The Colorado bookstore states the average textbook costs$75. A randomly selected

Question

The Colorado bookstore states the average textbook costs$75. A randomly selected sample of 16 new textbooks at the Colorado bookstore had a mean price of $82.54and sample standard deviation of $15.50. Use a 0.05 significance level to test the claim that the mean price of textbooks at the Colorado bookstore is significantly more than $75 (use the p-value method).Show your work.

a. Give the symbolic null & alternativehypotheses.Use proper notation.H0: ______________________HA: ______________________

b. Determine the test statistic(round to 3 decimal places): __________________

c. Determine the p-value(round to 3 decimal places): __________________

d. Result (Circle one &justify):REJECT H0 or FAIL TO REJECT H0 Reason: _________________

Explanation / Answer

Part a

H0:Text book price<=$75

Ha:Text book price is > $75

Part b

Sample size=16

Mean=82.54 and stddev=15.5

Hence t*=(82.54-75)/(15.5/sqrt(16))=1.946------------------->test statistic

P value=P(t*,15dof)=0.0706

Hence at 5% significance level.we reject H0

But had if the significance level was 10%,we would have accepted H0

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