Question

An automobile insurance company claimed that, because of the Covid-19 pandemic, resulting in less automobile driving, they have reduced the monthly premiums that they charged per automobile by at least $50 per month on average. To test this claim, a random sample of 22 automobile policies were allowed to be looked at. This random sample compared the monthly premiums in June, 2020, with the monthly payment before the pandemic (February, 2020) and it was calculated that the monthly premium in June dropped by an average of $44 and that the standard deviation in this this drop in premiums was calculated to be $12.00. At the .05 level of significance, is there sufficient evidence that the insurance company’s claim is false? In answering this question, complete the following in the spaces provided (including diagrams):

Provide hypothesis, decision rule, test statistic, p-value, and conclusion

Answer 1