Question

Let μ be the true average price of gasoline price in Texas. The survey company would like to test if gasoline in Texas was significantly different than the national average $2.05 a gallon. The alternative hypothesis to test the claim is H 1 : mu not equal to 2.05. After the calculation, the test statistic is -2.01 and the critical value t subscript a divided by 2 comma space n minus 1 end subscript equals 2.32 . Identify the correct statistical decision?

Answer 1

Let , μ = the true average price of gasoline price in Texas.

The survey company would like to test if gasoline in Texas was significantly different than the national average $2.05 a gallon.

The Null and Alternative Hypothesis is:

H_{​​​​​0} : μ = 2.05 V/s.   H_{​​​​1} : μ 2.05

After the calculation, the test statistic is -2.01

i.e. Cal | t | = 2.01

Critical value= t _{a/2 , (n-1)} = 2.32

Statistical Decision:

Cal | t | = 2.01 < critical value =2.32

We accept the null hypothesis at a level of Significance.

Conclusion:

​​​​​​We failed to reject the null hypothesis. There is insufficient evidence to conclude that the gasoline in Texas was significantly different than the national average $2.05 a gallon.