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Unformatted text preview: ly distributed
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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.
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By the prev. slide, we know that that IF indeed all UT students have µ and σ
then x has a Normal Distribution:
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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
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¯ In fact, if x is NOT close enough to µ; i.e., if we observe such value of x at
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most...
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This document was uploaded on 02/19/2014 for the course STA 309 at University of Texas at Austin.
 Fall '07
 Gemberling
 Statistics

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