MCQs: Hypothesis Testing

1. If the alternative hypothesis states that mu > 6700 the rejection region for the hypothesis is:
a) Both tails
b) Lower tail
c) Upper tail
d) Center
e) None of the above

2. For a one tailed hypothesis test, the critical value of the test statistic is -2.33. Which of the following is true about the hypothesis test?
a) Significance level = 0.05 for a lower tailed test
b) Significance level = 0.01 for a lower tailed test
c) Significance level = 0.05 for an upper tailed test
d) Significance level = 0.01 for an upper tailed test
e) None of the above

3. The t distribution is more spread out and flatter at the center than is the standard normal distribution. However, as the sample size increases, the curve representing the t distribution approaches the standard normal distribution. (True or False)

4. The student t distribution has a greater spread than does the z distribution. As a result, the critical values of t for a given level of significance are larger in magnitude than the corresponding z critical values. (True or False)

5. The records of the owner of a fleet of trucks revealed that the average life of a set of spark plugs is 22100 miles. The distribution of the life of the plugs is near normally distributed. A spark plug manufacturer claimed that its plugs had an average life in excess of 22100 miles. The fleet owner purchased 18 sets. A sample of the life of 18 sets revealed that the sample average life was 23400 miles, the sample standard deviation was 1500 miles and the computed t is 3677. Based on these findings, there is enough evidence to accept the manufacturer's claim at the 0.05 level. (True or False)

6. Suppose a one tailed t test is being applied to find out if the population mean is less than $120. The level of significance selected is 0.01 and 26 bank accounts were sampled. The critical value is:
a) -2.580
b) -2.485
c) -1.960
d) -2.479
e) None of the above