Question 61524: Good afternoon Sir, Madam,
Please can I get your help with the following problem?
Thanks very much,
Claudia Cardenas
The president of the American Insurance Institute wants to compare the yearly costs of auto insurance offered by two leading companies. He selects a sample of 15 families, some with only a single insured driver, others with several teenage drivers, and pays each family a stipend to contact the two companies and ask for a price quote. To make the data comparable, certain features, such as the amound deductible and limits of liability, are standardized. The sample information is reported below. At the 0.10 significance level, can we conclude that there is a difference in the amounts quoted?
Family Progressive GEICO
Becker $2,090 $1,610
Berry 1,683 1,247
Cobb 1,402 2,327
Debuck 1,830 1,367
DuBrul 930 1,461
Eckroate 697 1,789
German 1,741 1,621
Glasson 1,129 1,914
King 1,018 1,956
Kucic 1,881 1,772
Meredith 1,571 1,375
Obeid 874 1,527
Price 1,579 1,767
Phillips 1,577 1,636
Tresize 860 1,188
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Find the mean of the data 1st mentioned for each family.
Call that x1-bar
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Find the mean of the data mentioned 2nd for each family.
Call that x2-bar
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Test the hypothesis
Ho: mu1 - mu2 = 0
Ha: mu1 - mu2 is not equal to 0
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Find the z-score for (x1-bar minus x2-bar)
Check to see if that z-score falls in the
critical area associated with alpha = 10%
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Comment:
If this is not enough explanation let me know
Cheers,
Stan H.
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