Question

An automotive dealer advertised in Auto-Trend Magazine that the cost of a hybrid car was less than $10,000. Listed below is a total cost in $000 for a sample of 8 hybrid cars. At the .05 significance level, is it reasonable to conclude the mean cost of a hybrid car is less than $10,000?

10.1

9.8

8.8

10.3

9.0

9.7

8.5

8.6

(A)	State the null hypothesis and the alternate hypothesis. Use a .05 level of significance. (Enter your answers in thousands of dollars.)

H0: μ ≥	______
H1: μ <	______

(B)	State the decision rule for .05 significance level. (Negative amount should be indicated by a minus sign.Round your answer to 3 decimal places.)

Reject H0 if t <

______________

(C)	Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)

Value of the test statistic:

___________

(D)	At the .05 significance level is it reasonable to conclude the mean wedding cost is less than $10,000 as advertised?

Answer 1

Mean of the given data i =9350 Standard deviation s =707.1068 a) Test hypothesis are Ho:u> 10000 Haru< 10000 b) Given df=n-1=8-1 =7 Critical value t: =ta2.d4 =-1.895 Rejection region reject Hoift<-1.895 c) Test statistict=*=*= 9350-10000 = -2.600 P-value=P(t< -2.600)=0.0177 d) Since test statistic t<-1.895 hence reject the null hypothesis Yes, it is reasonable to conclude that the mean wedding cost is less than 10000 as advertised