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Hypothesis testing

A study of 20 families in a certain large city showed that the average income was $33,210 in 2000 with a standard deviation of $1800. Test the hypothesis that the true average income in this city was actually $31,000 against the hypothesis that it was more. Use a level of significance of 5% (hint: This is a one-sided test).

Solution Summary

Step by step method for testing the hypothesis under 5 step approach is discussed here. Excel template for each problem is also included. This template can be used to obtain the answers of similar problems.