There are two Chevrolet dealers in Jamestown New York The me

There are two Chevrolet dealers in Jamestown, New York. The mean monthly sales at Sharkey Chevy and Dave White Chevrolet are about the same. However, Tom Sharkey, the owner of Sharkey Chevy, believes his sales are more consistent. Below are the numbers of new cars sold at Sharkey in the last 7 months and for the last 8 months at Dave White. Do you agree with Mr. Sharkey? Use the 0.01 significance level.

101

State the decision rule for 0.01 significance level

What is the value of F?

There is more variation of the monthly sales True/False

Solution

State the decision rule for 0.01 significance level

It is a one-tailed test.

The degree of freedom df1=n1-1=7-1=6

The degree of freedom df2=n2-1=8-1=7

Given a=0.01, the critical value is F(0.99, df1=6, df2=7) =7.19 (from F table)

The rejection region is if F>7.19, we reject the null hypothesis.

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What is the value of F?

F= s1^2/s2^2

=14.79^2/22.95^2

=0.42

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There is more variation of the monthly sales True/False

Since F=0.42 is less than 7.19, we do not reject the null hypothesis.

So answer is False