The format of this question is obviously not GMAT-like, since the Word Problem is quite long and the question posed does not mirror any of GMAC's problems. In addition, the GMAT will not ask about "margin of error," and every GMAT PS question has 5 answer choices, not 4. I would say this is actually more like a CR problem than a Quant problem since we're using logic and not math to solve.
Nonetheless, for those interested, the answer is C.
Here's how we can break down the information from the passage in shorthand:
- 75 students selected
- mean = 89
- margin of error = 4.28
We're asked to find a SMALLER margin of error.
The thing we're supposed to infer is that the smaller the sample size, the greater the margin of error. Logically, if we're only relying on limited data, we can be less "sure" of our conclusion. Again, just to be clear: I have never seen a GMAT question requiring knowledge of this concept.
Back to our regularly schedule programming: As the sample size increases, the margin of error decreases. So we're looking for an answer choice with a sample size of more than 75. Only C and D fit this requirement, and only C fits the scope of the passage by dealing with the same department.
