An Economist Is Interested in Studying the Incomes of Consumers

question 34

Multiple Choice

An economist is interested in studying the incomes of consumers in a particular region. The population standard deviation is known to be $1,000. A random sample of 50 individuals resulted in an average income of $15,000. What total sample size would the economist need to use for a 95% confidence interval if the width of the interval should not be more than $100?

• A) n = 1537
• B) n = 385
• C) n = 40
• D) n = 20

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Definitions:

Allocate Resources

The process of assigning available assets, time, and effort to various tasks or purposes in order to achieve specific goals.

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Private Goods

Goods that are excludable and rivalrous in consumption, meaning access can be limited and consumption by one individual prevents others from consuming the same good.

Public Goods

Goods that are non-excludable and non-rival in consumption, meaning they are available for everyone to consume regardless of who pays and one person's consumption does not reduce availability to others.