Question

A recent publication states that the average closing cost for purchasing a new home is $8304. A real estate agent believes the average closing cost is more than $8304. She selects 10 new home purchases and finds that the average closing costs are $7150 with a standard deviation of $420. Help her decide if she is correct by testing her claim at αα=0.10.

The correct hypotheses would be:

• H0:μ≤$8304H0:μ≤$8304
  HA:μ>$8304HA:μ>$8304 (claim)
• H0:μ≥$8304H0:μ≥$8304
  HA:μ<$8304HA:μ<$8304 (claim)
• H0:μ=$8304H0:μ=$8304
  HA:μ≠$8304HA:μ≠$8304 (claim)

Since the level of significance is 0.10 the critical value is 1.383

The test statistic is: (round to 3 places)

The p-value is: (round to 3 places)

The decision can be made to:

• reject H0H0
• do not reject H0H0

The final conclusion is that:

• There is enough evidence to reject the claim that the average closing cost is more than $8304.
• There is not enough evidence to reject the claim that the average closing cost is more than $8304.
• There is enough evidence to support the claim that the average closing cost is more than $8304.
• There is not enough evidence to support the claim that the average closing cost is more than $8304.

Answer 1