How much is the cost of a hospital stay increasing? The mean cost of one day in a semiprivate room was reported to be $4848 in 2005 and $5260 in 2006 (The Wall Street Journal, January 2, 2007). Assume the estimate for 2005 is a sample mean based on a sample size of 80 and the estimate for 2006 is a sample mean based on a sample size of 60.

a. Develop a point estimate of the increase in the cost of a semiprivate hospital room from 2005 to 2006.

b. Historical data indicate that a population standard deviation of $800 is a reasonable assumption for both years. Compute the margin of error for your estimate in part (a). Use 95% confidence.

c. Develop a 95% confidence interval estimate of the increase in cost for a semiprivate room.

Essentials of Statistics for Business and Economics

6th edition

Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams

ISBN: 978-1111533847

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