Rising cost of health care

1. For many years businesses have struggled with the rising cost of health care. But recently, the
increases have slowed due to less inflation in health care prices and employees paying for a
larger portion of health care benefits. A recent Mercer survey showed that 52% of U.S. employers
were likely to require higher employee contributions for health care coverage in 2009
(BusinessWeek, February 16, 2009). Suppose the survey was based on a sample of 800 companies.
Compute the margin of error and a 95% confidence interval for the proportion of
companies likely to require higher employee contributions for health care coverage in 2009.
2. America’s young people are heavy Internet users; 87% of Americans ages 12 to 17 are
Internet users (The Cincinnati Enquirer, February 7, 2006). MySpace was voted the most
popular website by 9% in a sample survey of Internet users in this age group. Suppose 1400
youths participated in the survey. What is the margin of error, and what is the interval estimate
of the population proportion for which MySpace is the most popular website? Use
a 95% confidence level.

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