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    One-Sample T-Test Command

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    The national average for the price of a gallon of unleaded regular gas is $1.16. I believe the price is higher in my area of the country. I want to test my claim by randomly selecting gas prices for 25 stations in my area. The following prices are:

    $1.27 $1.29 $1.16 $1.20 $1.37
    1.20 1.23 1.19 1.20 1.24
    1.16 1.07 1.27 1.09 1.35
    1.15 1.23 1.14 1.05 1.35
    1.21 1.14 1.14 1.07 1.10

    The prices listed above are normally distributed. Using a one-sample t-test command and a level of significance of .05, state the five steps of the hypothesis testing procedure using:
    a) non-directional hypothesis
    b) directional hypothesis

    *What should my recommendations be based on the hypothesis and the results?

    *Are the decisions different in part a (non-directional) than in part b (directional)?
    Explain why they would differ even if they don't?

    * What are the tradeoffs of the two types of hypothesis?

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    Solution Summary

    This solution conducts an one-tailed and two-tailed small-sample test of hypothesis about a population mean. The null and alternative hypothesis is provided and the test statistic is calculated to determine if the null hypothesis is accepted or rejected.