TABLE 8-10
The president of a university is concerned that illicit drug use on campus is higher than the 5% acceptable level. A random sample of 250 students from a population of 2,000 revealed that 7 of them had used illicit drug during the last 12 months.
-Referring to Table 8-10, the president can be 90% confident that no more than 5% of the students at the university had used illicit drug during the last 12 months.

Question

Quizplus · Accepted Answer

According to Table 8-10, with a sample size of 250, a proportion of 7/250 (or 0.028) and a confidence level of 90%, the margin of error is 0.029. This means that the true proportion of students who have used illicit drugs in the last 12 months is likely between 0.028 - 0.029 and 0.028 + 0.029, or between -0.001 and 0.057. Since the lower end of this confidence interval is less than the 5% acceptable level, the president can be 90% confident that no more than 5% of the students at the university had used illicit drugs during the last 12 months. Therefore, the statement is true.

TABLE 8-10 The President of a University Is Concerned That Illicit Drug