Lecture_14 (short)

# Ut population null hypothesis however we suspect that

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Unformatted text preview: ly distributed ¯ √ with mean µ and Std. Dev σ / n Rafael Mendoza Elementary Business Statistics – Class 14 McCombs Hypothesis Tests Problem: It is well assumed that the average amount in cash a UT student has is \$50 (µ) and we assume that the Std. Dev. is known and is equal to \$10 (σ ). UT= Population. (Null Hypothesis) However, we suspect that this is incorrect. In fact, we think that the average amount a student carries is less than \$50. (Alt. Hypothesis) We cannot look at every UT student’s wallet to determine the average ⇒ we conduct an Hypothesis Test on a Sample to prove this. we take a SRS(n) of size n = 400 students and take the average amount of cash, x. ¯ By the prev. slide, we know that that IF indeed all UT students have µ and σ then x has a Normal Distribution: ¯ ￿ ￿ √ ￿ √￿ N µ, σ / n = N 50, 10/ 400 = N (50, 0.5) If x has this distrib. we expect that any SRS(n) has a mean x close to µ ¯ ¯ In fact, if x is NOT close enough to µ; i.e., if we observe such value of x at ¯ ¯ most...
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## This document was uploaded on 02/19/2014 for the course STA 309 at University of Texas at Austin.

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