Chapter 12.1, Problem 24E

To determine

To select the best option for the correct hypotheses to answer that is there significant evidence that the selling price increases as appraised value increases.

Answer to Problem 24E

The option (a) is the correct option.

Explanation of Solution

In the question, appraised market price and the actual market price are compared and the computer output of the data is given. Thus, the researchers have claimed that is there an increase or not or equivalently is the slope of the population regression line positive. Thus we know that the null hypothesis states that the population parameter is equal to the value mentioned in the claim. So, we have,

  $H_0:\beta =0$

And the alternative hypothesis states that the opposite of the null hypothesis according to the claim. So, we have,

  $H_a:\beta >0$

Thus, the option (a) is the correct option.