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T-Test or Z-Test Decision

# T-Test or Z-Test Decision

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09/29/2010

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t-Test for Mean(sect 8.4)

When we have small sample size (n < 30), and population standard deviation (σ) is unknown to us. We will use:

Test Statistic formula:
t=¯
X µ
s/n
Assumptions for t-test to be valid:
1. random sample drawn from population
2. the population is (approximately) normaly
distributed.
1
H0: µ= number (null hypothesis)
H1: Three variations (alternative hypothesis)

1.µ > number (upper-tailed) 2.µ < number (lower-tailed) 3.µ= number (two-tailed)

Note:
1.t is the test statistic from the formula
2.tα andtα/2 are values from t-distribution
table with n-1 degrees of freedom
2
Ex: Eercise 8.4, 8

Urban Canadians spent on average of 62.1 min- utes commuting to and from work. A chamber of commerce executive claims that the average commute time in her city is less than the Cana- dian’s average. She randomly selects 25 com- muters and ﬁnds the average commute time is 53.9 minutes with a sample standard deviation of 12.9 minutes. Atα = 0.10, test the execu- tive’s claim.

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