(13) The average tuition and room and board cost at a small private liberal arts college is reported to be $20,000 per term. A study of 400 small liberal arts colleges find that the average cost per term is $20,100. The population standard deviation is $1,500. If α = 0.05, what is your decision about the average cost?
H0: = 20000
z = - / / sqrt(n)
= 20100 - 20000 / 1500 / sqrt(400)
Critical value at 0.05 level = -1.96 , 1.96
Since test statistics falls in non-rejection region, we do not have sufficient evidence to reject H0.
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