How does increasing the number of sales in a sample generally affect the conclusions drawn?
Correct Answer
A) It narrows the uncertainty around the estimates
Why this is correct: The statistical principle is that a larger sample size reduces sampling error and provides a more reliable estimate of the population parameter (like a mean price). More data points decrease the variability or 'uncertainty' around the estimate, narrowing the confidence interval. Why the other choices are wrong: 'It guarantees the estimates will be accurate' is wrong; more data improves reliability but cannot guarantee accuracy, especially if the sample is biased. 'It removes the need to verify each transaction' is incorrect; data verification remains essential regardless of sample size. 'It compensates for a sample drawn from one area' is wrong; a large but non-representative (biased) sample still only describes its own narrow population. Exam tip: More sales increase reliability, but they cannot fix a fundamentally unrepresentative sample.
Why This Is the Correct Answer
Why this is correct: The statistical principle is that a larger sample size reduces sampling error and provides a more reliable estimate of the population parameter (like a mean price). More data points decrease the variability or 'uncertainty' around the estimate, narrowing the confidence interval. Why the other choices are wrong: 'It guarantees the estimates will be accurate' is wrong; more data improves reliability but cannot guarantee accuracy, especially if the sample is biased. 'It removes the need to verify each transaction' is incorrect; data verification remains essential regardless of sample size. 'It compensates for a sample drawn from one area' is wrong; a large but non-representative (biased) sample still only describes its own narrow population. Exam tip: More sales increase reliability, but they cannot fix a fundamentally unrepresentative sample.
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