Question

At my jewelry store, Diane's Diamonds, the average price of my diamonds is normally distributed with...

At my jewelry store, Diane's Diamonds, the average price of my diamonds is normally distributed with mean of $4000. I am wondering if a new shipment from Russia costs significantly more than my usual inventory. I get a sample of 7 of the new diamonds, and their average cost is $5200, with a standard deviation of $1300. Test to see if the new diamonds cost more than my inventory. Use 4 steps of hypothesis testing and alpha = .05. What is the second part of step 2?

Options:

the critical value of z = 1.96

the critical value of z = 1.645

the critical value of t = 1.943

the critical value of t = 2.447

Math   Statistics-And-Probability   
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Answer #1

as test statistic falls in rejection region, we reject null hypothesis and conclude that  new diamonds cost more than my inventory

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