Both Delta Airlines and USAir filed for bankruptcy. A study of the impact of bankruptcy on the fares charged by U.S. airlines was published in Research in Applied Economics (Vol. 2, 2010). The researchers collected data on Orlando-bound airfares for three airlines-Southwest (a stable airline), Delta (just entering bankruptcy at the time), and USAir (emerging from bankruptcy). A large sample of nonrefundable ticket prices was obtained for each airline following USAir's emergence from bankruptcy, and then a 95% confidence interval for the true mean airfare was obtained for each. The results for 7-day advance bookings are shown in the accompanying table.
Airline 95% Confidence Interval
Southwest................................($412, $496)
Delta................................ ......($468, $500)
USAir................................ ....($247, $372)
a. What confidence coefficient was used to generate the confidence intervals?
b. Give a practical interpretation of each of the 95% confidence intervals. Use the phrase "95% confident" in your answer.
c. When you say you are "95% confident," what do you mean?
d. If you want to reduce the width of each confidence interval, should you use a smaller or larger confidence coefficient? Explain.