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Statistics - Hypothesis Testing

A) To test the following hypothesis, a statistics practitioner randomly sampled 100 observations and found xbar=106 and s= 35. Calculate the test statistic (and for excel users, the p-value) of a test to determine whether there is enough evidence at the 1% significance level to infer that the alternative hypothesis is true.

H0 : µ = 100

H1 : µ > 100

b) Repeat part a with s= 25.
c) Repeat part a with s= 15
d) Describe what happens to the t-statistic (and for excel users the p-value) when the standard deviation decreases.

Solution Preview

(a) SE = s/sqrt n = 35/sqrt 100 = 3.5

z = (x-bar - mu)/SE = (106 - 100)/3.5 = ...

Solution Summary

Neat and step-wise solution is provided.