Question: Suppose the federal government proposes to give a substantial tax break to automakers producing midsize cars that get a mean mileage exceeding 31 mpg. A sample of 49 midsize cars showed a mean of 31.5 mpg, with a standard deviation 0.8. [use Excel- Megastat, hypothesis tests, mean v hypothesized value, z-test or use Phstat, one-sample tests, z test for the mean, sigma known. See the model example in the week 1 lecture - one population test for a large sample]

1. Write H _o and H _{1 in mathematical format} .
2. Is this a right-tail, left-tail or two-tail test?
3. What is the critical value at = 0.05 level?
4. State the decision rule.
5. Compute the test statistic.
6. What is your decision regarding Ho? Accept or Reject?
7. What is the p -value? [ To get the p-value for one-tailed test, first get the probability value using the computed Z value in the standard normal table or use the web-based p-value calculator at http://www.graphpad.com/quickcalcs/PValue1.cfm . To get the p-value for two-tailed test multiple the result by 2 ]
8. What is your conclusion?
9. What do you recommend ¿ Should the federal government give a tax break to automakers or not?

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