Question

A statistician wants to estimate the mean loss suffered by Delta pilots in the labor negotiations to lower Delta salaries to within $2500 with 95% confidence. From a first small survey, the standard deviation of the loss is estimated at $10,000. What size sample should the statistician select?

1. 1206
2. 44
3. 7
4. None of the above

Answer 1

Solution

standard deviation =s =   =10000

Margin of error = E = 2500

At 95% confidence level the z is ,

= 1 - 95% = 1 - 0.95 = 0.05

/ 2 = 0.05 / 2 = 0.025

Z/2 = Z0.025 = 1.96

sample size = n = [Z/2* / E] 2

n = ( 1.96* 10000/ 2500)2

n =61.466

Sample size = n =61

None of the above