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Nationwide, the average price of gasoline is $2.69 with a standard deviation of $0.15, In a...

  1. Nationwide, the average price of gasoline is $2.69 with a standard deviation of $0.15, In a random sample of 40 gas stations in this area, the average price is $2.79. At a significance level of 0.05, can one conclude that the average price in this area is higher than nationwide?
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Answer #1

Solution-:

Given :

Hypothesis: Vs (Right tailed test)

Under the test statistic is,

(Calculated value)

Table value: At

(From Z table)

Decision Rule:Here, hence we reject at 5% level of signficance.

Conclusion: We conclude that the average price in this area is higher than nationwide.

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