Frederick Is Interested in Whether Residents of His Community Are

question 39

Essay

Frederick is interested in whether residents of his community are opposed to the construction of a party store on the corner of a busy intersection. He randomly polls 150 residents in the community and receives responses from 55 residents. Of those who responded, 60% were opposed to the construction of the party store in the community so Frederick concludes that the majority of residents in his community oppose the construction of the party store. Explain what is wrong with this approach.

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Definitions:

Present Value Tables

A set of tables that provide the factor needed to calculate the present value of a single payment or series of payments to be received in the future.

Investment

The allocation of resources, usually money, in assets or projects with the expectation of generating income or profit.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.

Robinson-Patman Act

A United States federal law aimed at preventing anticompetitive practices by producers, specifically price discrimination.