Question 123663This question is from textbook Statistical Techniques in Business and Economics,
: Please help me understand this problem I am having major difficulties understanding this!
Chapter 11: Two-Sample Tests of Hypothesis
43) Fairfield Homes is developing two parcels near Pigeon Fork, Tennessee. In order to test different advertising approaches, they use different media to reach potential buyers. The mean annual family income for 75 people making inquiries at the first development is $150,000, with a standard deviation of $40,000. A corresponding sample of 120 people at the second development had a mean of $180,000, with a standard deviation of $30,000. At the .05 significance level, can Fairfield conclude that the population means are different?
This question is from textbook Statistical Techniques in Business and Economics,
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The mean annual family income for 75 people making inquiries at the first development is $150,000, with a standard deviation of $40,000. A corresponding sample of 120 people at the second development had a mean of $180,000, with a standard deviation of $30,000. At the .05 significance level, can Fairfield conclude that the population means are different?
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I'm going to assume you use a 2-Sample T test for problems of this sort.
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Ho: mu1-mu2=0
Ha: mu1-mu2 is not 0
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Test Statistic:
t(150000-180000) = -30.7282
p-value = 2.97x10^-60 or virtually zero
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Conclusion: Since the p-value is < 5%, reject Ho.
There is a statistically significant difference between the population means.
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Cheers,
Stan H.
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