Question

A recent publication states that the average closing cost for purchasing a new home is $8586. A real estate agent believes the average closing cost is more than $8586. She selects 28 new home purchases and finds that the average closing costs are $8582 with a standard deviation of $341. Help her decide if she is correct by testing her claim at αα=0.01.

The correct hypotheses would be:

• H0:μ≤$8586H0:μ≤$8586
  HA:μ>$8586HA:μ>$8586 (claim)
• H0:μ≥$8586H0:μ≥$8586
  HA:μ<$8586HA:μ<$8586 (claim)
• H0:μ=$8586H0:μ=$8586
  HA:μ≠$8586HA:μ≠$8586 (claim)

Since the level of significance is 0.01 the critical value is 2.473

The test statistic is: (round to 3 places)

The p-value is: (round to 3 places)

The decision can be made to:

• reject H0H0
• do not reject H0H0

The final conclusion is that:

• There is enough evidence to reject the claim that the average closing cost is more than $8586.
• There is not enough evidence to reject the claim that the average closing cost is more than $8586.
• There is enough evidence to support the claim that the average closing cost is more than $8586.
• There is not enough evidence to support the claim that the average closing cost is more than $8586.

A new baker is trying to decide if he has an appropriate price set for his 3 tier wedding cakes which he sells for $84.68. He is particullarly interested in seeing if his wedding cakes sell for less than the average price. He searches online and finds 23 of the competitors in his area that sell 3 tier wedding cakes with a mean price of $87.73 with a standard deviation of $6.19. Help the new baker by testing his his claim with a 0.10 level of significance.

The correct hypotheses would be:

• H0:μ≤$84.68H0:μ≤$84.68
  HA:μ>$84.68HA:μ>$84.68 (claim)
• H0:μ≥$84.68H0:μ≥$84.68
  HA:μ<$84.68HA:μ<$84.68 (claim)
• H0:μ=$84.68H0:μ=$84.68
  HA:μ≠$84.68HA:μ≠$84.68 (claim)

Since the level of significance is 0.10 the critical value is 1.321

The test statistic is: (round to 3 places)

The p-value is: (round to 3 places)

The decision can be made to:

• reject H0H0
• do not reject H0H0

The final conclusion is that:

• There is enough evidence to reject the claim that his wedding cakes sell for less than the average price.
• There is not enough evidence to reject the claim that his wedding cakes sell for less than the average price.
• There is enough evidence to support the claim that his wedding cakes sell for less than the average price.
• There is not enough evidence to support the claim that his wedding cakes sell for less than the average price.

Answer 1