4. Two treatment costs for a particular medical issue are being compared. The av

Question

4. Two treatment costs for a particular medical issue are being compared. The average cost of a sample of 210 randomly selected subjects for treatment A was $490 with a standard deviation of S32. The average cost for a sample of 180 randomly selected subjects for treatment B was $500, with standard deviation $48. Assume the df = 300 (a) Find the lower bound for the 99% confidence interval (b) Find the upper bound for the 99% confidence interval (c) Interpret your interval from (a,b) in terms of the (d) Does your interval suggest that the costs are differ- for the difference in costs for the difference in costs problem ent? (e) If we increased the confidence level (ie, (1-a)100%), would the new interval be wider or narrower than that found in (a)?

Explanation / Answer

SInce p-value > 0.01, the differene is not significant.

If we increased the confidence level, the new interval will be wider.

Difference 10.000 Standard error 4.081 99% CI -0.5298 to 20.5298 t-statistic 2.450 DF 388 Significance level P = 0.0147

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