Question

US government says average cost per academic year is $8500

I think this estimate is low. I surevey 40 studetns, and find the average was $8800 with std deviation of $400.

Perform a hypothesis test with .05 signifcate level to test my guess.

Answer 1

Solution:

Given that,

$\mu$ = $8500

$\bar x$ = $8800

s = $400

n = 40

The test statisc t is,

= ($\bar x$ -  $\mu$) /  (s /$\sqrt$n)

=((8800- 8500) / (400 / $\sqrt$40)

= (300*  $\sqrt$40 ) / 400

= 4.74

Test staistic = 4.74

P value = 1

P value >  $\alpha$

1.000 > 0.05

Do not reject  the null hypothesis