The Wall Street Journal reported that automobile crashes cost the United States

Question

The Wall Street Journal reported that automobile crashes cost the United States $162 billion annually {The Wall Street Journal, March 5, 2008). The average cost per person for crashes in the Tampa, Florida, area was reported to be $1599. Suppose this average cost was based on a sample of 50 persons who had been involved in car crashes and that the population standard deviation is o = $600. What is the margin of error for a 95% confidence interval? What would you recommend if the study required a margin of error of $150 or less? 252.3 and recommend a larger sample size 152.2 and recommend a smaller sample size 78.23 and recommend a smaller sample size 166.31 and recommend a larger sample size

Explanation / Answer

z value for 95% CI is 1.96

ME=z*sd/sqrt(n)=1.96*600/sqrt(50)=166.31

If we use n=60 we get margin of error as 151.8 so as we increase sample size margin of error reduces

So answer is 166.31 and recommend a larger sample size

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