Question

Annual starting salaries for college graduates with degrees in business administration are generally expected to be between $10,000 and $50,000. Assume that a 95% confidence interval estimate of the population mean annual starting salary is desired. How large a sample should be taken if the desired margin of error is:

a. $300? Remove all commas from your answer before submitting.

b. $170? Remove all commas from your answer before submitting.

c. $70? Remove all commas from your answer before submitting.

d. Would you recommend trying to obtain the $70 margin of error? Explain.

Yes it is always better to be more accurate or no the sample size would probably be too timely and costly???

Answer 1

(a)

Range = 50,000 - 10,0000 = 40,000

By Range Rule of thumb, Standard Deviation ( ) is given by:

= 40,000/4 = 10,000

= 0.05

From Table, critical values of Z = 1.96

e = 300

Sample Size (n) is given by:

So,

Answer is:

4,269

(b)

e = 170

Sample Size (n) is given by:

So,

Answer is:

13,293

(c)

e = 70

Sample Size (n) is given by:

So,

Answer is:

78,400

(d)

Correct option:

We would not recommend trying to obtain the $70 margin of error.

No, the sample size would probably be too largely and costly.