Question

A market analyst wants to compare the grocery bill between two states, Georgia and Alabama. She asked her staff to visit 35 random supermarket locations in Georgia and 32 random supermarket locations in Alabama. The results are given below. Using the 10% significance level, test the claim that the average grocery bill is higher in Georgia than in Alabama (claim: μG > μA) by choosing the correct answer choice below.

Sample Size

Average Grocery Bill

Population Standard Deviation

Georgia (G)

35

$

130.75

$

3.56

Alabama (A)

32

$

128.15

$

3.12

Which one?

	Test statistic: 3.19, Critical values: 1.282, Conclusion: We support the claim that the average grocery bill in Georgia is higher than in Alabama.
	Test statistic: 2.72, Critical values: 1.96, Conclusion: We reject the claim that the average grocery bill in Georgia is higher than in Alabama.
	Test statistic: 3.19, Critical values: 1.645, Conclusion: We support the claim that the average grocery bill in Georgia is higher than in Alabama.
	Test statistic: 5.83, Critical values: 1.282, Conclusion: We support the claim that the average grocery bill in Georgia is higher than in Alabama.
	Test statistic: 5.83, Critical values: 1.645, Conclusion: We support the claim that the average grocery bill in Georgia is higher than in Alabama.

Answer 1

Here we have to test whether the average bill in Georgia is higher than in Alabama. So we use the t test for the difference of means.

Test statistic

The calculation will be

Since we have right tailed test (μG > μA), the critical value for 10% level of significance will be 1.282

Therefore, the 1st option is the answer. i.e.

Test statistic: 3.19, Critical values: 1.282,

Conclusion: We support the claim that the average grocery bill in Georgia is higher than in Alabama.

I request you to provide a feedback regarding the answer.