Question

A cell phone company offers two plans to its subscribers. At the time new subscribers sign up, they are asked to provide some demographic information. The mean yearly income for a sample of 36 subscribers to Plan A is $57,400 with a standard deviation of $9,400. This distribution is positively skewed; the coefficient of skewness is not larger. For a sample of 42 subscribers to Plan B, the mean income is $57,900 with a standard deviation of $9,200.

At the 0.01 significance level, is it reasonable to conclude the mean income of those selecting Plan B is larger?

a. State the decision rule. (Round to 3 decimal places; negative answer should be indicated by a minus sign)

Reject H₀ if t > _______.

b. Compute the value of the test statistic. (Round to 3 decimal places; negative answer should be indicated by a minus sign)

c. What is the p-value? (Round to 4 decimal places)

Answer 1

Let X1:Yearly income of subscriber of plan A

X2: Yearly income of subscriber of plan B

Thus it may concluded at 1% level of significance that the mean yearly income of subscriber of Plan A is greater than subscriber of plan B.

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