Question

An insurance agent says the standard deviation of the total hospital charges for patients involved in a crash in which the vehicle struck a construction barricade is less than $3100. A random sample of 22 total hospital charges for patients involved in this type of crash has a standard deviation of $3500. At a = 0.01 can you support the agent's claim? Use the P-value method to test the claim. Identify the null and alternative hypotheses. Let o be the population standard deviation. OB. Ho: 62 $3100 H: 0<$3100 O A. Ho: o> $3100 H: os $3100 0C. Hp: 0 < 53100 H: 02 53100 OD. Ho: os $3100 H: 6> $3100 Identify the test statistic. (Round to two decimal places as needed.) Identify the P-value (Round to three decimal places as needed.) Choose the correct conclusion below. O A. Fail to reject H. There is not enough evidence at the 1% level of significance to support the insurance agent's claim. OB. Fail to reject Ho. There is enough evidence at the 1% level of significance to support the insurance agent's claim. O C. Reject Ho. There is not enough evidence at the 1% level of significance to support the insurance agent's claim. OD. Reject Ho. There is enough evidence at the 1% level of significance to support insurance agent's claim.

Answer 1

The statistical software output for this problem is :

One sample variance summary hypothesis test: o2: Variance of population H:02 = 9610000 HA: < 9610000 Hypothesis test results: Variance Sample Var. DF Chi-square Stat P-value 02 12250000 21 26.768991 0.8214

Option B) is correct.

Test statistics = 26.77

P-value = 0.821

Option A) is correct .