Question

You are advised to perform the appropriate hypothesis test using pencil and paper, along with a calculator and statistical tables, and then use your working to answer the questions below.

It is claimed that on-line shopping can lead to considerable savings in some areas. One magazine claims that purchasing a personal computer (PC) from an on-line company results on average in savings of at least $750. A consumer group wished to test whether the claim was exaggerated, and a random sample of 43 customers who purchased a PC on-line were contacted and asked to estimate the amount they had saved by purchasing their PC on-line. The mean of these 43 estimates was $732. Assume that the population standard deviation is $53.

A hypothesis test is to be performed to determine whether this data provides sufficient evidence to contradict the magazine's claim at the 1% level.

(a) According to the null hypothesis, the value of the population mean is $Answer. (Answer in the form of a whole number with no decimal point or decimal places.)

(b) Is the test one-tailed or two-tailed? Answer: Answer (answer 1 or 2)

(c) To 3 decimal places the critical value of the test statistic for this hypothesis test is: Answer (Answer in the form x.xxx or -x.xxx)

(d) To 3 decimal places the test statistic calculated from the sample is: Answer (Answer in the form x.xxx or -x.xxx)

(e) Is the magazine's claim contradicted at the 1% level? Answer: Answer (Answer YES or NO)

(f) Would it be contradicted at the 5% level? Answer: Answer (Answer YES or NO)

Answer 1