Question

In: Statistics and Probability

Cost of Rehabilitation The Medical Rehabilitation Education Foundation reports that the average cost of rehabilitation for...

Cost of Rehabilitation The Medical Rehabilitation Education Foundation reports that the average cost of rehabilitation for stroke victims is $24,672. To see if the average cost of rehabilitation is lower at a particular hospital, a researcher selects a random sample of 49 stroke victims at one particular hospital and finds that the average cost of their rehabilitation is $23,800. The standard deviation of the population is $3251. At α = 0.004, can it be concluded that the average cost of stroke rehabilitation at the hospital is below $24,672? Source: Snapshot, USA TODAY. Do not use the P-value method. Get 0 point if use the P-value method.

Solutions

Expert Solution

Since the population standard deviation is known and the sample size is greater than 30, we use z-test.

The null and alternative hypothesis are given by,

The test statistic is given by,

It is given that .

Then from t-table, we can find the value of (that is, the last row of t-table)

That is,

We reject Ho if .

Here, . That is, .

Hence we may accept H0.

That is, it is not possible to conclude that the average cost of stroke rehabilitation at the hospital is below $24672.


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