Question

# Exercise 11-25 (LO11-2) A cell phone company offers two plans to its subscribers. At the time...

Exercise 11-25 (LO11-2)

A cell phone company offers two plans to its subscribers. At the time new subscribers sign up, they are asked to provide some demographic information. The mean yearly income for a sample of 40 subscribers to Plan A is \$45,000 with a standard deviation of \$9,200. For a sample of 25 subscribers to Plan B, the mean income is \$64,300 with a standard deviation of \$7,100.

At the 0.025 significance level, is it reasonable to conclude the mean income of those selecting Plan B is larger? Assume unequal population standard deviations. Hint: For the calculations, assume the Plan A as the first sample.

1. What is the decision rule? (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)

1. Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)

1. What is your decision regarding H0 ?

• Reject H0

• Fail to reject H0

1. Compute the p-value.

• Less than 0.01

• Between 0.01 and 0.025

• Between 0.025 and 0.05

• Between 0.05 and 0.10

• Greater than 0.10

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