2.1 Perform the appropriate test of hypothesis for the potential resident using ? = 0.01. Clearly show the seven (7) steps of hypothesis testing, and draw a picture of the rejection region. 2.2 Find the p-value for this test. 2.3 What effect, if any, would there be on the conclusion of the test of hypothesis if you changed ? to 0.05?
The social worker for a particular town claims the average monthly cost for childcare outside the
home for a single child is R700. A potential resident is interested in whether the claim is correct.
She obtains a random sample of 24 records and computes the average monthly cost of this type
of childcare to be R689 with a standard deviation of R40.
2.1 Perform the appropriate test of hypothesis for the potential resident using ? = 0.01. Clearly
show the seven (7) steps of hypothesis testing, and draw a picture of the rejection region.
2.2 Find the p-value for this test.
2.3 What effect, if any, would there be on the conclusion of the test of hypothesis if you
changed ? to 0.05?
2.4 Based on your results above, to which type of error are you subject to, Type I or Type II?
Motivate your answer.
2.5 Mention any assumptions made using the test in 2.1.
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