Question 1172148: CASE STUDY. TO ANSWER QUESTIONS 1 AND 2.
You recently received a job with a company that sells products. You want to conduct an advertising campaign for the product. Your boss said that last year the advertisement cost was GH¢ 44. You want to see if it has changed. The following are the cost for the previous years.
55, 42, 125, 62, 134, 73, 39, 69, 23, 94, 73, 24, 51, 55, 26, 66, 41, 67, 15, 53, 56, 91, 20, 78, 70, 25, 62, 115, 17, 36, 58, 56, 33, 75, 20, 16. Use this information to answer question 1 and 2.
Question 1
a) What hypotheses would you use? Are you to conduct a one tail or a two-tail test? What is the claim?
b) Is the sample considered small or large? Explain.
c) What assumption must you meet before you can conduct the test?
d) Which probability distribution would you use and why? What is the alternative to this?
e) What critical value(s) would you use at 5% significance level?
Question 2
a) Calculate the test statistics. Use the sample mean as 55.97 and standard deviation as 30.3. Show at least three iterations to arrive at the final answer.
b) What is your decision? Explain. Explain the other alternative as well
c) What is your conclusion?
d) What p-value(s) would you use?
e) At 5% significance level with the p-value, what would be your decision and why?
f) From (e) above, what would be the summary of your finding?
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! two tail test, because you are looking for a change, not certain which way it might be if there is one.
Ho: No change mu now=mu past
Ha: there is a change mu now NE mu past
sample is > 30 and is considered large, although 30 is not a magic number by any means.
The sample was randomly taken, and after that assume the distribution is normal.
Because n >30 probably they are looking for a z-test, but no sd given and a t-test is reasonable as well.
critical value would depend upon which test. At the 5% level, |z| > 1.96 and |t| > the critical value of t(0.975, df=36), which is 2.03
test stat t=(55.97-44)/30.3/sqrt(37)=2.40
could be done with z using the same numbers
Conclude in either case to reject Ho and there has been a change in the price.
p-value is 0.0215
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