Question

A rental agent claims that the mean monthly rent, H, for apartments on the east side of town is less than $650. A random sample of 12 monthly rents for apartments on the east side has a mean of $646, with a standard deviation of $19. If we assume that the monthly rents for apartments on the east side are normally distributed, is there enough evidence to conclude, at the 0.1 level of significance, that he is less than $6507 Perform a one-tailed test. Then fill in the table below. Carry your intermediate computations to at least three decimal places and round your answers as specified in the table. H o P The null hypothesis: X S ce The alternative hypothesis: USD DO The type of test statistic Choose D< O The value of the test statistic (Round to at least three decimal places) D X ? The critical value at the 0.1 level of significance (Round to at least three decimal places) 0 Using the 0.1 level of significance, can we conclude that the mean monthly rent for apartments on the east side is less than $650 Yes No

Answer 1

Solution:

The Null hypothesis : Ho : µ ≥ 650

The Alternative hypothesis : H1 : µ < 650

The type of test is : Left tail test

x̄ = 646 , s = 19 , n = 12 , µ = 650

Test Statistic = (646-650)/(19/√12) = -0.729

The Value of the test statistic: -0.729

The critical value at the 0.1 level of significance: -1.363

Using the 0.1 level of significance can we conclude that the mean monthly rent for apartment on east side is less than $650?

No