In the past, the average gasoline price of one of the major oil companies has been $3.20 per gallon. Because of cost reduction measures, it is believed that there has been a significant reduction in the average price. In order to test this belief, we randomly selected a sample of 36 of the company's gas stations and determined that the average price for the stations in the sample was $3.14. Assume that the standard deviation of the population (σ) is $0.12. H0 =There is no reduction in the average price of gasoline. Ha =There is a significant reduction in the average price of gasoline. Null Hypothesis, H0: μ ≥ 3.20 Alternate Hypothesis, Ha: μ < 3.20 a. Compute the test statistic and critical value. b. What is the p-value associated with a 1% level of significance of the above sample results? c. Briefly discuss your conclusion?
In the past, the average gasoline price of one of the major oil companies has been $3.20 per
gallon. Because of cost reduction measures, it is believed that there has been a significant
reduction in the average price. In order to test this belief, we randomly selected a sample of 36 of
the company's gas stations and determined that the average price for the stations in the sample
was $3.14. Assume that the standard deviation of the population (σ) is $0.12.
H0 =There is no reduction in the average price of gasoline.
Ha =There is a significant reduction in the average price of gasoline.
Null Hypothesis, H0: μ ≥ 3.20
Alternate Hypothesis, Ha: μ < 3.20
a. Compute the test statistic and critical value.
b. What is the p-value associated with a 1% level of significance of the above sample results?
c. Briefly discuss your conclusion?
*note: I have the following info listed and I computed the z-test stastictic as -3. How do I calculate the critical value?
| Population |
2.20 |
| 36 | |
| Sample mean, x-bar = | $2.14 |
| Population standard deviation, σ = | $0.12 |
| Z Test Statistic | -3 |
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