Using the fast-food customer data provided above, which of the following correctly computes the probability that the difference in percentages (revamped minus unrevamped) exceeds 10%?
| Restaurant | Sample Size (n) | Proportion (p) |
|---|---|---|
| Revamped | 110 | 0.25 |
| Unrevamped | 120 | 0.19 |
First, compute the standard error as $$\sigma = \sqrt{\frac{0.25*0.75}{110} + \frac{0.19*0.81}{120}} \approx 0.0547$$. Then, find the z-score $$z = \frac{0.10 - 0.06}{0.0547} \approx 0.731$$, so that $$P(Z > 0.731) \approx 0.232$$.
Apply an unwarranted continuity correction leading to a probability calculation around 0.5, which misapplies normal approximation techniques.
Reverse the difference in the numerator to compute $$z = \frac{0.06 - 0.10}{0.0547}$$, which incorrectly yields a negative z-score and an incorrect probability.
Assume a negligible standard error, concluding erroneously that the probability is 0.
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