Question

The United States Department of Energy conducts weekly phone surveys on the price of gasoline sold in the United States. Suppose one week the sample average was $4.03, the sample standard deviation was $0.42, and the sample size was 800. Perform a one sided significance test of H0 : u = 4.00 against the alternative HA : u > 4.00.

Answer 1

H0: = 4

Ha: > 4

Test statistics

t = - / S/ sqrt(n)= 4.03 - 4 / 0.42 / sqrt(800)

= 2.02

This is test statistics value.

Critical value at 0.05 level with 799 df = 1.647

Since test statistics falls in rejection region, we have sufficient evidence to reject H0.

We conclude at 0.05 level that we have sufficient evidence to support the claim.