Question

Problem 1:

Expedia would like to test the hypothesis that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris. The following data summarizes the sample statistics for roundtrip flights originating in both cities. Assume that the population variances are equal.

	Originating City
	Philadelphia	Paris
Sample mean	$1,240	$1,060
Sample size	15	19
Sample standard deviation	$270	$240

If Population 1 is defined as flights originating in Philadelphia and Population 2 is defined as flights originating in Paris, using α = 0.05, the critical value for this hypothesis test would be

2.037

2.449

1.694

1.309

Problem 2:

Expedia would like to test the hypothesis that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris. The following data summarizes the sample statistics for roundtrip flights originating in both cities. Assume that the population variances are equal.

	Originating City
	Philadelphia	Paris
Sample mean	$1,240	$1,060
Sample size	15	19
Sample standard deviation	$270	$240

If Population 1 is defined as flights originating in Philadelphia and Population 2 is defined as flights originating in Paris, Expedia would like to set α = 0.05. The p-value for this hypothesis test would be between:

greater than 0.05

0.01 and 0.005

0.05 and 0.025

0.10 and 0.20

Problem 3:

Expedia would like to test the hypothesis that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris. The following data summarizes the sample statistics for roundtrip flights originating in both cities. Assume that the population variances are equal.

	Originating City
	Philadelphia	Paris
Sample mean	$1,240	$1,060
Sample size	15	19
Sample standard deviation	$270	$240

If Population 1 is defined as flights originating in Philadelphia and Population 2 is defined as flights originating in Paris, Expedia would like to set α = 0.05. Which one of the following statements is true?

Because the p-value is greater than α, we fail to reject the null hypothesis and cannot conclude that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris.

Because the p-value is less than α, we fail to reject the null hypothesis and conclude that he average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Paris when compared to a flight originating in Philadelphia.

Because the p-value is less than α, we reject the null hypothesis and conclude that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris.

Because the p-value is greater than α, we don’t have enough evidence to conclude that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris.

Answer 1

The level of significance is, a 0.05 The critical value is, ta-1.694 (Using Excel's (:TNV(probability, deg-freedom ))) Here, probability 2(0.05)-0.10, deg_freedom 32 Hence, t1.694 2) That is, 0.05 and 0.025 Since the p-value is 0.0240 3) The level of significance is, α-0.05 Because the p-value is less than a, we reject the null hypothesis and conclude that the average roundtrip airfare between Philadelphia and Paris is higher for a flight originating in Philadelphia when compared to a flight originating in Paris. Hence, the correct answer is (C)