Question

Fairfield Homes is developing two parcels near Pigeon Fork, Tennessee. In order to test different advertising approaches, it uses different media to reach potential buyers. The mean annual family income for 17 people making inquiries at the first development is $160,000, with a standard deviation of $39,000. A corresponding sample of 29 people at the second development had a mean of $174,000, with a standard deviation of $32,000. Assume the population standard deviations are the same. At the 0.10 significance level, can Fairfield conclude that the population means are different?

1. State the decision rule for 0.10 significance level: H₀: μ₁ = μ₂; H₁:μ₁ ≠ μ₂. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)

2. Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)

3. At the 0.10 significance level, can Fairfield conclude that the population means are different?

Answer 1

a)

Decision rule :                   reject Ho if absolute value of test statistic |t|>1.680

b)

test stat t =(x1-x2-Δo)/Se=

-1.320

c)

fail to reject Ho