The Center on Budget and Policy Priorities (Www

question 158

Multiple Choice

The Center on Budget and Policy Priorities (www.cbpp.org) reported that average out-of-pocket medical expenses for prescription drugs for privately insured adults with incomes over 200% of the poverty level was $173 in 2002. Suppose an investigation was conducted in 2012 to determine whether the increased availability of generic drugs, Internet prescription drug purchases, and cost controls have reduced out-of-pocket drug expenses. The investigation randomly sampled 196 privately insured adults with incomes over 200% of the poverty level, and the respondents' 2012 out-of-pocket medical expenses for prescription drugs were recorded. These data are in the file Drug Expenses. Based on the sample data, can it be concluded that 2012 out-of-pocket prescription drug expenses are lower than the 2002 average reported by the Center on Budget and Policy Priorities? Use a level of significance of 0.01 to conduct the hypothesis test.

• A) Because t = -2.69 is less than -2.3456, do not reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are not lower than the 2002
• Average.
• B) Because t = -2.69 is less than -2.3456, reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are lower than the 2002 average.
• C) Because t = -1.69 is less than -0.8712, reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are lower than the 2002 average.
• D) Because t = -1.69 is less than -0.8712, do not reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are not lower than the 2002
• Average.

Recognize conditions under which the pooled proportion estimate and normal approximation are appropriate for testing differences between two population proportions.

Develop confidence interval estimates for ratios of population variances.

Determine the rejection regions for hypothesis tests involving population variances.

Formulate null and alternative hypotheses for statistical tests comparing population parameters.

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Definitions:

Popular

Well-liked by many people or regarded favorably in the public opinion.

Insurance

A contract represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Related Therapy

Therapeutic practices or interventions that are associated with and complement the primary treatment of a patient's condition or disorder.

Homeopathy

A system of alternative medicine based on the principle of treating individuals with highly diluted substances to trigger the body's natural system of healing.