Gasbuddy.com states that the mean gasoline price for the Houston area is $1.92.
ID: 3156522 • Letter: G
Question
Gasbuddy.com states that the mean gasoline price for the Houston area is $1.92. From the information gathered in September specialists say that the gasoline prices were higher than now. According to our data can we say that the prices were significantly different than they are now? We will use a hypothesis test to prove this.
a.) Give the null and alternative hypothesis.
b.) Describe the assumptions of this hypothesis test. Determine if the test statistic you are using is appropriate. Fully explain.
Explanation / Answer
a) H0: the mean gasoline price for the Houston area is $1.92. that is, mu = 1.92
H1: the mean gasoline price for the Houston area is not $1.92.
Assumptions for Student’s t-test: The following assumptions are made in the Student’s t-test:
i) The parent populations from which the sample is drawn is normal.
ii) The sample observations are independent, i.e., the sample is random.
iii) The population standard deviation is unknown
Let Sample Mean Xbar, sample SD = S, sample size = n. These are not given
Test Statitic t = (Xbar - mu) / (S/sqrt(n))
If t value < t critical value at alpha los and (n-1)df then we accept H0 other wise reject H0.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.