6 According to Automotive News, the mean 3-years-old used car price is $22,570.

Question

6 According to Automotive News, the mean 3-years-old used car price is $22,570. to compare the average price of similar used cars in central Indiana, a random sample of 120 such cars were selected. The sample mean is $21,450 with a standard deviation of $6,594. Does the sample provide significant evidence that the mean price of 3-years-old used cars in central Indiana is different from the national mean price? Use = 0.05 a p-value = 0.0784. Do not reject H. Do not conclude the average price in central Indiana is different from the national average. b p-value = 0.0784. Reject H. Conclude the average price in central Indiana is different from the national average. c p-value = 0.0392. Do not reject H. Do not conclude the average price in central Indiana is different from the national average. d p-value = 0.0392. Reject H. Conclude the average price in central Indiana is different from the national average. 6 According to Automotive News, the mean 3-years-old used car price is $22,570. to compare the average price of similar used cars in central Indiana, a random sample of 120 such cars were selected. The sample mean is $21,450 with a standard deviation of $6,594. Does the sample provide significant evidence that the mean price of 3-years-old used cars in central Indiana is different from the national mean price? Use = 0.05 a p-value = 0.0784. Do not reject H. Do not conclude the average price in central Indiana is different from the national average. b p-value = 0.0784. Reject H. Conclude the average price in central Indiana is different from the national average. c p-value = 0.0392. Do not reject H. Do not conclude the average price in central Indiana is different from the national average. d p-value = 0.0392. Reject H. Conclude the average price in central Indiana is different from the national average.

Explanation / Answer

HERE THE SAMPLE SIZE IS LARGE THEREFORE WE WILL APPLY THE NORMAL DISTRIBUTION AND USE THE Z TABLE

THE NULL HYPOTHESIS = H0 = U = 22570

THE ALTERNATE HYPOTHESIS = Ha= U<22570

it will be a left tailed test

the test static value = (x-mean)/(standard deviation/sqrt(n))

= (21450-22570)/(6594/sqrt(120)) = -1.86

the p value for z = -1.86 = 0.0392

as the p value is not significant to 0.05 therefore we will reject the null hypothesis.

therefore option D is correct.

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