Question

The average gasoline price at Chevron was $3.12 per gallon last month. Due to the recent nation-wide gas price drop, the chief marketing officer of Chevron believes that there has been a significant reduction in the average gas price. In order to test his belief, he randomly selected a sample of 36 of Chevron gas stations and found the average gas price of these stations was $3.06. Assume that the population standard deviation of the population is $0.12, and the significance level (α) is 5%.

Step 1: Formulate the null and the alternative hypotheses:

Group of answer choices

Null: mu ≤ 3.12; Alternative: mu > 3.12

Null: mu ≥ 3.12; Alternative: mu < 3.12

Null: mu = 3.06; Alternative: mu ≠ 3.06

Null: mu = 3.12; Alternative: mu ≠ 3.12

Null: mu ≤ 3.06; Alternative: mu > 3.06

Null: mu ≥ 3.06; Alternative: mu < 3.06

Answer 1