Arbiters are electronic devices that allocate access to shared resources.
A bus arbiter is a device used in a multi-master bus system to decide which bus master will be allowed to control the bus for each bus cycle.
Since, it is given that the parallel arbiter has 5 bus arbiters. Hence, number of bits required to provide 5 bus arbiters are 3 bits (Since, $2^3$ = $8$).
Now encoder is a type of combinational circuit which consist of $2^n$ input lines and $n$ output lines i.e., $2^n X n$ encoder. Now, $n$ = $3$ bits. Therefore, size of encoder is $8 $$X$$ 3$. Similarly decoder is a combinational circuit which consist of $n$-input lines and $2^n$ output lines, i.e., $n$$ X $$ 2^n$ decoder. So size of decoder is $3$ $X$ $8$.