Question

Small Mean Problem. Grandfather clocks have a particular market in auctions. One theory about the price at an auction is that it is higher when there are 10 or more bidders. From published data, the average price of all grandfather clocks is given as $1,327. You are not given a standard deviation for all clocks. You are given a random sample of 14 purchases of grandfather clocks at auctions in Pennsylvania where there are 10 or more bidders. Assume your sample is random and approximately normal.

The sample statistics are:

Mean = $1,491.43

Std Dev = $411.53

C.V. = 27.59

N = 14

You are asked to test to see if the price is higher than $1,327 when there are 10 or more bidders. You will use alpha = .05. Based of the result of this hypothesis test, you would reject the Null Hypothesis?

This is a true or false question.

Answer 1

The statistical software output for this problem is:

One sample T summary hypothesis test: : Mean of population Ho : = 1327 HA > 1327 Hypothesis test results: Mean Sample Mean Std. Err. DF T-Stat P-value 1491.43 109.98602 13 1.4950082 0.0794

In above output, p - Value is greater than 0.05 significance level, so we do not reject the null hypothesis.

The statement is False.