You have been hired by the Ford Motor Company to do market research, and you mus

Question

You have been hired by the Ford Motor Company to do market research, and you must estimate the Percentage of households in which a vehicle is owned. How many households must you want to be 94% confident that your sample percentage has a margin of error of three percentage points? a) Assume that a previous study suggested that vehicles are owned in 86% of households. b) Assume that there is no available information that can be used to estimate the percentage of households in which a vehicle is owned. c) Assume that Instead of using randomly selected households, the sample data are obtained by asking readers of the Washington Post newspaper to mall in a survey form. How are the results affected?

Explanation / Answer

a) here p=0.86

and for 94 % CI, z =1.88

margin of error E =0.03

hence sample size n=p(1-p)(Z/E)2 =474 (by rounding up )

b) as we do not previous %, we should consider p=0.5

hence sample size =p(1-p)(Z/E)2 =983 (by rounding up)

c)the result will get affected as we are taking sample from one specific strata and not complete population,

therefore the result can have large amount of deviation from actual proportion.

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