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Unformatted text preview: α = 0.05. Because this is a twotailed test, need the area of the upper tail of α /2; α /2 = 0.025. Find t for upper tail area = 0.025 and for 24 degrees of freedom. t 0.025, 24 = 2.064 from the t table Decision rule: Reject H if t < 2.064 or t > 2.064 Calculated for the sample of n = 25: xbar = $5835.00 with s = $520.11. Some Chap 9 problem solutions 1 © 2010 Harvey A. Singer The t test statistic: 259 . 2 = 25 11 . 520 5600 00 . 5835 = =n s x t μ 2.259 > 2.064 so reject H ___________________________ New questions: 1. What is the Type I error? In general, a Type I error is to reject a true null. Here, the Type I error is to reject the mean price of $5600 when in fact it is true. 2. What is the chance of making a Type I error? The chance of making the aforementioned Type I error is the given significance level of 5%. Some Chap 9 problem solutions 2 © 2010 Harvey A. Singer...
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This note was uploaded on 02/19/2011 for the course OM 210 taught by Professor Singer during the Spring '08 term at George Mason.
 Spring '08
 SINGER

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