A restaurant would Ike to estimate the proportion of tips that exceed 18% of its dinner bills

Economics Nov 02, 2020

A restaurant would Ike to estimate the proportion of tips that exceed 18% of its dinner bills. Without any knowledge of the population proportion, determine the sample size needed to construct a 98% confidence interval with a margin of error of no more than 8% estimate the proportion,
The sample size needed ? (Round up to the nearest integer)

Expert Solution

With no prior knowledge of proportion , p = 0.50

Sample size = Z²/2 * p ( 1 - p) / E²

= 2.0537² * 0.5 * 0.5 / 0.08²

= 164.75

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