document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=262360>Question 262360</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with a standard deviation fo $78.11 a)At the 5 percent level of significance, does this sample prove a violation of the guideline that the average patient should pay no more than $250 out-of-pocket? state your hypothesis and decision rule. b)Is this a close decision? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #193287 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=193287\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with a standard deviation fo $78.11<BR>\n" );
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document.write( "a)At the 5 percent level of significance, does this sample prove a violation of the guideline that the average patient should pay no more than $250 out-of-pocket?<BR>\n" );
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document.write( "state your hypothesis and decision rule. <BR>\n" );
document.write( "Ho: u <= 250<BR>\n" );
document.write( "H1: u > 250<BR>\n" );
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document.write( "test stat: t(275.66)= (275.66 - 250)/[78.11/sqrt(25)] = 1.6426<BR>\n" );
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document.write( "p-value: P(t> 1.6426 when df = 24) = tcdf(1.6425,100,24) = 0.0568<BR>\n" );
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document.write( "Conclusion: Since the p-value is greater than 5%, fail to reject Ho.<BR>\n" );
document.write( "At the 5% significance level the test results show the sample does<BR>\n" );
document.write( "not violate the guideline.<BR>\n" );
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document.write( "b)Is this a close decision?<BR>\n" );
document.write( "Yes, since the P-value is close to 5%<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
document.write( " </SPAN>\n" );
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