1. Free gift. A philanthropic organization sends out "free gifts" to people on their mailing list in the hope that the re- ceiver will respond by sending back a donation. Typical gifts are mailing labels, greeting cards, or post cards. They want to test out a new gift that costs $0.50 per item to produce and mail. They mail it to a "small" sample of 2000 customers and find a 90% confidence interval of the mean donation to be ($0.489, $0.879). As a consultant, what recommendation(s) would you make to the organization about using this gift?
2. Collections, part 2. The owner of the collection agency in Exercise 79 is quite certain that they can collect more than $200 per customer on average. He urges that the credit card company run a larger trial. Do you think a larger trial might help the company make a better deci- sion? Explain.