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Americans have become increasingly concerned about the rising cost of Medicare. In 1990, the average annual Medicare spending per enrollee was $3267: in 2003, the average annual Medicare spending per enrollee was $6883. Suppose you hired a consulting firm to take a sample of fifty 2003 Medicare enrollees to further investigate the nature of expenditures. Assume the population standard deviation for 2003 was $2000.
c. What is the probability the sample mean will be greater that $7500? If the consulting firm tells you the sample mean for the Medicare enrollees they interviewed was $7500, would you question whether they followed correct simple random sampling procedures? Why or why not?
Americans have become increasingly concerned about the rising cost of Medicare. In 1990, the average annual Medicare spending per enrollee was $3267: in 2003, the average annual Medicare spending per enrollee was $6883. Suppose you hired a consulting firm to take a sample of fifty 2003 Medicare enrollees to further investigate the nature of expenditures. Assume the population standard deviation for 2003 was $2000.
c. What is the probability the sample mean will be greater that $7500? If the consulting firm tells you the sample mean for the Medicare enrollees they interviewed was $7500, would you question whether they followed correct simple random sampling procedures? Why or why not?
