Arizona State University (ASU) ECN221 Business Statistics Exam 2 Practice

In point estimation, the goal is to use data from a sample to provide a single value that serves as an estimate of a population parameter. This process relies on a sample statistic, which is a numerical value calculated from the sample data. For example, if you want to estimate the average income of a population, you might calculate the average income of a sample from that population. This sample average is the sample statistic that serves as your point estimate for the population mean.

The other options involve terms that do not reflect the correct underlying concept in point estimation. A population statistic would refer to metrics calculated from the entire population rather than from a sample, while observational statistics do not represent a recognized category in statistical theory. A derived variable, although useful in some contexts, does not specifically pertain to the act of estimating a population parameter from a sample. Thus, using a sample statistic is the appropriate and established method for point estimation.