MTH220_JAN21_PCQ02
An alpha (α) of 0.05 will cause ‘more’ or ‘less’ risk of a Type I error than an alpha (α) of 0.01?
The Claims Department of ABC Insurance Company reports that the mean cost to process a claim is $60. An industry comparison showed this amount to be larger than most other insurance companies, so the company instituted cost-cutting measures. To evaluate the effect of the cost-cutting measures, the supervisor of the Claims Department selected a random sample of 26 claims processed last month and recorded the cost to process each claim. It was found that the mean cost per claim for the sample is $56.42. The sample standard deviation is $10.04. At a significance level of α = 0.01, the supervisor carried out a t-test to determine whether it is reasonable to conclude that the mean cost to process is now less than $60. State the null and alternative hypothesis.
The Claims Department of ABC Insurance Company reports that the mean cost to process a claim is $60. An industry comparison showed this amount to be larger than most other insurance companies, so the company instituted cost-cutting measures. To evaluate the effect of the cost-cutting measures, the supervisor of the Claims Department selected a random sample of 26 claims processed last month and recorded the cost to process each claim. It was found that the mean cost per claim for the sample is $56.42. The sample standard deviation is $10.04. At a significance level of α = 0.01, the supervisor carried out a t-test to determine whether it is reasonable to conclude that the mean cost to process is now less than $60. What is the computed test statistic?
The Claims Department of ABC Insurance Company reports that the mean cost to process a claim is $60. An industry comparison showed this amount to be larger than most other insurance companies, so the company instituted cost-cutting measures. To evaluate the effect of the cost-cutting measures, the supervisor of the Claims Department selected a random sample of 26 claims processed last month and recorded the cost to process each claim. It was found that the mean cost per claim for the sample is $56.42. The sample standard deviation is $10.04. At a significance level of α = 0.01, the supervisor carried out a t-test to determine whether it is reasonable to conclude that the mean cost to process is now less than $60. What is the t(critical value) value?
The Claims Department of ABC Insurance Company reports that the mean cost to process a claim is $60. An industry comparison showed this amount to be larger than most other insurance companies, so the company instituted cost-cutting measures. To evaluate the effect of the cost-cutting measures, the supervisor of the Claims Department selected a random sample of 26 claims processed last month and recorded the cost to process each claim. It was found that the mean cost per claim for the sample is $56.42. The sample standard deviation is $10.04. At a significance level of α = 0.01, the supervisor carried out a t-test to determine whether it is reasonable to conclude that the mean cost to process is now less than $60. Interpret the results and draw your conclusion.
The computed p-value for a particular hypothesis test is 0.0026. Based on a 5% level of significance, what conclusion can we draw?
A study of recent UniSIM graduates reveals that for a sample of 10 “Accounting” majors, the mean salary was $30,000 per year. The sample standard deviation is $2000. A sample of 8 “General Business” majors reveals a mean salary of $29,000 per year with a standard deviation of $1500. A two-sample t-test is carried out to determine whether we can conclude that “Accounting” majors earn more than “General Business” majors at the significance level α = 0.05. Compute the pooled-variance (sp2).
A study of recent UniSIM graduates reveals that for a sample of 10 “Accounting” majors, the mean salary was $30,000 per year. The sample standard deviation is $2000. A sample of 8 “General Business” majors reveals a mean salary of $29,000 per year with a standard deviation of $1500. A two-sample t-test is carried out to determine whether we can conclude that “Accounting” majors earn more than “General Business” majors at the significance level α = 0.05. Suppose µ1 refers to “Accounting” majors (graduates) and µ2 refers to “General Business” majors (graduates). Formulate the null and alternative hypothesis.
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