Many people claimed that the average cost of living for grocery expenses for fam

Question

Many people claimed that the average cost of living for grocery expenses for family with one or two children in the Washington D.C metropolitan is exceeded $1,000 per month. In a sample of 100 family survey undertaken in the Washington D.C metropolitan area in July 2011. The average cost of living for grocery expenses for family with one or two children in the Washington D.C metropolitan are found to be $1,150 and $180, respectively. Does these day support the claim above that the cost for living is exceeded $1,000 per month? Conduct a test at alpha =.05 and give an interpretation of the result.

Explanation / Answer

Set Up Hypothesis
Null, H0: U=1000
Alternate, H1: U>1000
Test Statistic
Population Mean(U)=1000
Sample X(Mean)=1150
Standard Deviation(S.D)=180
Number (n)=100
we use Test Statistic (t) = x-U/(s.d/Sqrt(n))
to =1150-1000/(180/Sqrt(100))
to =8.333
| to | =8.333
Critical Value
The Value of |t | with n-1 = 99 d.f is 1.66
We got |to| =8.333 & | t | =1.66
Make Decision
Hence Value of | to | > | t | and Here we Reject Ho
P-Value :Right Tail - Ha : ( P > 8.3333 ) = 0
Hence Value of P0.05 > 0,Here we Reject Ho

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