The mayor has claimed that the Recession has not affected the town\'s economy an

Question

The mayor has claimed that the Recession has not affected the town's economy and that it has remained stable, because the average sales price of a home is not less than the average pre-Recession price in 2008. You are a realtor, and you don't think the mayor is correct. You know the average price of a home in 2008 was $ 390, 000, so you conduct a hypothesis test at the 10% alpha level of significance, using the sample above, to test the mayor's claim. A) State the best null and alternate hypotheses: H_0: p = 0.10 H_a: p notequalto 10 Calculate a Confidence Interval Using the home sales prices data from the previous question (Part 2 above), now calculate a confidence interval for the true mean the population of all home sales prices for this town. 1. Calculate a 95% confidence interval and the error bound. a. The Confidence interval is: b. The Error Bound for the Confidence Interval is: How much area is in both tails (combined)? alpha = How much area is in each tail? Alpha/2 = Fill in the blanks on the graph with the area in each section, upper & lower limits of the confidence interval, & the sample alpha/2 = C.L. = alpha/2 =

Explanation / Answer

Here we need to test the claim for average price of a home.

(A) Below are the null and alternate hypothesis
H0: mu = 390000
Ha: mu not equals 390000

2) Area in both tails combined is 1 - 0.95 = 0.05

3) Area in each tail = 0.05//2 = 0.025

4) alpha/2 = 0.025, CL = 0.95 and alpha/2 = 0.025

Note: in order to calculate the confidence interval data is required in part 1.

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