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15 May, 18:17

The chamber of commerce of a Florida Gulf Coast community advertises that area residential property is available at a mean cost of $125,000 or less per lot. Suppose a sample of 32 properties provided a sample mean of $130,000 per lot and a sample standard deviation of $12,500. Use a. 05 level of significance to test the validity of the advertising claim. Anderson, David R ... Essentials of Statistics for Business and Economics (p. 433). South-Western College Pub. Kindle Edition.

(a) Use a 0.05 level of significance to test the validity of the advertising claim.

(b) State the hypotheses.

(c) What is the p-value?

(d) What is your conclusion (use a level of significance of 0.05?

(e) What is the interpretation of your conclusion?

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Answers (1)
  1. 15 May, 18:21
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    Reject the null hypothesis

    Explanation:

    We have:

    • mu=125000

    • x bar=130000

    • s=12500

    • n=32

    • α=0.05

    •Hypothesis:

    H knot: mu ≤ 125000

    Hα: mu greater than 125000

    •Finding value of T statistics:

    t = x bar-mu knot/s/√n

    We get:

    =130000-125000/12500/√32

    =2.26

    •P value is the probability after solving the value of T statistic

    T value in the row:

    Df = n-1

    =32-1

    =31

    So,

    0.01 is less than P and P is less than 0.025

    P value is lower than the α, therefore hypothesis is rejected

    P is less than 0.05

    So,

    H knot is rejected
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