document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=132768>Question 132768</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An auditor review 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount of $275.66 with a standard deviation of $78.11.<BR>\n" );
document.write( "a.  At the 5% level of significance, does this sample prove violation of the guideline that the average patient should pay no more than $250 out-of-pocket?  State your hypotheses and decision rule.<BR>\n" );
document.write( "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 #97021 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=97021\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> An auditor review 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount of $275.66 with a standard deviation of $78.11.<BR>\n" );
document.write( "a. At the 5% level of significance, does this sample prove violation of the guideline that the average patient should pay no more than $250 out-of-pocket? State your hypotheses and decision rule.<BR>\n" );
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document.write( "Ho: mu = 250<BR>\n" );
document.write( "Ha: mu is not 250<BR>\n" );
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document.write( "Critical Values for 2-tail T-test with df=24 and alpha=5%: t = +/- 2.064<BR>\n" );
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document.write( "Test statistic: t(275.66) = (275.66-250)/[78.11/sqrt(25)]= 1.64255...<BR>\n" );
document.write( "p-value = 2*tcdf(1.64255,10,24) = 2*0.5675..=0.1135... <BR>\n" );
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document.write( "b. Is this a close decision?<BR>\n" );
document.write( "p-value is greater than 5% by a significant amount.<BR>\n" );
document.write( "I'll let you decide if this is a close decision.<BR>\n" );
document.write( "----------------------------<BR>\n" );
document.write( "Cheers,<BR>\n" );
document.write( "Stan H. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );