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Pat wants to compare the cost of one- and two-bedroom apartments in the area of her college campus. She collects data for a random sample of 10 advertisements of each type. The table below shows the rents (in dollars per month) for the selected apartments.

Pat wonders if two-bedroom apartments rent for significantly more, on average than one-bedroom apartments. She decides to perform a test of H0:μ1=μ2 versus Ha:μ1<μ2, where μ1 and μ2 are the true mean rents for all one-bedroom and two-bedroom aparaments, respectively, near the campus.

(a) Name the appropriate test and show that the conditions for carrying out this test are met.

(b) The appropriate test from part (a) yields a P-value of 0.058. Interpret this P-value in context.

(c) What conclusion should Pat draw at theα=0.05 significance level? Explain.

Short Answer

Expert verified

a)Two-sample t-test

b)P=5.8%

c)There is not sufficient evidence to support the claim that two-bedroom apartments rent for significantly more, on average than one-bedroom apartments.

Step by step solution

01

Part(a) Step 1: Given Information

In general:

One proportion: one-sample ztest/interval

Two proportions: two-sample ztest/interval

One means: one-sample ttest/interval

Two means: two-sample ttest/interval or paired ttest/interval

Use a test if you want to test for a difference, equality, increase or decrease. Use an interval if you want to estimate an interval in which the true value lies.

The two-sample t test for a population mean the difference

because we are interested in testing the means of two samples.

02

Part(a) Step 2: Explanation

There are three conditions for the test: Random, Normal, Independent

Random: Satisfied, because the samples are given to be random samples.

Normal: Satisfied, because the histograms of the samples do not show strong skewness or outliers.

Independent: Satisfied, because the sample size is less than 10%of the population size.

Thus we note that all three conditions have been satisfied.

03

Part(b) Step 1: Given Information

H0:μ1=μ2

Ha:μ1<μ2

P=0.058=5.8%

04

Part(b) Step 2: Explanation

The P-value is the probability of obtaining the value of the test statistic, or a value more extreme if the null hypothesis H0is true.

This then means that if the population means are equal, then the probability of obtaining two samples with a difference as in the given two samples (or a more extreme difference) is localid="1650520353140" 5.8%.

05

Part(c) Step 1: Given Information

H0:μ1=μ2

Ha:μ1<μ2

P=0.058=5.8%(Exercise13b)

06

Part(c) Step 2: Explanation

If the P-value is smaller than the significance level, reject the null hypothesis:

P=0.058>0.05⇒Fail to rejectH0

There is not sufficient evidence to support the claim that two-bedroom apartments rent for significantly more, on average than one-bedroom apartments.

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Most popular questions from this chapter

One major reason that the two-sample t procedures are widely used is that they are quite robust. This means that

(a) t procedures do not require that we know the standard deviations of the populations.

(b) t procedures work even when the Random, Normal, and Independent conditions are violated.

(c) t procedures compare population means, a comparison that answers many practical questions.

(d) confidence levels and P-values from the t procedures are quite accurate even if the population distribution is not exactly Normal.

(e) confidence levels and P-values from the t procedures are quite accurate even if outliers and strong skewness are present

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(a) Carry out a significance test at the α=0.05level.

(b) Construct and interpret a 95%confidence interval for the difference between the population proportions. Explain how the confidence interval is consistent with the results of the test in part (a).

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