200
Americans spend billions of dollars on veterinary care each year. Assume that annual dog owner expenditure on health care is normally distributed with a mean of $196 and a standard deviation of $95.
a. What is the probability that a dog owner, randomly selected from the population, spent more than $300 for dog health care in 2003?
b. Suppose a survey of 300 dog owners is conducted, and each person is asked to report the total of their vet care bills for 2003. What is the probability that the mean annual expenditure of this sample falls between $200 and $210?
c. The assumption of a normal distribution in this situation is likely misguided. Why? What effect would this have on your answers?
What is .1379, .2273, and few expensive surgeries compared to most vet visits probably skew the distribution to the right. This would impact the accuracy of the probability in part a, but the Central Limit Theorem tells us that even if the underlying distribution is skewed, for sample size of at least 50, the sampling distribution of sample means is normally distributed, so our answer for part b. would not be impacted.