The average gasoline price of one of the major oil companies has been $1.00 per gallon. Because of shortages in production of crude oil, it is believed that there has been a significant increase in the average price. In order to test this belief, we randomly selected a sample of 36 of the company’s gas stations and determined that the average price for the stations in the sample was $1.04. Assume that the standard deviation of the population (o) is $0.12. n236
a) State the null and the alternative hypotheses for testing the belief.
X21.04 = 0.12 Hoiu 1.00 Haircu > $1.00 X=104
Test the belief at a = .05 by using critical value approach. What’s your conclusion?
We reject because 2x=2, which is greater then the C.V. 1.645, There’s a significant increase in gas price at 2:0.05.
f) What is the p-value associated with the above sample results? u a P-value P(x>104) = (2×2) = 0.0228 1.04 g)
Test the claim at a = .05 by using p-value approach. What’s your conclusion?
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