Question: Is Starbucks coffee overpriced? The Minneapolis Star Tribune (August 12, 2008) reported that 73% of Americans say that Starbucks coffee is overpriced. The source of this information was a national telephone survey of 1,000 American adults conducted by Rasmussen Reports.

a. Identify the population of interest in this study.

b. Identify the sample for the study.

c. Identify the parameter of interest in the study.

d. Find and interpret a 95% confidence interval for the parameter of interest.

The context indicates that the Minneapolis Star Tribune deals with Americans. Therefore, it can be envisaged that the Americans must be referred to as the population of interest.

In this context, the Rasmussen Reports deal with the 1000 American adults to assess whether the conclusion drawn by the Minneapolis Star Tribune is right. Therefore, it can be envisaged that the sample size is 1,000 Americans.

Here, the Minneapolis Star Tribune and Rasmussen reports deal with Americans' opinion regarding overpricing of Starbucks coffee. Therefore, the parameter of interest is the proportion of Americans considering the coffee produced by Starbucks is overpriced.

In the calculation shown below, the answer has been kept in the form of 's' because the value of standard deviation is not known, and the z value is 1.96 at 95% confidence interval:

$$\begin{gathered} CI=\overline{X}\pm Z\frac{S}{\sqrt{n}} \\ =73\pm 1.96\frac{S}{31.63} \\ =73\pm 0.06s \end{gathered}$$

CI is the confidence interval, $\overline{x}$is the mean, z is the table value, s is the standard deviation and n is the sample size.

Therefore the upper end is 73+0.06, and the lower end is 73-0.06.These values mainly show that there is 95% chance that the conclusion drawn by the Minneapolis Star Tribune is right.