This depends on which pressure switch you have.  If you have a 40/60 switch, the air pressure in the tank should be set to 38 PSI.  The general rule is to set the pressure at 2 PSI below the cut-in pressure (the pressure at which the pump turns on).
To set this accurately, your well pump must be turned off and all water needs to be drained from the tank.  

Drawdown refers to the amount of water available in a pressure tank for use before the pressure switch turns the pump back on to replenish the supply.  The larger the drawdown, the longer your pump will run for each cycle increasing pump life by reducing the number of times the pump has to turn on.