HYPOTHESIS TESTING

HYPOTHESIS TESTING OF MEANS WHEN THE POPULATION STANDARD

DEVIATION IS KNOWN
Question 1

Ans. (Cal. Value 1.46)

Question 2

Ans. (Cal. Value 5.48)

Question 3

Ans. (Cal. Value 1.48)

Question 4

Ans. (Cal. Value 1.15)

 HYPOTHESIS TESTING
Question 5

Ans. (Cal. Value 9.30)

HYPOTHESIS TESTING OF MEANS WHEN THE POPULATION

STANDARD DEVIATION IS NOT KNOWN

Question 6

Ans. (Cal. Value 3.181)

Question 7
The data-processing department at a large life insurance company has installed new color video
display terminals to replace the monochrome units it previously used. The 95 operators trained to
use the new machines averaged 7.2 hours before achieving a satisfactory level of performance.
Their sample standard deviation was 16.2 squared hours. Long experience with operators on the
old monochrome terminals showed that they averaged 8.1 hours on the machines before their
performances were satisfactory. At the 0.01 significance level, should the supervisor of the
department conclude that the new terminals are easier to learn to operate?

Ans. (Cal. Value 2.179)

Question 8
As the bottom fell out of the oil market in early 1986, educators in Texas worried about how the resulting
loss of state revenues (estimated to be about $100 million for each $1 decrease in the price of a barrel of
oil) would affect their budgets. The state board of education felt the situation would not be critical as long
as they could be reasonably certain that the price would stay above $18 per barrel. They surveyed 13
randomly chosen oil economists and asked them to predict how low the price would go before it bottomed
out. The 13 predictions average $21.60, and the sample standard deviation was $4.65. At α 0.01, is the
average prediction significantly higher than $18.00? Should the board conclude that a budget crisis is
unlikely?
Ans. (Cal. Value 2.791)
 HYPOTHESIS TESTING
Question 9
Many cities have adopted High Occupancy Vehicle (HOV) lanes to speed commuter traffic to downtown
business districts. Planning for Metro Transportation District has depended on a well-established average
of 3.4 passengers per HOV. But a summer intern notes that because many firms are sponsoring van pools,
the average number of passengers per car is probably higher. The intern takes a sample of 23 vehicles going
through the HOV lane of a toil plaza and reports a sample mean of 4.3 passengers, and a standard deviation
of 1.5 passengers. At the 0.01 level of significance, does the sample suggest that the mean number of
passengers has increased?
Ans. (Cal. Value 2.877)
Question 10
Drive-a-Lemon rents cars that are mechanically sound, but older than those rented by the large national
rent-a-car chains. As a result, it advertises that its rates are considerably lower than rates of its larger
competitors. An industry survey has established that the average total charge per rental at one of the major
firms is $77.38. A random sample of 18 completed transactions at Drive-a-Lemon showed an average total
charge of $87.61 and a sample standard deviation of’ $19.48. Verify that at a = 0.025, Drive-a-Lemon’s
average total charge is significantly higher than that of the major firms.
Ans. (Cal. Value 2.28)