Question #2016092: Working with Confidence Intervals

Question: Health care for all is a huge priority for the Obama administration. Suppose you are planning a simple random sample survey to estimate the mean family out-of-pocket expenditures for health care in your community during 2009. Suppose that, in 2008, the approximate per family out-of-pocket expenditure was $1325. You want to construct a 90% confidence interval estimate for the community wide family out-of-pocket expenditures to be no wider than$300.

How many families do you require in the sample to satisfy your requirement of a \$300 confidence interval width? In developing your answer, you may assume that your sample will be a simple random sample from a Normal distribution with known standard deviation . σ=750

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