Question

1). The AAA Motor Club reported that the mean price for gasoline in Los Angeles in January 2017 was $2.82/gallon. A sample of 50 stations had an average price of $2.77/gallon. Assume the standard deviation of prices is $0.15. An economist is interested in determining whether the mean price for all LA gas stations is lower than $2.82. State the appropriate null and alternative hypotheses.

2). From the previous problem, calculate the test statistic z*.

3). From the previous problems, between what two z* values in the critical value table does your calculated value lie?

4). From the previous problems, between what 2 p-values in the critical value table does your calculated value lie?

5). From the previous problems, is your test statistically significant at the α = .05 level?

Answer 1