Question

8. (This problem is required to submit) Bank of America’s Consumer Spending Survey collected data on annual credit card changes in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment. Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, the sample mean difference was 850 $d (Note: d = difference = groceries – dining out charges) and the same standard deviation was 1123 $ds . d = Difference = groceries charges – dining out charges. 10

a. Use math symbol to formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out. (10%)

b. Use a 0.05 level of significance. What is the p-value? Use the p-value approach, can you conclude that the population means differ? (10%) (Note: without calculation process, explanation, and conclusion, no credit)

c. Which category, groceries or dining out, has a higher population mean annual credit card charge? What is the point estimate of the difference between the population means? What is the 95% confidence interval estimate of the difference between the population means? (10%) (Note: without calculation process and explanation, no credit)

Answer 1