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Chapter 6
Econ 201
6
Economics
Undergraduate 3
04/05/2012

Additional Economics Flashcards

 


 

Cards

Term
What are the three properties of a standard normal distribution?
Definition

1. Its graph is bell-shaped

 

2. It's mean is equal to 0 (μ=0)

 

3. It's standard deviation is equal to 1 (σ=1)

Term
Uniform Distribution
Definition
A continuous random variable has a uniform distribution if its values are spread evenly over the range of probabilities. The graph of a uniform distribution results in a rectangular shape.
Term
Density Curve
Definition

The graph of a continuous probability distribution. It must satisfy the following properties:

 

1. The total area under the curve must equal 1.

 

2. Every point on the curve must have a vertical height that is 0 or greater. (That is, the curve cannot fall below the x-axis).

Term
What are good sample estimators of the population?
Definition

Mean

 

Standard deviation (not perfect)

 

Proportion

 

Variance (σ²) → use this is possible

 

NOT a good estimator?

Median

Range

Term
Central Limit Theorem
Definition

1. The random variable x has a distribution of the mean (μ), and the standard deviation (σ).

 

2. Simple random samples of all sizes n are selected from the population.

 

Conclusions?

1. As sample size increases → approach normal distribution.

 

2. Mean of the sample is the mean of the population (μ)

 

3. Standard deviation of all sample means is σ/square root of n.

Term
In a normal distribution, when is a value considered unusually high?
Definition
When P(x or more) is 0.05
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