In an Introductory Marketing Class Students Were Presented with 6

Essay

In an introductory marketing class students were presented with 6 items they could
bid on in an auction. They were asked to bid privately and also estimate the "typical"
bid for each item by their classmates. The items were randomly selected from a large
list of items that students might purchase. An initial analysis of the data established
the plausibility that the distribution of differences (estimated - actual) is
approximately normal. Actual \& Estimated
Median Bids (\$)
for Typical Goods
$\begin{array}{|c|c|c|c|}\hline \text { Good } & \text { Actual } & \text { Estimated } & \text { Diff } \\\hline \begin{array}{c}\text { Teddy } \\\text { Bear }\end{array} & 1.00 & 4.90 & 3.9 \\ \text { Music CD } & 1.25 & 4.53 & 3.28 \\\text { Red velvet } & 2.70 & 5.44 & 2.74 \\\text { Sachet } & & & \\\begin{array}{c}\text { Soma wooden } \\\text { puzzle }\end{array} & 3.00 & 5.17 & 2.17 \\\begin{array}{c}8 \mathrm{oz} \text { smoked } \\\text { Salmon }\end{array} & 3.00 & 6.67 & 3.67 \\\begin{array}{c}\text { 1 lb Jelly } \\\text { Bellies }\end{array} & 4.00 & 7.30 & 3.3\\\hline\end{array}$

a)Construct a $95 \%$ confidence interval for the mean difference between the actual bid and the estimated "typical" bid for the population of items.


b) Do the data indicate that the mean differs for the actual and estimated "typical" bids? Provide an appropriate statistical justification using your response in part (a).