In: Economics
Ans) - Given,
n= 60 (Randomly chosen students)
no. of students travel by bus = 32
let, 'p' be the probability of students travel by bus
so, p = [no. of students travel by bus]/n
p = 32/60
[p = 0.53]
99% confidence level
We have formula for calculating confidence interval
Where, p: probability of favourable outcome (here p=0.53)
n: sample size (here n=60)
z: corresponding ‘z’ value at 99% confidence level
Calculating ‘z’:
Take, α = 99% = 0.99
(1- α)/2 = (1-0.99)/2 = 0.005
Now, 1 – [(1- α)/2] = 1-0.005 = 0.995
Hence, the value of ‘z’ statistic from z table corresponding to 0.995 will be the value of ‘z’
So, from z table
[z = 2.58]
hence, confidence interval (C.I.)
Hence, Required confidence interval (C.I.) is (0.53+0.166 , 0.53-0.166).
C.I. = (0.696 , 0.364).
NOW IF 1000 STUDENTS CHOSEN AT RANDOM, THEN
New n=1000
Remaining values will be same i.e.
p = 0.53, z=2.58 (at 99% confidence level)
So, put these values in confidence interval formula to find new C.I.
New confidence interval (C.I.) at n=1000 is (0.53+0.0405 , 0.53-0.0405)
C.I. = (0.5705 , 0.4895).
Conclusion: When the sample size is increased (i.e. from 60 to 1000 randomly selected student), the confidence interval with increased sample size became narrow i.e. the width of confidence interval reduced with increased sample size.