demographic markets – the Urban and Rural markets. As such, in each market, you run a short survey that gauges customers demand for your product and assigns them to one of three categories – (i) High (ii) Medium or (iii) Low.
You survey 120 people in the “Urban” market and find that their demand falls into the following “buckets”
High 42
Medium 36
Low 42
You survey 80 people in the “Rural” market time. Their demand for the product its reflected below.
High 38
Medium 24
Low 18
The Null hypothesis that you are asked to test is that "the demand for the product is INDEPENDENT of the whether the market is Urban or Rural".
(A) Under this null hypothesis, what is the EXPECTED NUMBER OF PEOPLE THAT WILL ANSWER "HIGH" in the URBAN Market?
(B) Under this null hypothesis, what is the EXPECTED NUMBER OF PEOPLE THAT WILL ANSWER "LOW" in the RURAL Market?
(C) CALCULATE THE TEST STATISTIC FOR THE NULL HYPOTHESIS ABOVE. Enter that answer below as a number with two significant decimal places (such as 8.94 or 2.34 or 213.45)
(D) Using the critical values for the 5% and 1% levels of the ChiSquare Distribution from your text, which of the following statements is true?
We can reject the null hypothesis at the 1% level. 

We can reject the null hypothesis at the 5% level. 

We cannot reject the null hypothesis at the 5% or 1% level 

We can reject the null hypothesis at both the 5% and the 1% levels. 
Column and Row Totals  
Urban  Rural  Row Totals  
High  42  38  80 
Medium  36  24  60 
Low  42  18  60 
Column Totals  120  80  200 (Grand Total) 
Results  
Urban  Rural  Row Totals  
High  42 (48.00) [0.75]  38 (32.00) [1.12]  80 
Medium  36 (36.00) [0.00]  24 (24.00) [0.00]  60 
Low  42 (36.00) [1.00]  18 (24.00) [1.50]  60 
Column Totals  120  80  200 (Grand Total) 
Numbers inside the bracket are expected values.  
The chisquare statistic is 4.375. The pvalue is .112197. The result is not significant at p < .05 
The chisquare statistic is 4.375. The pvalue is .112197. The result is not significant at p < .01.
We cannot reject the null hypothesis at 5% and 1% Level of significance.
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