Dead space has to do with areas that are ventilated but not perfused (more or less). A shunt is the opposite-- not ventilated, but perfused. D should be the answer.
If everything else stays the same, except for the decreased number of measurements (smaller sample size), the width of the confidence interval will increase. Two ways to get this answer: look at the formula for a confidence interval or use logic.
The formula: x-bar +/- (t critical)*(standard error of the mean) where standard error of the mean is equal to the sample standard deviation, s, divided by the square root of the sample size, n. In the first case, n=20 so 8/(sq.rt.20) is smaller than 8/(sq.rt. 4). Therefore, when n is reduced from 20 to 4, we can see the mean has a larger value added/subtracted from it, making the interval wider when n=4 instead of 20.
The other way to approach that is from a qualitative perspective. The width of a confidence interval represents our uncertainty concerning the estimate. If we have a larger sample, we should be less uncertain about our estimate (narrower interval). Similarly, if we have a smaller sample, we will be more uncertain about our estimate (again, assuming that the only change is sample size). This should make sense, because we would like to have all possible information (no uncertainty), but we can't usually get all the information (so we're left with uncertainty). Simply put, larger samples (more information) get us closer to the truth and reduce our uncertainty about our estimate of that truth (the mean, in this case).
B should be correct.