Using the Autoplex Data Set (See excel spreadsheet attached) determine the Null Hypothesis, Alternative Hypothesis and the Research Question.
1. Null Hypothesis: "There is no difference between the mean price of automobiles bought by younger and older consumers."
2. Alternative Hypothesis: "There is a difference between the mean price of automobiles bought by younger consumers and older consumers."
3. Research Question: "Is there a difference in the mean price of autos bought by younger consumers and older consumers?"
4. Resolve the 5 steps below
1. State the Null and Alternate hypothesis
2. Select the level of significance - the alpha value
3. Choose the test statistic to use
4. Determine the decision rule - the critical value of the test statistic
5. Use the sample data to compute the test statistic based on the sample, and Determine whether to reject the null or not
5. FYI: For the purposes of the question, 'younger' is consumers age 40 and younger, while 'older' is consumers older than 40. (the separation being 'middle age')
So there are basically 2 samples - Consumers who are 40 and younger, and consumers who are older than 40.
The solution provides step-by-step method of performing a two-tailed hypothesis z-test. All the steps of hypothesis testing (formulation of null and alternate hypotheses, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) have been explained in details.