Question

Ahmadi, Inc. has been manufacturing small automobiles that have averaged 50 miles per gallon of gasoline in highway driving. The company has developed a more efficient engine for its small cars and now advertises that its new small cars average more than 50 miles per gallon in highway driving. To test this hypothesis at 98% level of confidence, an independent testing service road-tested 64 of the automobiles. The sample showed an average of 51 miles per gallon. Assume that the population standard deviation is 4 miles per gallon. Compute the p-values associated with this test. NOTE: WRITE YOUR ANSWER WITH 4 DECIMAL DIGITS. DO NOT ROUND UP OR DOWN.

Answer 1

Given: ;o = 4;n 64 ; H50 x bar= 51 a 0.02 Hypothesis H1: 50 HO: H50 VS Test statistics Z = x bar - 51 - 50 4 V64 Vn Test Statistic: Z = 2 Hence In excel use the command -NORMSDIST(-2) so we get P value 0.0228 Decision rule: If P value sa Then Reject H0 If P value a Then Fail to Reject H0.

hence we fail to reject H0. Here P Value > Conclusion: Hence there is NOT sufficient evidence to support the claim that new small cars average more than 50 miles per gallon in highway driving.