Question

6. The college bookstore tells prospective students that the average cost of its textbooks is $42 with a standard deviation of $2.50. A group of smart statistics students thinks that the average cost is higher. In order to test the bookstore’s claim against their alternative, the students will select a random sample of size 100. Assume that the mean from their random sample is $42.80. Perform a hypothesis test at the 5% level of significance and state your decision

Answer 1

Solution :

= 42

=42.80

S =2.50

n = 100

This is the right tailed test .

The null and alternative hypothesis is ,

H0 :    = 42

Ha : >42

Test statistic = t

= ( - ) / S / n

= (42.80 - 42) / 2.50 / 100

= 3.20

Test statistic = t = 3.20

P-value =0.0009

= 0.05  

P-value <

0.0009 < 0.05

Reject the null hypothesis .

There is sufficient evidence to suggest that