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For the United States, the mean monthly Internet bill is \(\$ 32.79\) per household (CNBC, January 18,2006 . A sample of 50 households in a southern state showed a sample mean of \(\$ 30.63 .\) Use a population standard deviation of \(\sigma=\$ 5.60\) a. Formulate hypotheses for a test to determine whether the sample data support the conclusion that the mean monthly Internet bill in the southem state is less than the national mean of \(\$ 32.79\) b. What is the value of the test statistic? c. What is the \(p\) -value? d. \(A t a=.01,\) what is your conclusion?

Short Answer

Expert verified
The mean monthly Internet bill in the southern state is significantly less than the national mean.

Step by step solution

01

Formulate Hypotheses

The null hypothesis (H_0) is that the mean monthly Internet bill in the southern state is equal to the national mean: \( H_0: \mu = 32.79 \). The alternative hypothesis (H_a) is that the mean monthly Internet bill in the southern state is less than the national mean: \( H_a: \mu < 32.79 \). This is a one-tailed test.
02

Calculate the Test Statistic

The test statistic for a Z-test is calculated using the formula: \[ Z = \frac{\bar{x} - \mu}{\sigma/\sqrt{n}} \]where \( \bar{x} = 30.63 \) is the sample mean, \( \mu = 32.79 \) is the population mean, \( \sigma = 5.60 \) is the population standard deviation, and \( n = 50 \) is the sample size.Calculate: \[ Z = \frac{30.63 - 32.79}{5.60 / \sqrt{50}} = \frac{-2.16}{0.791} \approx -2.73 \]
03

Find the P-value

The P-value is the probability that the test statistic would take on a value as extreme as, or more extreme than, the observed value, assuming that the null hypothesis is true. Since this is a left-tailed test, we look up the value on the standard normal distribution table.For \( Z = -2.73 \), the P-value corresponds to approximately 0.0032.
04

Make a Conclusion at \( \alpha = 0.01 \)

Compare the P-value to the significance level \( \alpha = 0.01 \). Since the P-value (0.0032) is less than \( \alpha \) (0.01), we reject the null hypothesis. There is enough evidence to support the conclusion that the mean monthly Internet bill in the southern state is less than the national mean.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Understanding the Z-Test
A Z-test is a statistical method used to determine if there is a significant difference between sample and population means. It is especially useful when comparing a sample to a known population mean with a known standard deviation.
The Z-test formula is:
  • \( Z = \frac{\bar{x} - \mu}{\sigma/\sqrt{n}} \)
Where:
  • \(\bar{x}\) = sample mean
  • \(\mu\) = population mean
  • \(\sigma\) = population standard deviation
  • \(n\) = sample size
Using this formula, the test statistic value helps us understand how far our sample mean is from the population mean in terms of standard deviations. A larger absolute Z-value indicates that a test statistic is farther from the null hypothesis, suggesting the sample may not be part of the population at a certain level of confidence.
Decoding the P-Value
The P-value is a crucial output of statistical tests. It indicates the probability of observing test results at least as extreme as those observed if the null hypothesis is true. In simpler terms, it helps us gauge the strength of the evidence against the null hypothesis.
  • A small P-value (typically ≤ 0.05) suggests strong evidence against the null hypothesis, leading to its rejection.
  • A large P-value (> 0.05) suggests weak evidence against the null hypothesis, leading to its retention.
For example, in a one-tail Z-test, such as our exercise, finding a P-value of 0.0032 means there's only a 0.32% chance of observing a test statistic as extreme as the sample's, assuming the null hypothesis is true. This low P-value is compelling evidence to reject the null hypothesis, suggesting that the sample mean is indeed different from the population mean.
Exploring Statistical Significance
Statistical significance is a concept that tells us whether the result of a study or test is likely to have occurred under random chance or not. It is determined by comparing the P-value against a preset significance level, usually denoted as \(\alpha\).
  • Common significance levels are 0.05, 0.01, and 0.001.
  • If the P-value is less than or equal to \(\alpha\), the results are considered statistically significant.
  • If the P-value is greater than \(\alpha\), the results are not statistically significant.
In the context of our exercise, with an \(\alpha\) of 0.01 and a P-value of 0.0032, the results are statistically significant. This means there is enough statistical evidence to conclude that the mean monthly Internet bill for households in the southern state is less than the national mean, beyond a reasonable doubt of random chance.

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Most popular questions from this chapter

AOL Time Warner Inc.'s CNN has been the longtime ratings leader of cable television news. Nielsen Media Research indicated that the mean CNN viewing audience was 600,000 viewers per day during 2002 (The Wall Street Journal, March 10,2003 ). Assume that for a sample of 40 days during the first half of \(2003,\) the daily audience was 612,000 viewers with a sample standard deviation of 65,000 viewers. a. What are the hypotheses if CNN management would like information on any change in the CNN viewing audience? b. What is the \(p\) -value? c. Select your own level of significance. What is your conclusion? d. What recommendation would you make to CNN management in this application?

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Consider the following hypothesis test: \\[ \begin{array}{l} H_{0}: \mu=22 \\ H_{\mathrm{a}}: \mu \neq 22 \end{array} \\] A sample of 75 is used and the population standard deviation is \(10 .\) Compute the \(p\) -value and state your conclusion for each of the following sample results. Use \(\alpha=.01\) a. \(\bar{x}=23\) b. \(\bar{x}=25.1\) c. \(\quad \bar{x}=20\)

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