Roy ‘s Texaco wants to keep the price of its unleaded gasoline competitive with that of other stations in the area. Roy’s is currently charging $1.29 per gallon. To check that the average price for this gasoline for all stations within a 15 mile radius is higher than his price, Roy randomly samples the price of unleaded gasoline at ten stations located in this area. He obtains the following data for the price per gallon (in dollars): 1.7, 1.5, 2.6, 2.2, 2.4, 2.3, 2.6, 3.0, 1.4, 2.3 Set up the appropriate hypotheses and test them using a significance level of α= .05
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
Roy ‘s Texaco wants to keep the price of its unleaded gasoline competitive with that of other stations in the area. Roy’s is currently charging $1.29 per gallon. To check that the average price for this gasoline for all stations within a 15 mile radius is higher than his price, Roy randomly samples the price of unleaded gasoline at ten stations located in this area. He obtains the following data for the price per gallon (in dollars):
1.7, 1.5, 2.6, 2.2, 2.4, 2.3, 2.6, 3.0, 1.4, 2.3
Set up the appropriate hypotheses and test them using a significance level of α= .05
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