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Unformatted text preview: Significance level is = 0.05. Because this is a twotailed test, need the area of the upper tail of / 2; / 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 Some Chap 9 problem solutions 1 2010 Harvey A. Singer 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. The t test statistic: 259 . 2 = 25 11 . 520 5600 00 . 5835 = =n s x t 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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 Spring '08
 SINGER

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