SOLUTION: An advertising firm claims that the average expenditure for advertising for their customers is at least $12,500 per year. You want to test this claim, so you randomly select 10 of

Algebra ->  Probability-and-statistics -> SOLUTION: An advertising firm claims that the average expenditure for advertising for their customers is at least $12,500 per year. You want to test this claim, so you randomly select 10 of       Log On


   

Question 899883: An advertising firm claims that the average expenditure for advertising for their customers is at least $12,500 per year. You want to test this claim, so you randomly select 10 of their customers. The results are listed below. At a sig. level of .01 can you reject this claim? Explain.
13,445 11,220 10,157 13,217 9,990
12,125 10,116 14,350 13,590
12,100
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi

Ho: p >= 12.500 (claim)

Ha: p <12,500 

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Sample:

mean = 12031

s = 1606.595

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test stat:: z(12031) = (12031-12500)/[1606.6/sqrt(10)] =  - 499/508.1 = -.9821

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p-value = P(z < -.9821) = .1630

Conclusiion: 

Since the p-value is greater than .01, accept claim.

The test results support the claim.