Having a baby in a U.S. hospital costs $2528, on average. A study of 200 AML...
Having a baby in a U.S. hospital costs $2528, on average. A study of 200 AML (Active Management of Labor) deliveries had a mean cost of $2480 with a standard deviation of $766. At the 5% significance level, do the data provide sufficient evidence to conclude, that on average, AML reduces the cost of having a baby in a U.S. hospital? Perform the hypothesis test and provide the results.
A. Do not reject Ho
B. Do not reject Ha
C. No results
D. Reject Ho
Homework Answers
Solution:
This is a left (One) tailed test,
The null and alternative hypothesis is,
Ho: 
2528
Ha:
2528
The test statistics,
t = ( 
-
)/ (s/
)
= ( 2480 - 2528 ) / ( 766 / 
200 )
= -0.886
df = n - 1 = 199
P-value = 0.1883
Since, P-value > level of significance, Do not reject H0.
Do not reject Ho
Option A is correct.
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