[Math] Probability – trick question

probability

Let $\mu$ be the mean annual salary of Major League Baseball players for 2002. Assume that the standard deviation of the salaries of these players is $\$82,000$. What is the probability that the 2002 mean salary of a random sample of $80$ baseball players was within $\$15,000$ of the population mean, $\mu$? Assume that $n/N \leq 0.05$.

this is a trick question isn't it? the probability is one, since the mean of a sample is always the same as the mean of a population.

Best Answer

Suppose I show you a fair coin. You take this coin and flip it 10 times, and record the number of heads and the number of tails you observed. Even though it is "fair" in the sense that each coin toss has equal probability of landing heads versus landing tails, is it guaranteed that you will observe exactly 5 heads and 5 tails? Of course not. Indeed, if you were to flip the coin an odd number of times, it isn't even possible to get an equal number of heads and tails, despite the coin being fair.

So, this illustrates that a sample mean is not the same as a population mean. The sample mean is a statistic, which is subject to sampling variation--in other words, it is the result of the observations we made, and may change each time we take a sample because there is randomness involved in the process of sampling.

Now, regarding your specific question, we are given that the distribution of salaries has mean $\mu$ and standard deviation $\sigma = 82000$. Then by the Central Limit Theorem, the sample mean $\bar x$ of the salaries of $n = 80$ randomly selected players is approximately normally distributed with mean $\mu$ and standard deviation $\sigma/\sqrt{n} = 9167.88$. The probability that $\bar x$ is within $15000$ of the population mean is then $$\Pr[|\bar x - \mu| \le 15000] = \Pr\left[\left| \frac{\bar x - \mu}{\sigma/\sqrt{n}} \right| \le \frac{15000}{9167.88} \right] = \Pr[|Z| \le 1.63615],$$ where $Z$ is a standard normal random variable (mean = 0, standard deviation = 1). Now we can look this probability up in a $z$-table, which gives us $0.898191$, or about an $89.8\%$ chance that the sample mean is within $15000$ of the population mean.

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