Two real estate companies compete with one another in a local market. The manage
ID: 3391593 • Letter: T
Question
Two real estate companies compete with one another in a local market. The manager of the Company A office would like to advertise that homes listed with Company B average more than 10 days on the market when compared to homes listed with his company. The following data shows the sample size and average number of days on the market for the two companies along with the population standard deviations. Assume Population 1 is defined as Company B and Population 2 is defined as Company A. Using = 0.10, what is the critical value for this hypothesis test?
a) 2.33
b) 1.28
c) 1.645
d) 1.96
Company A Company B Sample Mean 122 days 144 days Sample Size 36 30 Population standard deviation 32 days 35 daysExplanation / Answer
The manager of the Company A office would like to advertise that homes listed with Company B average MORE THAN 10 days on the market when compared to homes listed with his company.
Hence, it is right tailed.
As this is a 0.10 level, right tailed test, then by table/technology,
zcrit = 1.28 [ANSWER, B]
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