1) According to Consumer Expenditures, the average consumer spent $1729 on apparel and services in 2016. In 2017, a random sample of 36 consumers had a mean of $1667.11 and a standard deviation of $351.69. Can it be said that at the 5% level of significance that the mean level of consumption differed in 2017 with respect to 2016?

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**Hypothesis Testing Practice Problems**

1) According to **Consumer Expenditures**, the average consumer spent $1729 on apparel and services in 2016. In 2017, a random sample of 36 consumers had a mean of $1667.11 and a standard deviation of $351.69. Can it be said that at the 5% level of significance that the mean level of consumption differed in 2017 with respect to 2016?

2) Having a baby in a US Hospital costs $2528 on average. Active Management of Labor, (AML) is a group of interventions designed to help reduce the length of labor and of Caesarian Sections. With AML assistance, a random sample of 200 baby deliveries had a mean cost of $2480 with a standard deviation of $766. At the 5% level of significance, do the data provide sufficient evidence to conclude that AML reduces the cost of having a baby in a US Hospital?

3) In a study published by the **American Journal of Psychiatry** (May 2014) researchers wanted to measure the effect of alcohol on the hippocampal region of the brain in adolescents. 12 adolescents who use alcohol were randomly chosen. Hippocampal volumes were examined. The mean hippocampal volume for the whole population is 9.03 cubic centimeters. An analysis revealed that the mean hippocampal in the 12 chosen subjects was 8.1 cubic centimeters with a standard deviation of 0.7 cubic centimeters. At the 1% level of significance, can it be concluded that the adolescents have a lower hippocampal volume?

4) In 2015, the mean household expenditure for energy was $1493 according to data published by the **US Energy Information Association**. Pratap is an economist and he thinks that this has changed significantly in 2017. In a random sample of 35 households he found that the mean expenditure for energy was $1618 with a standard deviation of $321. At the 5% level of significance can we agree with Pratap?
Transcribed Image Text:**Hypothesis Testing Practice Problems** 1) According to **Consumer Expenditures**, the average consumer spent $1729 on apparel and services in 2016. In 2017, a random sample of 36 consumers had a mean of $1667.11 and a standard deviation of $351.69. Can it be said that at the 5% level of significance that the mean level of consumption differed in 2017 with respect to 2016? 2) Having a baby in a US Hospital costs $2528 on average. Active Management of Labor, (AML) is a group of interventions designed to help reduce the length of labor and of Caesarian Sections. With AML assistance, a random sample of 200 baby deliveries had a mean cost of $2480 with a standard deviation of $766. At the 5% level of significance, do the data provide sufficient evidence to conclude that AML reduces the cost of having a baby in a US Hospital? 3) In a study published by the **American Journal of Psychiatry** (May 2014) researchers wanted to measure the effect of alcohol on the hippocampal region of the brain in adolescents. 12 adolescents who use alcohol were randomly chosen. Hippocampal volumes were examined. The mean hippocampal volume for the whole population is 9.03 cubic centimeters. An analysis revealed that the mean hippocampal in the 12 chosen subjects was 8.1 cubic centimeters with a standard deviation of 0.7 cubic centimeters. At the 1% level of significance, can it be concluded that the adolescents have a lower hippocampal volume? 4) In 2015, the mean household expenditure for energy was $1493 according to data published by the **US Energy Information Association**. Pratap is an economist and he thinks that this has changed significantly in 2017. In a random sample of 35 households he found that the mean expenditure for energy was $1618 with a standard deviation of $321. At the 5% level of significance can we agree with Pratap?
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