Statement of a problem № m40717


Apublic opinion researcher has a budget of $20,000 for taking a survey. She knows that 90% of all households have telephones. Telephone interviews cost $10 per household; in-person interviews cost $30 each if all interviews are conducted in person, and $40 each if only nonphone households are interviewed in person (because there will be extra travel costs). Assume that the variances in the phone and nonphone groups are similar, and that the fixed costs are c0 = $5000. How many households should be interviewed in each group if a. all households are interviewed in person b. households with a phone are contacted by telephone and households without a phone are contacted in person.

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