The Blue Book value of a used 3year old car 56130 Someone tr

The Blue Book value of a used 3-year old car $56,130. Someone trying to buy this particular car wishes to know if the mean price of the same car is higher in the Chicago area What are the null and alternative hypotheses of this test? Is the test two tailed, left tailed, or right tailed? If a p value of 0 12 was found, what does that mean in this context?

Solution

10.

a)

As \"higher in the Chicago area\" was said, we use > for the Ha,

Ho: u <= 56130
Ha: u > 56130 [ANSWER]

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b)

This is right tailed, as our Ha has a > sign. [ANSWER, RIGHT TAILED]

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c)

If the null hypothesis is true, then the probability of of obtaining a sample mean at least this far more than $56130 is 0.12.

[Hence, we do not reject the null hypothesis if the significance level is at most 0.12.]