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Hypothesis Testing - Difference between Means

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2. We wish to compare the average sales in two shops, to see if the population mean of the first one is higher than the second one. One shop had 100 sales averaging $94, with a standard deviation of $40. The other had 64 sales averaging $86, with a standard deviation of $24. At an alpha level of 5%, can we conclude that the first store has higher sales?
a) what are the null and alternate hypothesis?
b) What kind of test should be used?
c) Is it a one tailed or two tailed test? Why?
d) What is the value of the statistic?
e) What can we conclude?

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Solution Summary

Neat and 5-Step testing of the hypothesis. The differences between mean average sales are determined.

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(a) H0: The first shop did not have higher sales than the second shop (1 - 2  0)
H.M.: The first shop had higher sales than the second shop (1 - ...

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