Wed 8 Aug, 2012 08:25 am
It is believed that average Statistics student spends $290 on textbooks per semester.
College bookstore though observes a decline in demand, and claims that the average amount spent on textbooks is lower than $290. Basing on our data, do you support this claim? Perform the hypothesis testing. Use the methods studied in class.
a) Use the significance level ￼=5%. This test must be done by hand: show all steps. State clearly the model (z or t?) the hypotheses, circle the claim, use either P-value or Critical Region method, make a sketch illustrating your critical region or your P-value, and finally write clearly your conclusions.
(BONUS +2 if both methods are present and illustrated by the shaded and labeled graph - see the examples in the notes)
b) Repeat for the significance level ￼=1%