Question

A leasing firm claims that the mean number of miles driven annually,

μ

, in its leased cars is less than

13160

miles. A random sample of

19

cars leased from this firm had a mean of

12833

annual miles driven. It is known that the population standard deviation of the number of miles driven in cars from this firm is

1980

miles. Assume that the population is normally distributed. Is there support for the firm's claim at the

0.1

level of significance?

Perform a one-tailed test. Then fill in the table below.

Carry your intermediate computations to at least three decimal places, and round your responses as specified in the table.

The null hypothesis:	H0:
The alternative hypothesis:	H1:
The type of test statistic:	(Choose one)ZtChi squareF
The value of the test statistic: (Round to at least three decimal places.)
The critical value at the 0.1 level of significance: (Round to at least three decimal places.)
Can we support the leasing firm's claim that the mean number of miles driven annually is less than 13160 miles?		Yes	No

Answer 1

Given:

= 13160, n = 19, = 12833, = 1980, = 0.1

Hypothesis:

Ho: = 13160

Ha: < 13160

The Type of test statistic: Z test

Test statistic:

Critical value:

Z =Z0.1 = -1.282              ..................Using standard Normal table

Conclusion:

Z > Z , i.e. -0.720 > -1.282, That is Fail to Reject Ho at 1% level of significance.

ANSWER: B

No