a. State the null and alternative hypotheses to be tested. List Type I and Type II error and what it means b. Compute the test statistic. c. Determine the critical value for this test. d. What do you conclude at α = .01? Discuss the overall comparisons of the two levels of significance and what they represent in terms of home prices.
The average price of homes sold in the U.S. in the past year was $220,000. A random sample of 81 homes sold this year showed an average price of $210,000. It is known that the standard deviation of the population is $36,000. At a 5% level of significance, test to determine if there has been a significant decrease in the average price of homes.
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a.
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State the null and alternative hypotheses to be tested. List Type I and Type II error and what it means |
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b. |
Compute the test statistic. |
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c. |
Determine the critical value for this test. |
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d. |
What do you conclude at α = .01? Discuss the overall comparisons of the two levels of significance and what they represent in terms of home prices. |
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