Question

A recent publication states that the average closing cost for purchasing a new home is $7654. A real estate agent believes the average closing cost is different than $7654. She selects 28 new home purchases and finds that the average closing costs are $8270 with a standard deviation of $183. Help her decide if she is correct by testing her claim at αα=0.01.

The correct hypotheses would be:

• H0:μ≤$7654H0:μ≤$7654
  HA:μ>$7654HA:μ>$7654 (claim)
• H0:μ≥$7654H0:μ≥$7654
  HA:μ<$7654HA:μ<$7654 (claim)
• H0:μ=$7654H0:μ=$7654
  HA:μ≠$7654HA:μ≠$7654 (claim)

Since the level of significance is 0.01 the critical value is 2.771 and -2.771

The test statistic is: (round to 3 places)

The p-value is: (round to 3 places)

The decision can be made to:

• reject H0H0
• do not reject H0H0

The final conclusion is that:

• There is enough evidence to reject the claim that the average closing cost is different than $7654.
• There is not enough evidence to reject the claim that the average closing cost is different than $7654.
• There is enough evidence to support the claim that the average closing cost is different than $7654.
• There is not enough evidence to support the claim that the average closing cost is different than $7654.

Answer 1

The statistical software output for this problem is :

HA:μ≠$7654HA:μ≠$7654 (claim)

Test statistics = 17.811

P-value = 0.000

reject H0

There is enough evidence to support the claim that the average closing cost is different than $7654.