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Question: The market research director for Dotty s Department Store wants to study women s spending on cosmetics. A survey of the store s credit card holders is designed in order to estimate the proportion of women who purchase their cosmetics primarily from Dotty s Department Store and the mean yearly amount that women spend on cosmetics. A previous survey found that the standard deviation of the amount women spend on cosmetics in a year is approximately $18.
a. What sample size is needed to have 99% confidence of estimating the population mean to within ±$5?
b. What sample size is needed to have 90% confidence of estimating the population proportion to within ±0.045?
c. Based on the results in (a) and (b), how many of the stores credit card holders should be sampled? Explain.
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