Chapter 8

t distribution

a family of probability distributions that can be used to develop an interval estimate of a population mean whenever the population standard deviation sigma is unknown and is estimated by the sample standard deviation s

degrees of freedom

a parameter of the t distribution. when the t distribution is used in the computation of an interval estimate of a population mean, the appropriate t distribution has n-1 degrees pf freedom, where n is the size of the sample

Margin of error

the +- value added to an subtracted from a point estimate in order to develop an interval estimate of a population parameter

confidence interval

another name for an interval estimate

Interval estimate

as estimate of a proportion parameter that provides an interest believed to contain the value of the parameter. for the interval estimates in this chapter, it has the form: point estimate +- margin of error

sigma known

the case when historical data or other information provide a good value for the population standard deviation prior to taking a sample. the interval estimation procedure uses this known value of a standard deviation in computing the margin of error

confidence level

the confidence associated with an interval estimate. for example, if an interval estimation procedure provides intervals such that 95% of the intervals formed using the procedure will include the population parameter, the interval estimate is said to be constructed at the 95% confidence level.

confidence coefficient

the confidence level expected as a demand value. for example, .95 is the confidence coefficient for a 95% confidence interval

sigma unknown

the more common case when no good basis exists for estimating the population standard deviation prior to taking the sample. the interval estimation procedure uses the sample standard deviation s in computing the margin of error

level of significance

the probability that the interval estimation procedure will generate an interval that does not contain Mu