Question

1. An online pharmacy advertises that its average cost of a monthly prescription for Paxil is $52 with a standard deviation of $4.50. A group of smart statistics students thinks that the average cost is higher. In order to test the store’s claim against their alternative, the students will fill a random sample of 100 prescriptions. Assume that the mean from their random sample is $52.80.

What is the Z-score?

What percentage of samples would have a higher average cost for a prescription (look this up in the z table)?

What percentage of samples would have a lower average cost?

At a p value of .05, do you accept or reject the null hypothesis?

What is the critical value for z (see table in power point)?

2. A certain chemical pollutant in the Genesee River has been constant for several years with mean μ = 34 ppm (parts per million) and standard deviation σ = 8 ppm.  A group of factory representatives whose companies discharge liquids into the river is  now claiming that they have lowered the average with improved filtration devices. A group of environmentalists will test to see if this is true at the 4% level of significance.   Assume that their sample of size 50 gives a mean of 32.5 ppm.

What is the Z-score?

What percentage of samples would have a higher ppm of pollutants?

What percentage of samples would have a lower ppm of pollutants?

At a p<.04 level of significance, do you reject or accept the null hypothesis?

What is the critical value for Z at this significance level (see power point)?

Answer 1

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