The Center on Budget and Policy Priorities (Www

Multiple Choice

The Center on Budget and Policy Priorities (www.cbpp.org) reported that average out-of-pocket medical expenses for prescription drugs for privately insured adults with incomes over 200% of the poverty level was $173 in 2002. Suppose an investigation was conducted in 2012 to determine whether the increased availability of generic drugs, Internet prescription drug purchases, and cost controls have reduced out-of-pocket drug expenses. The investigation randomly sampled 196 privately insured adults with incomes over 200% of the poverty level, and the respondents' 2012 out-of-pocket medical expenses for prescription drugs were recorded. These data are in the file Drug Expenses. Based on the sample data, can it be concluded that 2012 out-of-pocket prescription drug expenses are lower than the 2002 average reported by the Center on Budget and Policy Priorities? Use a level of significance of 0.01 to conduct the hypothesis test.

A) Because t = -2.69 is less than -2.3456, do not reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are not lower than the 2002
Average.
B) Because t = -2.69 is less than -2.3456, reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are lower than the 2002 average.
C) Because t = -1.69 is less than -0.8712, reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are lower than the 2002 average.
D) Because t = -1.69 is less than -0.8712, do not reject H0 Conclude that 2012 average out-of-pocket prescription drug expenses are not lower than the 2002
Average.