The management of a local restaurant wants to determine the average monthly amount spent by households in restaurants. Some households in the target market do not spend anything at all. Whereas other households spend as much as $300 per month. Management wants to be 95 percent confident of the findings and does not want the error to exceed plus or minus $5.
a. What sample size should be used to determine the average monthly household expenditure?
b. After the survey was conducted, the average expenditure was found to be $90.30 and the standard deviation was $45. Construct a 95 percent confidence interval. What can be said about the level of precision?