Question

A 90 % confidence interval for the average salary of all CEOs in the electronics industry was constructed using the results of a random survey of 45 CEOs. the interval was ($133, 306, $150, 733). To make useful inferences from the data, it is desired to reduce the width of the confidence interval. Which of the following will result in a reduced interval width?

A) Increase the sample size and increase the confidence level.
B) Decrease the sample size and increase the confidence level.
C) Decrease the sample size and decrease the confidence level.
D) Increase the sample size and decrease the confidence level.

Answer 1

Answer: D) Increase the sample size and decrease the confidence level.

Explanation:

A reduced interval width means that the data is more accurate. This can only be achieved if the sample size is increased because a larger sample size is able to capture more of the characteristics of the variables being tested.

A smaller confidence interval will also lead to a reduced interval width because it means that the chances of the prediction being correct have increased.