Statistical Abstracts (117th edition) reports that the average amount spent annually for
Question: Problem 24)
Statistical Abstracts (117th edition) reports that the average amount spent annually for food by householders under 25 years of age is $2,690. A random sample of 16 people under 25 years of age who live in a university neighborhood were surveyed. The survey showed that they spend a sample mean $3,220 with sample standard deviation $750. Test the claim that the mean for this neighborhood is greater than the national average. Use a 5% significance level.
a. State the null and the alternate hypothesis.
b. Identify the sampling distribution to be used: the standard normal distribution or the Student's t distribution. Find the critical values.
c. Compute the z or t value of the sample test statistic.
d. Find the P value or an interval containing the P value for the sample test statistic.
e. Based on your answers to a through d, decide whether or not to reject the null hypothesis at the given significance level. Explain your conclusion in simple, nontechnical terms.
Solution Format: Word Document
![](/images/msword.png)