Question

An Internal Revenue Oversight Board survey found that 82% of taxpayers said that it was very important for the Internal Revenue Service (IRS) to ensure that high-income tax payers do not cheat on their tax returns (The Wall Street Journal, February 11, 2009).
a. For a sample of eight taxpayers, what is the probability that at least six taxpayers say that it is very important to ensure that high-income tax payers do not cheat on their tax returns? Use the binomial distribution probability function shown in Section 5.4 to answer this question.
b. For a sample of 80 taxpayers, what is the probability that at least 60 taxpayers say that it is very important to ensure that high-income tax payers do not cheat on their tax returns?
Use the normal approximation of the binomial distribution to answer this question.
c. As the number of trails in a binomial distribution application becomes large, what is the advantage of using the normal approximation of the binomial distribution to compute probabilities?
d. When the number of trials for a binominal distribution application becomes large, would developers of statistical software packages prefer to use the binomial distribution probability function shown in Section 5.5 or the normal approximation of the binomial distribution shown in Section 6.3? Explain.



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  • CreatedFebruary 16, 2015
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