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Pennsylvania Refining Company is studying the relationship between the pump price of gasoline and the number...

Pennsylvania Refining Company is studying the relationship between the pump price of gasoline and the number of gallons sold. For a sample of 20 stations last Tuesday, the correlation was 0.65.

  1. State the decision rule for 0.050 significance level. (Round your answer to 3 decimal places.)

  1. Compute the value of the test statistic. (Round your answer to 3 decimal places.)

  1. Can we conclude that the correlation in the population is greater than zero? Use the 0.050 significance level.

Math   Statistics-And-Probability   
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Homework Answers

Answer #1

1) we test Ho : = 0 Vs Ha : > 0

For a = 0.05 and d.f = n -2 = 18

t​​​​​​1-a , n-2 = t​​​​​​0.95,18 = 1.734

Decision rule : Reject Ho if t > 1.734 , otherwise we fail to Reject Ho

2) Test statistic

t = r*sqrt(n -2)/sqrt [1-r2]

t = 0.65* Sqrt (18)/Sqrt [1-0.652]

t = 3.629

3)

Here t = 1.734 > 3.629 , so we reject the null hypothesis Ho

Yes , we conclude that the correlation in the population is greater than zero

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