51. Personal Health Expenditures.

Data made available through the Petersen Kaiser Health System

Tracker in May 2018 showed health expenditures were $10,348 per person in the United States. Use
$10,348 as the population mean and suppose a survey research firm will take a sample of 100 people to
investigate the nature of their health expenditures. Assume the population standard deviation is $2500.

1. Show the sampling distribution of the mean amount of health care expenditures for a sample
of 100 people.
Population mean = 10348
Sample = 100
Standard Deviation = 2500

Sampling Distribution of the Mean

- If following a simple random sample distribution, the expected value of x =
Population mean = 10348
Standard Deviation = 2500/(100)½ = 25
2. What is the probability the sample mean will be within ± $200 of the population mean?
Population Mean = 10348
Population Standard Deviation = 2500
Sample Number = 100

Prob (X <= 10148) = NORM.DIST(10548, 10348, 2500. 1) = 53.19%

Prob (X <= 10148) = NORM.DI.ST(10148, 10348 2500. 1) =46.81%
Prob( 10148 <= x <= 10548) = 53.19%- 46.81% = 6.38%

3. What is the probability the sample mean will be greater than $12,000? If the survey research
firm reports a sample mean greater than $12,000, would you question whether the firm
followed correct sampling procedures? Why or why not?

Prob (X <= 12000) = NORM.DIST (12000.10348, 2500, 1) = 74.56%

Prob (X >= 12000) = 1–74.56% = 25.44%