Question

A gallup survey indicated that 72% of 18- to 29-year-olds, if given choice, would prefer to start their own business rather than work for someone else. A random sample of 600 18-29 year-olds is obtained today. What is the probability that no more than 70% would prefer to start their own business?

Answer 1

Answer:

The probability that no more than 70% would prefer to start their own business is 0.1423.

Step-by-step explanation:

We are given that a Gallup survey indicated that 72% of 18- to 29-year-olds, if given choice, would prefer to start their own business rather than work for someone else.

Let $\hat p$ = sample proportion of people who prefer to start their own business

The z-score probability distribution for the sample proportion is given by;

                               Z  =  $\frac{\hat p-p}{\sqrt{\frac{\hat p(1-\hat p)}{n} } }$  ~ N(0,1)

where, p = population proportion who would prefer to start their own business = 72%

            n = sample of 18-29 year-olds = 600

Now, the probability that no more than 70% would prefer to start their own business is given by = P( $\hat p$ $\leq$ 70%)

       P( $\hat p$ $\leq$ 70%) = P( $\frac{\hat p-p}{\sqrt{\frac{\hat p(1-\hat p)}{n} } }$ $\leq$ $\frac{0.70-0.72}{\sqrt{\frac{0.70(1-0.70)}{600} } }$ ) = P(Z $\leq$ -1.07) = 1 - P(Z < 1.07)

                                                                       = 1 - 0.8577 = 0.1423

The above probability is calculated by looking at the value of x = 1.07 in the z table which has an area of 0.8577.