How many schools should I apply to? The more means the higher your chance of admission since you spread your portfolio across schools with various tiers (quality). However, this also means that you will have to pay upfront a high cost of applications. The chart below gives you a simplified view of total expenses as a function of schools applied. Note that this is the minimum application cost. For cost details you can read here.
It is usually meaningless when applying to more than 10 schools, however applying to only 2-3 schools may be a risky route. The number of schools applied depend on how important it is to be admitted in the following academic year. If you need to be admitted, in order not to lose a year of not being a student, applying to 5-7 schools makes sense. Otherwise, 3-4 schools should be sufficient.
When choosing the schools, spread your risk. Know your ability. If you know your TOEFL and GRE, compared them to the average scores of the admitted students. Try to apply to 2 schools that you think you will most likely be admitted, one school that you would really really like to get in, and one school as your back-up in case you think you are over-optimistic. This way, you cover 4 schools in your applications. You can of course double the applied schools to increase your chance, but it comes a heavy penalty of spending.
Beyond the need to wisely choose the schools and the amount to apply to, is to know yourself. Applying to 100 schools when you have TOEFL and GRE way under average will not help you get anywhere…