Suppose that the manager of a local camera shop wants to estimate the average ex

Question

Suppose that the manager of a local camera shop wants to estimate the average expenditure per household on camera equipment. She realizes that there may be quite a bit of variation in how much consumers spend, and she estimates that the standard deviation should be $200. (a) Calculate the sample size needed for the various levels of precision and confidence. Show your calculations: Precision Confidence Level Sample Size Needed $10 95% ________________ $10 99% ________________ $10 90% ________________ $20 90% ________________ $20 99% ________________

Explanation / Answer

Result:

Suppose that the manager of a local camera shop wants to estimate the average expenditure per household on camera equipment. She realizes that there may be quite a bit of variation in how much consumers spend, and she estimates that the standard deviation should be $200. (a) Calculate the sample size needed for the various levels of precision and confidence. Show your calculations:

Precision Confidence Level Sample Size Needed

$10      95%    1537

Sample size = (z2*s2)/d2

n= (1.962*2002)/102 =1536.6

$10      99%    2655

n= (2.5762*2002)/102 =2654.3

$10      90%    1083

n= (1.6452*2002)/102 =1082.4

$20      90%    271

n= (1.6452*2002)/202 =270.6

$20      99%    664

n= (2.5762*2002)/202 =663.57

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