A Regional Hardware Chain Is Interested in Estimating the Proportion

question 163

Multiple Choice

A regional hardware chain is interested in estimating the proportion of their customers who own their own homes. There is some evidence to suggest that the proportion might be around 0.70. Given this, what sample size is required if they wish a 90 percent confidence level with a margin of error of ±.025?

• A) About 355
• B) Approximately 910
• C) Almost 1,300
• D) 100

Understand the concept of marginal utility of income and how it affects risk aversion.

Apply probability concepts to calculate expected income and utility under uncertainty.

Analyze the decision-making process of utility maximizers under different scenarios of risk and uncertainty.

Evaluate the benefits of purchasing insurance based on expected utility theory.

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