Question

Gamma Corporation is considering the installation of governors on cars driven by its sales staff. These devices would limit the car speeds to a preset level, which is expected to improve fuel economy. The company is planning to test several cars for fuel consumption without governors for 1 week. Then governors would be installed in the same cars, and fuel consumption will be monitored for another week. Gamma Corporation wants to estimate the mean difference in fuel consumption with a margin of error of estimate of 2 mpg with a 90% confidence level. Assume that the differences in fuel consumption are normally distributed and that previous studies suggest that an estimate of sd=3sd=3 mpg is reasonable. How many cars should be tested? (Note that the critical value of tt will depend on nn, so it will be necessary to use trial and error.)

Answer 1

Confidence interval is given by CI = ẋ   ±z