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The average price of homes sold in the U.S. in the past year was $220,000. A...

The average price of homes sold in the U.S. in the past year was $220,000. A random sample of 81 homes sold this year showed an average price of $210,000. It is known that the standard deviation of the population is $36,000. At level of significance (a) 0.05, conduct the hypothesis test to determine if there has been a significant decrease in the average price homes. With Ha: µ < 220,000 and test statistic Z = -2.50, what is the p-value?

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Answer #1

NOTE: There is no need of alpha in calculating p-value. However if p-value is less than alpha, we reject the null hypothesis.

Here p-value is 0.0062 and alpha is 0.05, i.e, p-value < alpha, so we reject the null hypothesis at 0.05 level of significance and conclude that there has been a significant decrease in the average price homes in comparison to past year.

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