Assume we wish to determine what proportion of patients in an HMO spend more than $500 on prescription medications over 12 months. In the random sample of 150 patients, 34% spent more than $500.
a. Develop a 95% confidence interval for true proportion of patients who spend more than $500 on prescription medications for each year.
b. How many subjects would be needed to determine the true proportion who spend more than $500 on prescription medications per year with margin of error no more than 2%, with 95% confidence?