1. A random sample of 49 business establishments shows that the average monthly water consumption is 35 cubic meters with a standard deviation of 5 cubic meter. Test the hypothesis that the average monthly water consumption is 34 cubic meters at 1% level of significance.

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1. A random sample of 49 business establishments shows that the average
monthly water consumption is 35 cubic meters with a standard
deviation of 5 cubic meter. Test the hypothesis that the average
monthly water consumption is 34 cubic meters at 1% level of
significance.
Transcribed Image Text:1. A random sample of 49 business establishments shows that the average monthly water consumption is 35 cubic meters with a standard deviation of 5 cubic meter. Test the hypothesis that the average monthly water consumption is 34 cubic meters at 1% level of significance.
Solution:
It is a one-tailed test since the alternative hypothesis uses the symbol
for greater than (>). And since o is known and n 2 30, we will use z-test. The
level of significance is 0.05.
From Table 1, the z-critical value is 1.645.
Thus, we have:
71.5 – 70
1.5
z =
8
0.8
V100
z = 1.875
1.645
z-critical value
The computed z-value is 1.875 which is greater than the critical
value of 1.645. Therefore, we reject the null hypothesis and support and
accept the alternative hypothesis that the population mean is greater
than 70.
Example 2:
Consider the following given information. Use a = 0.01. Interpret the result.
Null Hypothesis
Alternative Hypothesis
I = 124.5
Ho: µ = 127
Ha: μ < 127
µ = 127
n = 12
s = 5
Transcribed Image Text:Solution: It is a one-tailed test since the alternative hypothesis uses the symbol for greater than (>). And since o is known and n 2 30, we will use z-test. The level of significance is 0.05. From Table 1, the z-critical value is 1.645. Thus, we have: 71.5 – 70 1.5 z = 8 0.8 V100 z = 1.875 1.645 z-critical value The computed z-value is 1.875 which is greater than the critical value of 1.645. Therefore, we reject the null hypothesis and support and accept the alternative hypothesis that the population mean is greater than 70. Example 2: Consider the following given information. Use a = 0.01. Interpret the result. Null Hypothesis Alternative Hypothesis I = 124.5 Ho: µ = 127 Ha: μ < 127 µ = 127 n = 12 s = 5
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