence interval estimate for the true mean monthly wages paid to farm workers?
(c) Compare and comment on the results of (a) and (b).
(d) Compute the confidence intervals in (a) and (b) using Excel's TINV formula.
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