Question

A study investigated maintenance and repair costs for automobiles. A random sample of 39 automobile owners were asked how much they spent on maintenance and repair costs in the last year. The average amount spent was 1387.782 dollars with a standard deviation of 170 dollars. Is there evidence at the 0.05 level that maintenance and repair costs exceeds 1320 dollars annually?

• HoHo: Select an answer μ p̂ p ȳ  ? ≠ = > <       HaHa:Select an answer p̂ p ȳ μ  ? = ≠ < >  
• αα =  
• Test Statistic: t =   (Note: round the t-score to two decimal places)
• probability = Select an answer 0.0172 0.0086 0.9914   
• decision: Select an answer Reject H₀ Fail to reject H₀
• At the 0.05 level, there Select an answer is is not  significant evidence to conclude the mean maintenance and repair cost is Select an answer different than less than greater than  than  dollars.

Answer 1

Below are the null and alternative Hypothesis,
Null Hypothesis, H0: μ = 1320
Alternative Hypothesis, Ha: μ > 1320

α = 0.05
Test statistic,
t = (xbar - mu)/(s/sqrt(n))
t = (1387.782 - 1320)/(170/sqrt(39))
t = 2.49

P-value Approach
P-value = 0.0086
As P-value < 0.05, reject the null hypothesis.

is significant evidence to conclude the mean maintenance and repair cost is greater than 1320 dollars.