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Tutorial solutions week 9

# 784 reject reject 0025 0025 196 reject 0 196 z reject

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Unformatted text preview: e that the population mean is equal to 80. 3 0.025 79.216 0.025 80 X 80.784 reject reject 0.025 0.025 -1.96 reject 0 1.96 Z reject 4 2. A real estate expert claims the current mean value of houses in a particular area is more than \$250,000. A random sample of 150 recent sales prices in the area yields a sample mean of \$265,000. It is known that house values in the area are approximately normally distributed with a standard deviation of \$50,000. (a)Perform an upper tail test of the null hypothesis that the population mean house value in the area is \$250,000. Use a 5% level of significance and state the rejection (critical) region in terms of both ̅ and z. Let X value of a house in the area ̅ ̅ We wish to test Rejection region: ̅ ⁄√ or ̅ ̅ ( √ √ ) Since ⁄√ Hence we reject H 0 and conclude that the mean house value in the area is more than \$250,000 . (b) Why is an upper tail test most appropriate in this case? The nature of the research problem dictates an upper tail test. In this case we will not believe the expert’s claim unless there is ‘significant’ sample evidence to do so. This implies an upper tail test...
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