An Internal Revenue Oversight Board survey found that 82% of taxpayers said that it was very important

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An Internal Revenue Oversight Board survey found that 82% of taxpayers said that it was very important for the Internal Revenue Service (IRS) to ensure that high-income tax payers do not cheat on their tax returns (The Wall Street Journal, February 11, 2009).

a. For a sample of eight taxpayers, what is the probability that at least six taxpayers say that it is very important to ensure that high-income tax payers do not cheat on their tax returns? Use the binomial distribution probability function shown in Section 5.4 to answer this question.

b. For a sample of 80 taxpayers, what is the probability that at least 60 taxpayers say that it is very important to ensure that high-income tax payers do not cheat on their tax returns?

Use the normal approximation of the binomial distribution to answer this question.

c. As the number of trails in a binomial distribution application becomes large, what is the advantage of using the normal approximation of the binomial distribution to compute probabilities?

d. When the number of trials for a binominal distribution application becomes large, would developers of statistical software packages prefer to use the binomial distribution probability function shown in Section 5.5 or the normal approximation of the binomial distribution shown in Section 6.3? Explain.


Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Essentials Of Statistics For Business And Economics

ISBN: 9781305081598

7th Edition

Authors: David Anderson, Thomas Williams, Dennis Sweeney, Jeffrey Cam

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