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Critical Value, Sample Statistic & Probability Value

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Please provide computation where necessary.

1. Suppose that the shoe company Alta Claims that their mean weekly sales are $17,350. A random sample of 35 weeks yields a sample mean of $10,450. With a sample standard deviation of s =$1500.
Given that the pair of hypothesis that correspond to the claim are
H0: µ = 17,350
H1: µ ≠ 17,350

Find the critical value for the hypothesis test. Assume that the significance level is α = 0.08.
Critical values = +/-
Round your final answer to two decimal places.

2. Suppose that an insurance agent for State Ranch claims that the average life insurance policy premium that he sells is $450 per year. A sample of 40 customers yields a mean of x =$475 and a standard deviation of s = $85. You decide to test his claim at the α = 0.05 significance level.
If the hypothesis are
H0: µ = 450
H1: µ ≠ 450

With critical values of ±1.96, compute the sample statistic, and choose the appropriate conclusion.
Z =
Round your answer o two decimal places.

3. Suppose that the company CEO for Quitters, Inc. claims that the average severance package for an employee at his company is $450,000. You decide to test his claim using a significance level of α = 0.04. A sample of 40 employees yields a mean of x = $414,845 with a sample standard deviation of s = $125,575. First, you set up your hypothesis as follows

H0: µ = $450,000 (claim)
H1: µ = $450,000

Then you compute your sample statistic, get the following

Z = 414.845 - 450,000
125,575
√40
= -1.77

Compute the probability of getting a sample statistic at least as extreme as z = -1.77, and interpret this probability value.

Probability =
Final answer to two decimal places.

4. Suppose a private university claims that more than 2/3 of their students graduate within for years. A random survey of 300 alumni finds that 190 of them graduated within 4 years.

Given that the pair of hypothesis that corresponds to the claim are
H0: p ≤ 0.67
H1: p > 0.67

Find the critical value for the hypothesis test. Assume the significance level is α = 0.01.

Remember that this is a right-tailed test, so your critical value will be positive. Remember also that in one-tailed test, you don't have to cut your α-value in half.
Critical value =
Round your final answer to two decimal places.

5. Suppose that an insurance agent for Almost Heaven insurance claims that less than 20% of his life insurance policies ever have to 'pay out'. You decide to test his claim at the α = 0.02 significance level. A sample of 75 policies from the last year finds that 30 of them had to pay out.
If the hypothesis are

H0: p ≥0.20
H1: p < 0.20

With a critical value of -2.05, compute the sample statistic, and choose the appropriate conclusion.

Z =
Round the sample statistic to two decimal places.

6. Suppose that the CEO of U-Store-it claims that more than 2/3 of his employees carry secondary health insurance. You decide to test his claim using a significance level of α = 0.05. A sample of 150 employees finds that 108 of them carry secondary health insurance.
First, you set up your hypothesis as follows:

H0: p ≤ 0.67
H1: p > 0.67(claim)

Then you compute your sample statistic, and get the following:

Z = 108 - 0.67
150________
√0.67 x 0.33
150
=1.30

Compute the probability of getting a sample statistic as least as extreme as z = 1.30, and interpret this probability value. Remember that in one -tailed test such as this, you do not need to multiply your p-value by two.

Probability =
Round your final answer to two decimal places.

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Solution Summary

This solution provides assistance determining the critical value, the sample statistic and the probability value.

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