The sales price (in $1,000) of three-bedroom apartments in two cities—Houston, Texas, and Orlando, Florida—are given in the following table. Houston is known to have lower house prices than Orlando; however, it is not clear if it also has lesser variability in its prices.   Houston 189 145 220 205 225 275 248 310 150 318 Orlando 301 279 224 400 249 205 289 350 218 300   State the null and the alternative hypotheses to determine if the variance of house price in Houston is less than that in Orlando. What assumption regarding the population is necessary to implement this step?  Test the hypothesis at α = 0.05. What is your conclusion?

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The sales price (in $1,000) of three-bedroom apartments in two cities—Houston, Texas, and Orlando, Florida—are given in the following table. Houston is known to have lower house prices than Orlando; however, it is not clear if it also has lesser variability in its prices.

 

Houston

189

145

220

205

225

275

248

310

150

318

Orlando

301

279

224

400

249

205

289

350

218

300

 

  1. State the null and the alternative hypotheses to determine if the variance of house price in Houston is less than that in Orlando.
  2. What assumption regarding the population is necessary to implement this step? 
  3. Test the hypothesis at α = 0.05. What is your conclusion?
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