Question

I wish to show that the average apartment rent in Atlanta is over $1200 per month. I took a simple random sample of 81 and found the sample mean was $1250 with a standard deviation of $36. Let alpha=.10 Critical value = _____

Answer 1

At 10% level of significance, we want test whether the average apartment rent in Atlanta is over $1200 per month.

In a random sample of n=81,

The sample mean is $1250

s=$36

The null and alternative hypothesis is:

The test statistic is:

. ### since sample size is large we used z test.

Z critical value at 10% level of significance for upper tail test is:

. By using z table.

Since test statistic exceeds> critical value, we reject the null hypothesis.

Therefore we have enough evidence to support the claim that average apartment rent in Atlanta is over $1200.