Qualitative Analysis
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The average price of regular gasoline in the continental U.S. states and the District of Columbia was $3.74 on August 18, 2008. Alaska and Hawaii are not included as the gas prices there are much higher than the continental U.S. The price of gasoline in the eleven western states of the U.S. on the same day is given below. Test the hypothesis that the average price of gasoline in the western states is higher than the national average for Continental USA and the District of Columbia, i.e., higher than $3.74. Use level of significance ? = 0.05.
California
$4.04
Arizona
$3.72
Colorado
$3.83
Idaho
$4.01
Montana
$3.97
Nevada
$3.84
New Mexico
$3.77
Oregon
$3.92
Utah
$4.04
Washington
$3.99
Wyoming
$3.90
Reference: Daily Fuel Gauge Report. (n.d.). Retrieved August 18, 2008, from AAA: http://fuelgaugereport.opisnet.com/sbsavg.html.
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Solution Summary
The solution discusses a qualitative analysis including determine the average price of gasoline using the level of significance.
Solution Preview
First, according to the given data, we can find the sample mean xbar=3.912, sample standard deviation s=0.110. Note that the sample size n=11.
Null hypothesis H0: ...
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Recent Feedback
- "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
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- "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
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