Question

A certain company will purchase the house of any employee who is transferred out of state and will handle all details of reselling the house. The purchase price is based on two assessments, one assessor being chosen by the employee and one by the company. Based on the sample of eight assessments shown, do the two assessors agree? Use the .01 level of significance.

Assessments of Eight Homes ($ thousands)
Assessed by	Home 1	Home 2	Home 3	Home 4	Home 5	Home 6	Home 7	Home 8
Company	330	345	452	270	298	286	537	744
Employee	317	350	473	280	307	283	523	769

(a) Choose the appropriate hypotheses. Assume d = company assessed value – employee assessed value.

a. H₀: μ_d = 0 versus H₁: μ_d ≠ 0.

b. H₀: μ_d ≠ 0 versus H₁: μ_d = 0.

(b) State the decision rule for .01 level of significance. (Round your answers to 2 decimal places. A negative value should be indicated by a minus sign.)

Reject the null hypothesis if t_calc < _________or t_calc > __________ .

(c-1) Find the test statistic t_calc. (Round your answer to 2 decimal places. A negative value should be indicated by a minus sign.)

(c-2) What is your conclusion?

we_______ the null hypothesis
a. reject  

b. fail to reject

Answer 1

a)

H₀: μ_d = 0 versus H₁: μ_d ≠ 0.

b)

Reject the null hypothesis if t_calc < -3.50 or tcalc >3.50

c)

test statistic t_calc = -0.98

c-2)

fail to reject