Question

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for smal, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies Size of Company Small Medium Large Health Insurance Yes 40 62 87 No 10 13 13 Total 50 75 100 a. Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use α = .05. Use Table 12.4 Compute the value of the x 2 test statistic (to 2 decimals) 3.09 The p value is greater than .10 What is your conclusion? Cannot reject the assumption that health insurance coverage and size of the company are independent ▼ b. The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number) Small 30 Medium Large 13 Based on the percentages calculated above, what can you conclude? Small companies have a higher percentage of no coverage than large and medium companies ▼

Answer 1