The chamber of commerce of a Florida Gulf Coast community advertises that area residential property is available at a mean cost of $125,000 or less per lot. Suppose a sample of 32 properties provided a sample mean of $130,000 per lot and a sample standard deviation of $12,500. Use a .05 level of significance to test the validity of the advertising claim. Anderson, David R.. Essentials of Statistics for Business and Economics (p. 433). South-Western College Pub. Kindle Edition.
(a) Use a 0.05 level of significance to test the validity of the advertising claim.
(b) State the hypotheses.
(c) What is the p-value?
(d) What is your conclusion (use a level of significance of 0.05?
(e) What is the interpretation of your conclusion?

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ismailbajaj ismailbajaj · Answer 1 · 2019-11-11T17:11:08+01:00

Answer:

Reject the null hypothesis

Explanation:

We have:

• mu=125000

• x bar=130000

• s=12500

• n=32

• α=0.05

•Hypothesis:

H knot: mu ≤ 125000

Hα: mu greater than 125000

•Finding value of T statistics:

t= x bar-mu knot/s/√n

We get:

=130000-125000/12500/√32

=2.26

•P value is the probability after solving the value of T statistic

T value in the row:

Df =n-1

=32-1

=31

So,

0.01 is less than P and P is less than 0.025

P value is lower than the α, therefore hypothesis is rejected

P is less than 0.05

So,

H knot is rejected