Question

Travelocity would like to test if the standard deviation for roundtrip airfares between New York and London is less than $200. A random sample of 22 roundtrip airfares between New York and London had a standard deviation of $142. Using a = 0.05, the conclusion for this hypothesis test would be that because the test statistic is

A) less than the critical value, we fail to reject the null hypothesis and cannot conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

B) more than the critical value, we can reject the null hypothesis and conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

C) more than the critical value, we fail to reject the null hypothesis and cannot conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

D) less than the critical value, we can reject the null hypothesis and conclude that the standard deviation for the roundtrip airfares between New York and London is less than $200.

Please write down the steps clearly, thank you in advance

Answer 1

Solution:

Given

n = 22 sample size of airfares between New York and London.

population standard deviations of airfares between New York and London

s = $ 142 sample standard deviations of airfares between New York and London

level of significance

To test

. Vs.   

Test statistic

Test statistic

At

from chi square table

The critical value is 32.67

Decision :

Reject Ho

Conclusion : Test statistic is less than the critical value ,we can conclude that the standard deviations for the roundtrip airfares between New York and London is less than $ 200.

Option D is correct.