Examine evidence that people are keeping their cars longer

Reference no: EM131813352

Question: An economist wishes to investigate whether people are keeping cars longer now than in the past. He knows that five years ago, 38% of all passenger vehicles in operation were at least ten years old. He commissions a study in which 325 automobiles are randomly sampled. Of them, 132 are ten years old or older.

a. Find the sample proportion.

b. Find the probability that, when a sample of size 325 is drawn from a population in which the true proportion is 0.38, the sample proportion will be as large as the value you computed in part (a). You may assume that the normal distribution applies.

c. Give an interpretation of the result in part (b). Is there strong evidence that people are keeping their cars longer than was the case five years ago?

Reference no: EM131813352

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