Question

Ralph’s Bookstores have indicated that the annual gross revenue for their stores has a standard deviation of σ=$50,000.   You have sampled the annual gross revenue of 64 of Ralph’s Bookstores and found that the sample mean annual gross revenue is $270,000,   Conduct a hypothesis test to show that the population mean annual gross revenue is greater than $250,000. Test at a level of significance of 0.05.

Blank #1: Find the TS to two decimal places.

Blank #2: Find the p-value to 4 decimal places.

Question 5 options:

Blank # 1
Blank # 2

Answer 1

H0: 250000

Ha: > 250000

#1 )

Test statistics

z = ( - ) / ( / sqrt(n) )

= (270000 - 250000) / ( 50000 / sqrt(64) )

= 3.2

#2)

p-value = P(Z > z)

= P(Z > 3.2)

= 1 - P(Z < 3.2)

= 1 - 0.9993

= 0.0007

Since p-value < 0.05 , reject H0.