Name: o-bedroom apartments was selected from a recent edition of the Gainesville

Question

Name: o-bedroom apartments was selected from a recent edition of the Gainesville Sun. Assume that the rents are normally distributed. The mean of this sample is $676 with a standard deviation of $121. A group of students believes the rent is more than $650. Test their claim at 5% significance level. Prob1em 1 (25 points)i A random sample of 55 monthly rents for a) What are the null and alternate hypotheses? b) What is the Decision Rule? c) What is the test statistic? d) What is the decision? e) What does the decision infer? f) What is the estimated P-Value?

Explanation / Answer

1)

a) H0: µ = $650

H1: µ > $650

b) Decision rule : If T test statistic > T critical = 1.673 on 54 degrees of freedom at 5% level, then Reject H0

c) T test statistic = xbar - µ / [ s/?n]

= 676 - 650 / [ 121/?55]

= 1.59

d) Here T statistic < 1.673

Then Do not Reject H0

e) It infer that there is no significant evidence of the mean of rent is more than $650.

f) p value = p(T > 1.59) on 54 degrees of freedom = 0.0588 > 0.05

So do not reject H0(same dicision above)

We conclude

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