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Z Test Using Megastat

Question: Suppose the federal government proposes to give a substantial tax break to automakers producing midsize cars that get a mean mileage exceeding 31 mpg. A sample of 49 midsize cars showed a mean of 31.5 mpg, with a standard deviation 0.8. [Use Excel- Megastat, hypothesis tests, the mean v hypothesized value, a z-test or use Phstat, one-sample tests, z test for the mean, sigma known.]

A) Write Ho and H1 in mathematical format.

B) Is this a right-tail, left-tail or two-tail test?

C) What is the critical value at alpha = 0.05 level?

D) State the decision rule.

E) Compute the test statistic. In step 3, use the z-test formula.

F) What is your decision regarding Ho? Accept or Reject?

G) What is the p-value?

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Solution Summary

This solution provides a step by step method for the calculation of a test statistic using MegaStat. Formula for the calculations and interpretations of the results are also included. The Z-test computation can be viewed in the attached Excel file and the full solution has been provided in the attached Word document.