Question

In order to determine the average price of hotel rooms in Atlanta, a sample of 64 hotels was selected. It was determined that the average price of the rooms in the sample was $108.50 with a known population standard deviation of $16.

1. Formulate the hypothesis to determine whether of not the average room price is significantly different from $112.

2. Compute the test statistics.

3. At 90% confidence using the p-value approach, test the hypothesis. What is your conclusion and why?

4. Repeat the hypothesis testing with the critical value approach. What is your conclusion and why?

Answer 1

Answers Goven, sample enech) - 64 mean (T) = $108,50 standard devoats onto )=816. Nall and attunative hypothes. Hot = 8112 Ha : M 78112 pest Halsstre (7)= X-4 106.50-1/2 a way = -1.5 -1.75 2 126.78 e ♡ Pralue P-value from fut statistic Case P-value = P(2-dots) From nolmal standard table = 0.04006 No. 0401 P-talee = 0.0401 i If Pralee & & thon will not want to P-value , & then wall redest Ho.

Hus 90%. contodence, &- 0.1 conclusions P-value assons P-value <a 10. 1) level of signifecance Benu, we woll reeant the hall hypotheses (Ho) Crotical ralen for statistic is test then for 2-Ool and df (deffree of freedom dt-n-1=641 -62 tcast (2-0. 1, df = 63) from the t-table tuatie-value = 1. 294 For Cartocal value approach of tral trate then wall not recent the nall hypothers (Ho) Ecal <teatre then woll reeet the null hypothesis CHO) conclusion: Hus tcul 61.75) <tcastoe (1.294). Heny we will went the null hypotheses (HO) Refect the null hypotheses Holl