Question

Bank of America's Consumer Spending Survey collected data on annual credit card charges in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment (U.S. Airways Attache, December 2003). Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, the sample mean difference was    = $857, and the sample standard deviation was s_d = $1,130.

1. Formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out.
   H₀: _d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0
   H_a: _d Selectgreater than or equal to 0greater than 0less than or equal to 0less than 0equal to 0not equal to 0
   
2. Use a .05 level of significance. What is the p-value?
   The p-value is Selectless than .01between .01 and .02between .02 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40
   
   Can you conclude that the population means differ?
   SelectThere is a difference between the annual mean expendituresCannot conclude there is a difference between the annual mean expenditures
   
3. Which category, groceries or dining out, has a higher population mean annual credit card charge?
   SelectGroceriesDining out
   
   What is the point estimate of the difference between the population means?
   $
   
   What is the 95% confidence interval estimate of the difference between the population means (to the nearest whole number)?
   ( , )

Answer 1

Ans a ) the null and alternative hypothesis is given by

Ans b ) using minitab>stat>basic stat>paired t test

we have

Paired T-Test and CI

N Mean StDev SE Mean
Difference 42 857 1130 174

95% CI for mean difference: (505, 1209)
T-Test of mean difference = 0 (vs ≠ 0): T-Value = 4.92 P-Value = 0.000

p value is less than 0.01

conclusion: yes we can conclude that There is a difference between the annual mean expenditures .

Ans )  the point estimate of the difference between the population means is 857

the 95% confidence interval estimate of the difference between the population means is (505, 1209)