Question

Determine if there is a significant difference in the average price of a gallon of gas in Michigan before and after the Thanksgiving Holiday weekend. The average price difference of 20 stations in the state was 10 cents with a standard deviation of 5 cents. Test at the .05 level of significance. What does the value 10 cents represent?

Answer 1

Given that the sample size is n = 20, mean difference = 10 cents and standard deviation for difference is 5 cents

10 cents represents mean price difference for 20 statistics

t test statistic

degree of freedom = n-1 = 20-1 = 19

In t distribution table, using df(19) and t value (8.94), check t value in left most column and df value in top row, select the intersecting cell, we get

p value = 0.0000

p value is less than significance level 0.05, rejecting the null hypothesis

We can conclude that there is a significant difference between the mean