Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

--Please explain these questions. The B&K Real Estate Company sells homes and is currently serving the Southeast region. It has recently expanded to cover the

--Please explain these questions.

The B&K Real Estate Company sells homes and is currently serving the Southeast region. It has recently expanded to cover the Northeast states. The B&K realtors are excited to now cover the entire East Coast and are working to prepare their southern agents to expand their reach to the Northeast.

B&K has hired your company to analyze the Northeast home listing prices in order to give information to their agents about the mean listing price at 95% confidence. Your company offers two analysis packages: one based on a sample size of 100 listings, and another based on a sample size of 1,000 listings. Because there is an additional cost for data collection, your company charges more for the package with 1,000 listings than for the package with 100 listings.

Sample size of 100 listings:

  • 95% confidence interval for the mean of the Northeast house listing price has a margin of error of $25,000
  • Cost for service to B&K: $2,000

Sample size of 1,000 listings:

  • 95% confidence interval for the mean of the Northeast house listing price has a margin of error of $8,000
  • Cost for service to B&K: $10,000

The B&K management team does not understand the tradeoff between confidence level, sample size, and margin of error. B&K would like you to come back with your recommendation of the sample size that would provide the sales agents with the best understanding of northeast home prices at the lowest cost for service to B&K.

In other words, which option is preferable?

  • Spending more on data collection and having a smaller margin of error
  • Spending less on data collection and having a larger margin of error
  • Choosing an option somewhere in the middle

For your initial post:

  • Formulate a recommendation and writ e a confidence statement in the context of this scenario. For the purposes of writing your confidence statement, assume the sample mean house listing price is $310,000 for both packages. "I am [#] % confident the true mean . . . [in context]."
  • Explain the factors that went into your recommendation, including a discussion of the margin of error

For your response posts to your peers, choose two different confidence intervals for your responses. Do you think the agents would prefer a different confidence interval than their management? What advantages and disadvantages would there be in having different confidence intervals for the agents? Explain your thought process and reasoning in your response

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Calculus Single And Multivariable

Authors: Deborah Hughes Hallett, Andrew M Gleason, William G McCallum

8th Edition

1119783267, 9781119783268

More Books

Students also viewed these Mathematics questions