Suppose a study of 196 randomly sampled privately insured adults with incomes over 200% of the current poverty level is to be used to measure out-of-pocket medical expenses for prescription drugs for this income class. The sample data are in the file DRUG EXPENSES attached.
a. Construct a 95% confidence interval. Based on the information.
b. If the insurance company wanted the margin of error to be plus or minus $2.00 How many observations would the insurance company need? Use the sample standard deviation as a proxy for the population standard deviation and keep the same significance level.