Exhibit 16.2 A researcher wishes to estimate the average annual expenditures per household on gasoline.The estimate must be accurate within plus or minus $50 and the estimated standard deviation for such expenditures is $400.
Refer to Exhibit 16.2.Given estimates and specifications that the population standard deviation is $200,TOTAL precision is $100 and the researcher wishes to be 95% confident in the result,the required sample size is
A)42.
B)32.
C)16.
D)64.
E)Not enough information given.

Question

Quizplus · Accepted Answer

We can use the formula for sample size calculation with a specified level of confidence:

n = (Zα/2 * σ / d)^2

where Zα/2 is the critical value from the standard normal distribution at the specified confidence level (95% in this case), σ is the estimated population standard deviation, and d is the total precision required.

Plugging in the given values, we get:

n = (1.96 * 400 / 100)^2 = 64

Therefore, the required sample size is 64 households.