In: Economics
ANSWER:
Traditional method:
1) n = 20 , mean = $15,560 , s = $3,500
alpha = 0.05 , d.f. = n - 1 = 20 - 1 = 19
h0 : u = 13,252
h0 : u > 13,252
t = ( ( mean - u) / (s / sqrt(n) ) )
t = (15560 - 13252) / ( 3500 / sqrt(20) )
t = 2308 / ( 3500 / 4.47)
t = 2308 / 782.62
t = 2.94
t value of alpha = 0.05 is 1.729
Reject the null hypothesis since the test value falls within the critical region and there is sufficient evidence to suggest that the average tution cost has increased.
2) p value method:
h0 : u = 91,600
h0 : u not equal to 91,600.
n = 28 , mean = 88,500 , u = 91,600 , df = n - 1 = 28 - 1 = 27 , s = 10,000
t statistic = ( ( mean - u ) / / (s / sqrt(n) ) )
t statistic = ( 88500 - 91600) / ( 10000 / sqrt (28)
t statistic = ( -3100) / ( 10000 / 5.29)
t statistic = (-3100 / 1889.82)
t statistic = -1.64
p value of t statistic is 0.1126
p value is greater then the alpha 0.1 that 0.1126 > 0.1 , therefore the null hypothesis is accepted.
3) h0 : sigma <= 1.2
h1 : sigma > 1.2
alpha = 0.01 , s = 1.8 , n = 15 , df = n - 1 = 15 - 1 =14
x^2 = ( n - 1) * s^2 / ( sigma) ^ 2
x^2 = ( 15 - 1) * (1.8) ^ 2 / ( 1.2) ^ 2
x^2 = 14 * 3.24 / (1.44)
x^2 = 45.36 / 1.44 = 31.5
p value of 31.5 is 0.0047 which is less then 0.005 (two tailed test) and that is why we reject the null hypothesis and there is not enough evidencethat the standard deviation is less than or equal to 1.2 minutes.