This week, we are going through the hypothesis testing procedure.
List each step of hypothesis testing, and for each step, in no less than two sentences, provide details on what is done in each step.
After some consideration, the CEO of ABC Enterprises determined that the mean meal expenditure for the population is really about 57 dollars per day. Accountant X in ABC Enterprises has been collecting receipts from the companys travelers, and 57 dollars felt wrong to her. She had receipts from 10 employees on her desk. Upon averaging them, she found that the mean daily expenditure was 62 dollars with a standard deviation of 3 dollars. She set alpha ? at 0.05.
We are going to conduct a hypothesis test to determine if the mean expenditure is different than 57 dollars.
What is the null hypothesis?
What is the alternative hypothesis?
Is this test one-tailed, or two-tailed, and how do you know?
- Should this test use t or z, and how do you know?
Show the math and compute your test statistic (z or t).
Should the null hypothesis be rejected or failed to be rejected? Why?
What is your conclusion? Is the accountant correct?
- Week 6 Assignment
1.Explain Type I and Type II errors.
- 2.Explain what a p-value is, and explain how it is used to test a hypothesis.
3.Fully explain the steps in hypothesis testing using the p-value method.
- 4.How do we decide whether to use a z test or a t test in hypothesis testing?
5.Work through this hypothesis test using the prompts.
- A sample of 17 account balances of credit company showed a mean of customer balance of $4,450, but the marketing manager claimed that the mean valance for the population was $4,325. The marketing manager did NOT have the population standard deviation, but the sample standard deviation was found to be $500. Use the p-value approach to conduct a full hypothesis test (all steps) that can be used to determine whether the mean of all account balances is significantly difference from $4,325. Let ? = .05.
To help you go through the steps of hypothesis testing, follow these prompts:
- The null hypothesis is
The alternative hypothesis is
- I will use a (choose 1: t / z) in my formula because
I have calculated the value of t (or z) to be
- I have used t (or z) to get the value of p (most likely from a chart or computer printout).
My p value is
Alpha, which is given in the problem, is
When I compared p to alpha, p is (choose 1: greater than/less than) alpha.
- Because of this, I know I should (choose 1: reject/fail to reject) my null hypothesis.
- Choose one: The mean balance is different than $4325 / The mean balance is NOT different than $4325.
- 6.Work through this hypothesis test using each step of hypothesis testing. You may want to borrow the steps from the previous problem.
- A sample of 51 homes for sale in ABC City showed a mean asking price of $258,000, but the city claimed that the mean asking price for the population was $249,000. The population standard deviation of all homes for sale was $19,000. Use the p-value approach to conduct a full hypothesis (all steps follow the guidance in the last problem) that can be used to determine whether the mean asking price is significantly greater than $249,000. Let ? =. 05
