Question

Pennsylvania Refining Company is studying the relationship between the pump price of gasoline and the number of gallons sold. For a sample of 20 stations last Tuesday, the correlation was 0.44.

1. State the decision rule for 0.010 significance level. (Round your answer to 3 decimal places.)

2. Compute the value of the test statistic. (Round your answer to 3 decimal places.)

Answer 1

Solution: Here the given information are

correlation = r = 0.44, number of sample = n= 20, significance level = = 0.01

Null and alternative hypothesis

:

:

1) Decision rule

Critical value = = = 2.861

Reject , if t > .

2) test statistic

t=

=

=2.079

Here Calculated value < Table value. ( t=2.079< =2.861 ). So we can cannot reject .

We accept the null hypothesis.