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# Hypothesis Testing & Confidence Interval

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11.28 When companies are designing a new product, one
of the steps typically taken is to see how potential buyers
react to a picture or prototype of the proposed product.
The product-development team for a notebook computer
company has shown picture A to a large sample of potential
buyers and picture B to another, asking each person
to indicate what they "would expect to pay" for such a
product. The data resulting from the two pictures are
provided in file XR11028. Using the 0.05 level of
significance, determine whether the prototypes might not
really differ in terms of the price that potential buyers
would expect to pay. Identify and interpret the p-value
for the test. Construct and interpret the 95% confidence
interval for the difference between the population means.
Is the hypothesized difference (0.00) within the interval?
Given the presence or absence of the 0.00 value within
the interval, is this consistent with the findings of the
hypothesis test?

t-Test: Two-Sample Assuming Unequal Variances

ComputerA ComputerB
Mean 3049.044444 3122.55
Variance 51921.72525 22129.07
Observations 45 40
Hypothesized Mean Difference 0
df 76
t Stat -1.779090075
P(T<=t) one-tail 0.0396117
t Critical one-tail 1.665151353
P(T<=t) two-tail 0.0792234
t Critical two-tail 1.99167261

#### Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.

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