Exercise 6- Statistical Inferences

Problem 1
Weather forecasters would like to report on temperatures in Washington, DC. In particular, they
would like to compare the temperatures in December to temperatures in January to help potential
tourists understand whether there is a difference. They believe it is colder in January but want to
conduct a test to support their assertion. The average December temperature in a random sample
of 16 days is 35 and the average January temperature in a random sample of 20 days is 33. The
standard deviations based on historic information are 4 for December and 5 for January.

a. Specify the competing hypotheses to determine if it is colder in January than in

December.
b. Find the critical value(s) of the appropriate test at the 5% significance level.
c. Calculate the value of the test statistic.
d. Make a conclusion at the 5% significance level.

Problem 2
A large city installed LED streetlights, in part, to help reduce crime in particular areas. The city
collected the number of property crimes along nine randomly selected streets in the month before
and after the LED light installation, and claims that crime has been reduced. The crime data is
shown in the table.
Before LED After LED
17 14
25 20
10 14
14 12
16 8
34 35
32 27
21 18
14 12

a. Specify the competing hypotheses to test the city's claim.

b. Calculate the value of the relevant test statistic and find the critical value at the 5%
significance level.
c. Does the evidence support the city's claim at the 5% significance level?

Problem 3
The supervisor of an automobile sales and service industry would like the variance of the number
of automobiles serviced not to exceed five units-squared. He would recruit one more service
executive if the variance exceeds this threshold. In a recent random sample of 14 services, he
computed the sample standard deviation as 3.3. He believes that the automobile services are
normally distributed.
a. State the null and the alternative hypotheses to test if the threshold has been crossed. 
b. Use the critical value approach to conduct the test at α = 0.01. 
c. What should the supervisor do?

Problem 4
The sales price (in $1,000) of three-bedroom apartments in two cities—Houston, Texas, and
Orlando, Florida—are given in the following table. Houston is known to have lower house prices
than Orlando; however, it is not clear if it also has lesser variability in its prices.

Houston 189 145 220 205 225 275 248 310 150 318
Orlando 301 279 224 400 249 205 289 350 218 300

a. State the null and the alternative hypotheses to determine if the variance of house price in
Houston is less than that in Orlando.
b. What assumption regarding the population is necessary to implement this step? 
c. Test the hypothesis at α = 0.05. What is your conclusion?