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Federal funds are to be allocated for financial aid to
students for the cost of books. It is believe the mean
cost of books to a college student is $300. We are
concerned that it is really higher. So what do we do?
We perform
Testing Hypotheses
Hypothesis about a mean
Example
A drug company develops a new cholesterol lowering drug
that they think is more effective than Loopitor. Suppose it is
known that a 10 mg dose of Loopitor lowers cholesterol
levels by an average of 43 ppm
Hypothesis Testing
Goal: Make statement(s) regarding unknown population
parameter values based on sample data
Elements of a hypothesis test:
Null hypothesis - Statement regarding the value(s) of unknown
parameter(s). Typically will imply no association