The housing market has recovered slowly from the economic cr

The housing market has recovered slowly from the economic crisis of 2008. Recently, in one large community, realtors randomly sampled 44 bids from potential buyers to estimate the average loss in home value. The sample showed the average loss was $9196 with a standard deviation of $ 1297. In 2011, the average home in this region of the country lost $8616 in value. Was the community studied by the realtors unusual? Use a t-test to decide if the average loss observed was significantly different from the regional average. State the hypotheses. (The mean home value lost in the community is denoted by mu.) Calculate the test statistic. Calculate the P-value. State the conclusion.

Solution

1. B H0 = 8616 & HA != 8616

2. test static = - 2.96

3. p value = 0.0015

4.c