Question: A large number of companies are trying to reduce the cost of prescription drug benefits by requiring employees to purchase drugs through a mandatory mailorder program. In a survey of 600 employers, 126 indicated that they either had a mandatory mail-order program in place or were adopting one by the end of 2004 (B. Martinez, Forcing Employees to Buy Drugs via Mail, The Wall Street Journal, February 18, 2004, p. 1B).

a. Construct a 95% confidence interval for the population proportion of employers who had a mandatory mail-order program in place or were adopting one by the end of 2004.

b. Construct a 99% confidence interval for the population proportion of employers who had a mandatory mail-order program in place or were adopting one by the end of 2004.

c. Interpret the intervals in (a) and (b).

d. Discuss the effect on the confidence interval estimate when you change the level of confidence.