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Hypothesis testing

Problem #6 Investor's Business Daily
The mean length of a work week for the population of workers was reported to be 39.2 hours (Investor's Business Daily, September 11, 2000). Suppose that we would like to take a current sample of workers to see whether the mean length of a work week has changed from the previously reported 39.2 hours.
a. State the hypotheses that will help determine whether a change occurred in the mean length of a work week.
b. Suppose a current sample of 112 workers provided a sample mean of 38.5 hours. Use a population standard deviation of σ = 4.8 hours. Determine the p-value.
c. At α = 0.05, determine if the null hypothesis can be rejected. Explain your conclusion.
d. Repeat the preceding hypothesis test using the critical value approach.

Problem #7 Raftelis Financial Consulting
Raftelis Financial Consulting reported that the mean quarterly water bill in the United States is $47.50 (U.S. News & World Report, August 12, 2002). Some water systems are operated by public utilities, whereas other water systems are operated by private companies. An economist pointed out that privatization does not equal competition and that monopoly powers provided to public utilities are now being transferred to private companies. The concern is that consumers end up paying higher-than-average rates for water provided by private companies. The water system for Atlanta, Georgia, is provided by a private company. A sample of 64 Atlanta consumers showed a mean quarterly water bill of $51 with a sample standard deviation of $12. At α = 0.05, does the Atlanta sample support the conclusion that above-average rates exist for this private water system? Explain your conclusion.

Solution Summary

Step by step method for testing the hypothesis under 5 step approach is discussed here. Both traditional and P value method is adopted here.

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