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Solving Hypothesis-Testing Problems (Traditional Method)
Step 1: State the hypotheses and identify the claim.
Step 2: Find the critical value(s).
⟹Rejection Region: R (reject H_0)
Step 3: Compute the test value.
Step 4: Make the decision to reject or not reject the null hypothesis.
Step 5: Summarize the results.
Example: Days on Dealers' Lots
A researcher wishes to see if the mean number of days that a basic, low-price, small automobile sits on a dealer's lot is 29. A sample of 30 automobile dealers has a mean of 30.1 days for basic, low-price, small automobiles. At α=0.05, test the claim that the mean time is greater than 29 days. The standard deviation of the population is 3.8 days.
Solution:
Step 1: State the hypotheses and identify the claim.
H_0: μ=29 and H_1: μ>29(claim)
Step 2: Find the critical values. Since α=0.05 and the test is right-tailed test, the critical value is 1.96.
(Rejection Region: R=(1.96,+∞))
Step 3: Compute the test value.
z=(X ̅-μ)/(σ/√n)=1.59 ∉ R
Step 4: Make the decision. Do not reject the null hypothesis, since the test value falls in the noncritical region.
Step 5: Summarize the results. Claim is false.
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